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I have combined the advice that I have given on various investment stickies, into one sticky, to make it easy to refer to.

General advice

If you are not a seasoned investor and don't understand market fundamentals, then don't do this:

1) Don't mess with FX trading or options or commodities or shorts
2) Don't trade on margin or leverage
3) Don't give into emotions i.e. sell when the price is falling or buy when the price is rising.Ìý Most times, the exact opposite approach works if the fundamentals are correct
4) Be very clear on your risk appetite i.e. how much risk are you willing to take with the money that you have.Ìý Keep in mind that risk and return are directly co-related i.e. higher risk may mean higher return but can also mean total wipe out of your funds
5) Don't listen blindly to bankers or financial advisers.Ìý  They don't know everything and are biased as they are trying to make money off you.Ìý Unless you are a high net worth individual (net worth of $1mn and investments of at least $200-$250K) and have a dedicated relationship manager who works with you over a long term period; the bankers you are likely to experience are retail run of the mill junior people who actually don't really know much

Specific advice for GCC re: Shariah Law

Basically, if you die, as a Muslim and even have a will, inheritance matters are a pain for your heirs in Muslim countries as Shariah law will always apply.Ìý This applies to ALL GCC countries and most other Muslim countries out there e.g. Pakistan.

I don't encourage creating assets in jurisdictions which would be subject to Shariah law, in the event of your death, but ONLY IF YOU ARE MUSLIM.Ìý These would be policies or items incorporated in the GCC or other Muslim countries.Ìý It doesn't matter where the money is invested but where the vehicle (the bank or insurance company), through which the investments are made is located or incorporated, as it owns the investments (these investments into funds are in the name of the insurance company and not you).Ìý For example, you can invest in Islamic funds through HSBC UK and it won't be subject to Shariah law as the holder of record in the Islamic fund is HSBC and not you (you are marked as beneficiary in HSBC systems only).Ìý  But invest in international funds through a local vehicle and it is subject to Shariah law.

For Non-Muslims, the provisions of your will hold true and Shariah law is only applied if there isn't a will in place.

Offshore bank accounts and how they manage the above risk

Simply, an offshore bank account is an account with a bank which is held offshore in a tax haven / friendly jurisdiction.Ìý  You can open an offshore account without living in the country where the account is based.

The benefits are:

- Tax benefits to keeping money offshore
- Money accessible from anywhere you relocate to in the world
- No physical interaction required with the branch - the banks are set up to facilitate expats after all!
- Protected up to a certain limit by the depositor compensation scheme of the relevant country the bank is incorporated in.Ìý So pretty safe
- And for people working in the GCC, a way to prevent Shariah law from applying in the event of your untimely death, causing complexity in inheritance and potentially leaving your family penniless while the case goes through the courts
- Easy to set up minus one element (listed in cons)

The cons:

- It is meant for wealthy expats with minimum deposit requirements.Ìý Especially the big top tier banks.Ìý There used to be affordable accounts a few years ago but with all the compliance checks, FATCA etc etc; it is not worth it anymore for many major banks to open accounts with low deposits and not charge any fees.Ìý So basically, they will open the account but will charge monthly fees if balance requirements are not met
- Keeping idle cash is a sin especially with low interest rates (and especially with the minimum deposit requirement)
- In some cases, with the recent increase in anti money laundering requirements, setting them up can be a chore from documentation standpoint - to prove source of funds and source of income

There are many offshore jurisdictions but the popular (and safe and affordable) ones are Channel Islands followed by Singapore.

The big tier banks are:

Lloyds International - Can open an account with as little as USD 3K but carries a monthly fee or get a free premier account with average balance of GBP 100K
HSBC Expat - Only Premier account available for international customers.Ìý Minimum GBP 60K or USD 100K
Barclays International - Minimum GBP 25K or premier service for GBP 100K
CitiGold Singapore - Minimum $200K balance
Standard Chartered Singapore - Minimum $100K balance

There are many others like Satander and so on but I just listed the massive banks with history behind them - from perspective of risk.

