Currency risk explained – how to interpret figures in foreign investments?
Before deciding to purchase property outside Poland, it is worth checking not only prices and rents, but also the impact of currency on the rate of return.
For many investors today, purchasing property abroad is a natural way to diversify their portfolio and seek new sources of income. Analyses increasingly focus on purchase prices, rent levels, occupancy rates and the potential for property value growth. However, one of the key factors – currency risk – is much less frequently taken into account.
Currency risk is the impact of exchange rate fluctuations on the real return on investment. It applies both to the moment of purchase and to subsequent rental income, maintenance costs and final sale.
During the INRE Investment Property Fair, participants will learn how to analyse foreign investments from a currency perspective, rather than solely from the perspective of local prices.
Experts will explain, among other things:
- how exchange rate fluctuations affect the rate of return calculated in PLN,
- why an investment that looks very attractive in local currency may yield a completely different result after conversion,
- when currency risk becomes an important element of an investment strategy,
- how to consciously take it into account when comparing foreign markets.
Awareness of currency risk is not about eliminating it, but about skilfully managing it at the investment planning stage. For a growing group of investors, this is one of the key elements of a professional approach to the real estate market outside Poland.