Types of investment

1) Savings / Education / Other investment plans or life insurance policies - Pushed by the banks / financial advisers i.e. you pay a regular or a lump sum premium into a plan from, say, Zurich international or Old Mutual etc
2) Direct investments into Mutual funds, stocks, bonds etc - You invest directly into these either through a brokerage account with interactive brokers, saxo bank etc or through an offshore bank account
3) Crowdfunding Fintech platforms
4) Commodities like Gold
4) Property in the GCC

1) Insurance / Savings Plan

This is pretty much the first investment type an expat in the GCC will come across.Ìý Most of the products labelled as "Savings" or "Education" or "Peace of mind" plans on bank websites are pretty much a variation or mix of the three types that I have labelled below.

A lot of financial planning advisers push people into this routinely because they make higher commissions on these plans (WOL/Hybrid - term they don't usually push as a consequence).Ìý Keep in mind that they know NOTHING about the markets (which play a lot into WOL/Hybrid plans) - they are just glorified car salesmen.

Basically to keep it simple, when it comes to insurance policies, there are two types.Ìý The third is a hybrid plan which has an insurance component but the major part is focused on investment.

1) Term insurance (Life / Critical illness) : Cheap but no cash value on expiry / lapse just like standard insurance policies e.g. car insurance. This provides protection in case you die or get critical illness, for your family.Ìý This is the ONE item I will advise EVERYONE to have in place as early as possible as the premiums are much lower when you are younger
2) Whole of Life Policy or WOL (Life / Critical illness / income benefits and other riders) : Has a cash value on surrender or expiry or after a time period, even if you don't die or become critically ill. These are WAY more expensive in terms of premium paid but the agents tell you that it is an investment and your money accumulates as a saving and you get it back.Ìý However, the truth is slightly different
3) Hybrid plan like Education / investment  : These are basically insurance policies that last for a shorter period like a term policy and offer you protection of capital in case of death i.e. if you die now, you get the value of the premiums invested even if cash value is less.Ìý On the other hand, if cash value is higher, you may or may not get a higher payout depending on policy.Ìý These policies have a BIG valuation issue in terms of cash and surrender value because of the fixed time period

Now read on in terms of how this all works:

WOL Policies
1) The premiums that you invest within the first 2 years for most policies, DO NOT go into your cash value but instead are used to pay charges and mortality costs for the insurance companies up front.
2) From the 3rd year onward, depending on most policies, a certain proportion of premium goes into investments into mutual funds (the price of mutual funds as at a certain date is what the cash value is).Ìý This %age in the early years could be 80-90% of your premium AFTER deducting mortality and servicing charges
3) In the later years, and again depending on policy, 100% of your premium goes into cash value

Now as you can see, if you have paid 1000 dollars for each year of the 7 years that you have held a WOL policy, the amount that would have been invested would only be around 3-5K.Ìý  Then, mutual fund prices are subject to market volatility - generally brokers push you to invest in higher risk funds so that they can price the policy at a higher return thus resulting in lower premiums for you.Ìý  However, this basically means that you take more risk on the cash value - up or down.Ìý  Generally speaking, if you hold the policy for 10-15 years, don't expect a return of more than one to two percent a year on average and that would be very good.

HYBRID PLANS
This is even WORSE for hybrid plans as while they invest 100% of the premium in funds; they charge you fees ranging between 1-5% on an annual basis (management fees, fund switch fees as well as one-time investment fees).Ìý So for example, if your investments return three percent only, all of these go to pay the fees and if there is a loss, you still pay fees which reduces the amount that you actually paid in.Ìý For example, you invested $1000 and the funds held flat, this would be reduced by $1-$5 after a year......so your account value / cash value goes DOWN even if there is no negative movement in the market!!!.

Also, since the insurance company is NOT recovering all of their major costs and margin upfront like they would with a WOL policy, they institute something called a surrender value which is to discourage you to cash out early.Ìý If you do cash out early, they recover all their associated costs.Ìý  

So your account value is the cash value and what your agent will quote, should you want to exit before maturity, is the surrender value.Ìý  This will ALWAYS be lower than the cash value in the early years EVEN if the mutual funds are performing well (only way it will be positive if the funds have given unbelievable return in the very high double digits and are able to cover the difference between cash & surrender values.Ìý But it never happens).Ìý The difference between cash and surrender value starts reducing year over year (assuming mutual funds value remains constant).Ìý In the final year, if mutual fund return is flat after covering all the fees in each year, theoretically speaking, this surrender value should be exactly the cash value in your account.Ìý So for people who are already stuck in this, your best bet is to keep paying and hope the funds do well - keep tracking and the moment, the fund value and surrender value are relatively close to each other (small loss), cash out.Ìý  Try and also see if you can reduce the premium amounts.

In my early investment days, I was bitten by this same sort of plan.Ìý I was locked into a 10 year plan and managed to get out after 5 years.Ìý  I broke even but only because when I got out, it was boom market time.Ìý This made the cash value higher and when I surrendered, I got 100% of what I actually invested but only about 80% of the cash value.Ìý  But I count it as a big loss as I tied up my capital for 5 years and didn't get any return.

So for ME, the only reason that you should EVER get the policies mentioned above are:

Term policy - Get this for protection during your wage earning years to protect the family.Ìý In fact, I absolutely recommend it.
WOL - NEVER EVER get it UNLESS you have one of the three reasons:

a) Tax benefit in your tax jurisdiction - as the lump sum payout at the end through cashing out is generally tax free unlike other investments which are subject to capital gains tax
b) You want a cover on some elements for a longer term period than the term policy can afford.Ìý For example, if you die, you want your family to get $100K USD a year for 10-20 years OR you want to be covered for critical illness for the entirety of your life - these kind of adjustments are not possible for a term policy as those only cover you for a FIXED term and for limited options
c) Regulatory / Devaluation / Currency repatriation risks - Primarily applicable to areas like the sub-continent wherein you bring in USD and get cash only in local currency.Ìý Or the USD to rupee keeps fluctuating.Ìý Or the tax authorities give you headache.Ìý In this case, get a WOL policy back home for future benefits cheaply and keep all your hard earned dollars offshore

Hybrid Plans - NEVER EVER get these.Ìý Period.Ìý Bad bad bad protection and even worse investment.

2) Direct Investments

As an expat in the GCC, you can open accounts with brokerage firms online e.g. interactive brokers, Saxo bank etc.Ìý Or use bank platforms where available e.g. HSBC Expat share dealing service.Ìý  I used HSBC services and now use interactive brokers - they are the lowest cost in terms of commissions but if you don't trade regularly or don't have a portfolio of $100K, be ready to pay $20 per month as fees.

Practically speaking, if you want the highest amount of return, you have to re-evaluate the risk that you want to take.Ìý  For example, stock market is where you get the highest amount of returns and the highest amount of wipe-outs if you don't build a diversified portfolio.Ìý Even if you don't do daily dealings of shares, good stocks have dividend yields of 3-6% on USD stocks which is much better than bank accounts.Ìý And if the stock rises, you have capital appreciation.Ìý  As an example, I invested in a NYSE stock back in Oct 2018 and picked up 500 shares [at] $55.76 per share.Ìý That share, today is around $82 and has been paying me monthly dividends of $110 before tax.Ìý So just on the dividends, I made around 5% on the money invested.Ìý If I were to sell the stock today, my total return would be fifty percent on money invested in barely 1.5 years.Ìý And this stock pick wasn't unique or even a risky bet.

But having said that, the stock market is unpredictable, so the situation can easily reverse.Ìý  

3) Crowdfunding FinTech platforms

Right now, there are two bigger / well known platforms in the GCC.Ìý Both are set up in the UAE.Ìý One is Beehive (Invest in private companies) and the other is Smart Crowd (Property).

The basic idea for Smart Crowd is good but be aware of the risks.Ìý Simply:

1) You DON'T own the property.Ìý A legal entity you own shares in, does.Ìý And hence, the shares by their nature are not liquid i.e you cannot sell them and must hold till end of the investment period.Ìý At the end of the period, all investors can vote to sell their shares at which point, smart-crowd gets the property valued and puts it up for sale.Ìý This process can take months and you may not get back what you invested even if property sells for the same price that it was bought for (as SC will deduct for fees etc).Ìý Even if they bring about a secondary market for selling your shares, it depends on whether other people are willing to buy them or not - and if someone does, the likelihood is that they will buy it for a discount and not a premium
2) The rental returns are an estimate.Ìý If the property is not rented or the tenant defaults, you won't get anything.Ìý And I am not sure how the running costs of the property will be funded in that case - it could be that they will accumulate the costs and offset against future rental income.Ìý This then means that you won't get anything for a while even when the property is rented - at least for a period of time

The concept, as I said, is good and allows people with smaller amounts of money to invest in real estate.Ìý  But don't be fooled into thinking that this is a guaranteed return or risk free.

To put it another way, it is a mutual fund (using definition loosely - multiple investors brought together by a fund manager) created to invest in individual properties.Ìý There would be an entry / exit fee structure which means you need the property market to keep going up so that when the property is sold, you at least get the same amount that you put in.Ìý The dividends / returns are not guaranteed which is the same as mutual funds BUT the big difference is, that unlike mutual funds, if you are not getting the right dividends, you won't be able to sell your shares.

On beehive, to be simple, you are lending money to businesses and NOT buying their shares.Ìý But you still can't exit early - you would need to try to sell your financing on the secondary market that they have.Ìý No guarantee that it will be picked up.

4) Commodities e.g. Gold, corn etc

Commodities is an interesting investment if you understand the markets and have a good risk appetite.Ìý But alternatively, it can also wipe you out.Ìý As the risk factors in this area are fast changing - supply/demand (e.g. weather patterns or crop yields).

You can invest in commodities in four ways:
1) Investing directly in the commodity
2) Using commodity futures contracts to invest
3) Buying shares of exchange-traded funds that specialize in commodities.
4) Buying shares of stock in companies that produce commodities

From a risk stand point, I would only advise point 3 or 4.

But in this section, I will talk more about a phenomenon that is common to a lot of people in this region i.e. holding physical gold.

I am not a believer in holding physical gold.Ìý It is better to buy options / invest in a commodity fund vs. hold the physical commodity re: security considerations.Ìý On top of that, this is not an investment that is going to deliver tremendous returns most times.Ìý Since the last 5 years, Gold has been trading between 1200 to 1300 USD. 10 years ago, it was at a $1000 with a high in 2011-2013 with a price of $1700-$1800.Ìý Assuming, you bought gold in 2009 at $1000 and wanted to sell it in 2019 for the price of $1200, your return is 20% from purchase price but return per year is two percent over the 10 years.Ìý You were better off putting the money in a bank account or even property as liquidity is not a concern if you hold an item for this long.Ìý Exclude the one-off safe haven movement into Gold nowadays which has taken it to $1600 range - as the markets are worried about equities being overpriced and the corona virus economic impact.

5) Property in the GCC

This is a big topic.Ìý I will speak primarily about Bahrain but this will apply to most places where expats can purchase property e.g. UAE with similar population demographics.Ìý  First off, to be blunt, the best investment is NOT necessarily a property investment e.g. if you want high returns on capital invested with relative liquidity and reaction time to the market etc.Ìý It is an "acceptable risk" investment for stable returns and capital protection provided the market continues to remain stable.Ìý It is a "good" investment if you want to live in it.Ìý

There are LOTS of things to consider on the purchase vs. rent and when you bring GCC into the mix, even more complexity is created.Ìý

What you have to understand is economics i.e. supply and demand.Ìý Property prices will only continue to appreciate if there are more buyers than sellers in the coming years.Ìý While this holds generally true for countries like Pakistan with high local population growth rates or countries with an overwhelming majority "local" population which is here long-term; this is more difficult for Bahrain where the local population base is relatively low (in ratio vs. most countries - compared to expats), in a completely different income / lifestyle distribution (vs. expats i.e. live in separate areas which is to say that most will not buy property to live in places like Juffair for example) and the affordability / value attached to property in expat areas i.e. locals see the price as too high vs. what they can get in primarily local areas and the price is also out of the reach for most Bahrainis.Ìý This means that prices, especially in expat areas, are determined primarily by expat buyers.Ìý And with the current economic situation and other factors, as described above, that is in a flux.

A good case in point is Riffa views - I will attempt to link it to economics.Ìý When I first moved to Bahrain, a 5 bedroom signature villa was being retailed for around 420K.Ìý  Rentals were high too i.e. around 1400-1600 inclusive.Ìý There was almost 100% occupancy with a lot of expats as well as Bahraini owners who lived here with their families.Ìý

Now come to the economic crash of 2016 and onward with falling oil prices and all that it led to i.e. removal of subsidies, push on localisation of jobs etc etc.Ìý Suddenly people, primarily expats, started to lose jobs and even the ones who didn't, were forced to pay huge amounts to maintain their lifestyle in the form of electricity, VAT etc.Ìý Then on top with all the news, announcements and so on; expats across the GCC experienced a mindset shift i.e. the good times won't last here and this region is relatively unstable compared to their home countries (for western expats at least). Also, the feeling was that it will get a lot worse for expats and now is the time to secure the future for themselves & their families. Then on top, economies started recovering in India, Europe and the US started booming.Ìý So what happened?

A lot of people left.Ìý Others started to down trade from high end luxury villas like Riffa Views to smaller ones to save on costs.Ìý And even more so, due to the mindset change, a lot of expats started holding back on investments and even if they did invest, they limited that investment or started moving it to other countries - as a lot of options also came about for passports / residency through investment in Western & developed countries in the recent years which offer the same property values, relatively stable property market, economic / political stability and on top, security in the form of permanent residency / Citizenship.Ìý If you think about it, almost all GCC countries have launched or made programs for residency through investment more attractive in this same time period, correct?  and this is the primary reason.Ìý

Today, around my house, a lot of houses are vacant and have been for a long long time.Ìý There are friends who want to sell their villas for 330, 310, 280K etc and are unable to find buyers or if they do, the buyers are expats who don't get security clearance.Ìý  Rentals have plummeted to the 1100 range.Ìý I am even getting a rental reduction from my landlord.Ìý  This is true all across Bahrain for luxury high end properties.Ìý  

Some specific FAQs for GCC

think-tankk wrote:

God, there is so much of conflicting views. I was told that never invest in an apartment unless you have no money issues because overtime apartments value goes down whereas land/villa prices increase! I think I read about it too
TT

Now apartments generally depreciate in value as the building gets older but then again, as I said, it is supply and demand plus as I explained, Bahrain is not a representative market.Ìý The economic drivers, as related to property here are very different as compared to other markets (population base, population growth, government subsidized housing for locals, local vs. expat lifestyle and areas, pricing for local vs. expat etc etc.).Ìý As I explained earlier, expats are simply not willing to spend huge amounts of money especially with an uncertain future - I mean, today, why would you lock up $1 mn in a villa?  what do you get out of it as an expat?  a 10 year visa?  any person who has that amount of money is a savvy investor who will spend the bare minimum to get a 10 year visa, live in a rented place, invest in property in other countries and get passports...and still have half a million dollars left over .Ìý So, if they must spend any money for a visa (i.e. 50K BHD) or for managing exposure in an investment in a risky environment, it has to be on lower value property like apartments, which is exactly what is happening.Ìý Also apartments have a higher rental yield for investors due to lower maintenance and it is easy to find tenants today for apartments vs. villas.Ìý So simply while villa prices in expat areas like RV are tanking, apartment prices are holding.

So simply put, the traditional rules you have been taught are absolutely wrong , when it comes to most GCC markets e.g. Bahrain/UAE, because the huge expat population base has a big role in supply / demand and even in places like Saudi, where expats can't buy property plus are outnumbered by locals, they have a huge role in rentals (rock bottom rentals in Saudi now).Ìý Think about it this way, if today, Bahrain or any other country e.g. UAE, banned sales of property to expats, what will happen?  simple, the bottom will fall out of the market.

think-tankk wrote:

What’s the point of having a secure investment in properties then?! If this rule of property appreciating in value is only applicable to long term scenario i.e. 20-25 years, that’s a different story.

This is generally true over the longer term.Ìý But again, as I said, when your population base is subject to external factors, it may not hold true always.Ìý For example, property prices in Bahrain completely tanked post 2011 after the unrest.Ìý In some cases, they went even lower than decades ago for a short period of time as panicked sellers sought to get out.Ìý  However, barring a huge event, they should go up but if you buy at a high and sell at a low, they would not, would they? 

Lastly, on pricing negotiation, it depends who you are buying from.Ìý If it is a developer or a company which owns many apartments in the building, then they will NOT reduce the price by a big margin because they have tons of apartments to sell and they will not impact the value of their building, whether for themselves or previous buyers.Ìý They will sell smartly, few apartments at a time and control the supply (the one I bought from, has 30-40 apartments in the building but only lists 3-4 at a time).Ìý Also, keep in mind that most developer delivered apartments have an agreement with the buyer to NOT sell below a certain price without developer approval.Ìý If it is an individual seller, you will have a lot more luck in negotiation as the person may need the money.Ìý I can give you an example of this; in boom times for the popular apartment buildings, the indoor parking lot had NO free spaces at night and disputes between residents over wrong parking were common.Ìý Today, in Juffair, at least in the few buildings I am exposed to, the majority of the parking spaces are empty.Ìý What does that tell you?   people are not living there - this is in line with the types of buyers I have clarified in the coming paragraphs.Ìý Which means, the prices are not likely to go down vs. what is listed, by a huge margin as the demand is from a different nature of buyer i.e. investor.Ìý And investors are happy to hold the investment as they can afford to.

Below are more summarized or standard tips for a property investment:

Lifestyle
Generally, as a rule of thumb, unless you have no issues with money; the property that you can buy at any given point in time will ALWAYS be smaller or in a less affluent neighborhood vs. what you can rent.Ìý  So you need to be ready to make the compromise in your lifestyle to own a property.

The way it works is that you buy a smaller property, live in it, adjust, save the rental and then buy another property.Ìý Then wait for prices to go up, sell both and get what you are generally used to living in.Ìý  So essentially, it is a trade up philosophy if you want to live according to what you are used to.Ìý

GCC Complexity:  You might not be here long enough to follow the trade up philosophy especially if your income is dependent on a job and not your own business. Job security / continuity is not guaranteed anywhere.Ìý A lot of people who have been in Bahrain for decades are either running their own businesses or have already worked here for so long that they can get retirement visas while living off pensions / savings.Ìý And a huge majority, already have Bahraini passports especially the Pakistani's who came for police and security services, decades ago.Ìý Now, all of that has changed.Ìý With the localisation drive, expats cannot count on staying indefinitely through jobs or even businesses for that matter (this year, more business activities were made for Bahrainis only by MOIC).Ìý And forget about the passport, there are thousands of people in the queue since decades and even security services people are even not getting them anymore.

Financing
I am personally not too hot on mortgage loans and the time period these take.Ìý I only ever use them to get someone else to check the property legal documents so that I am protected in less safe localities e.g. Pakistan / India.Ìý Then, I pay off the loan in 3-4 years while squeezing every other expense and completely changing lifestyle to enable that.Ìý Again, this is only possible if you don't overstretch on the lifestyle point as explained above.

In Bahrain, there is no risk for title deed properties as there is in the sub-continent so I would never go for a mortgage loan.Ìý Instead, I would go for a personal loan e.g. get one for 20-25K, put in another 25K of own money, get the property and pay off loan in 3-4 years.Ìý Again there is the lifestyle angle of being able to adjust in a smaller place to make this viable.

GCC Complexity:  You lose your job.Ìý Your visa gets cancelled.Ìý Your loan has to be paid.Ìý If you can't pay, you get travel ban and are pretty much stuck.

Bahrain property market
What you need to understand is who is buying in all these new developments in Bahrain.

For the most part, it is NOT locals buying in places like Juffair.Ìý There used to be quite a lot of local buyers for investment opportunities but this has tapered off now with the economy the way it is and the rise in interest rates.

Right now, the following categories are buying in expat areas:

- Few locals, for investment purposes
- Long term residents who are trading up or for investments or to comply with the new rule for citizenship application which came out this year (property in your name)
- Saudis for investment and for weekend homes
- Saudi expats for self sponsorship visas, who want some continuity / security in case of job loss and / or want to keep their families here
- People from the sub-continent; primarily Pakistani's who are moving money abroad due to the economic / political situation and the 10 year visa for 50K BHD is a much better deal then UAE (5 year visa for 5 million AED. 3 year visa for 1 million. Proof of income of 1000 BD vs. 500 BD in Bahrain).Ìý Even the property agents are surprised at the recent increase in the number of people from Pakistan

Almost all of this is focused on apartments.Ìý The hottest selling are two bedroom apartments and primarily in Juffair / Seef.Ìý Amwaj is not as popular due to the new developments coming out, right next door to it.Ìý  And if you consider the people and the reasons for purchase, it is easy to figure out why the villa market has completely tanked.Ìý Villas, in Riffa views, which, some years ago were selling for 420K, right now, can't find buyers for even 280K!!!.

So in the end, demand and supply should balance out if the economy doesn't worsen.Ìý Most likely is that demand will continue to remain a bit lower than supply.Ìý Right now, it is a buyer's market.Ìý You can get 2 beds in Juffair for around 60K - the same 3/4 years ago were selling for 80K.

If they relax the security clearance, then the demand / supply situation would completely reverse as there are literally thousands of Syrians / Iraqis / Yemenis etc who would love to buy but simply don't get the security clearance.

Overall context
As an expat, I would never advise buying property in the GCC from a long term angle i.e. 10 years plus. Purchase should be for the short term i.e. less than 10 years and for a specific reason e.g. visas and / or short term investment for returns.Ìý And even then, the monetary value should not be a significant portion of your overall portfolio and AFTER you already own one property in your home country.

Because simply, you will always be an expat here and subject to removal if circumstances change - you could be a property owner but not allowed to live in the country e.g. if you have a legal judgement against you or a medical condition or a security issue.Ìý And also, there is no permanent residency or naturalization towards Citizenship for most people.Ìý  

Lastly, even if you get a visa through the property, your kids are only eligible to stay on your sponsorship till the age of 18 so it is not a "fire and forget" solution if you are contemplating long term residence.Ìý And imagine, if you die as a property owner, getting succession to your heirs would be a nightmare because if you were a visa holder, the visa is cancelled.Ìý So they have a strict time frame to get succession and apply for a visa once they get the property in their name.Ìý And if they don't live here anymore or the kids are above 18, coming in and doing that would be even more of a hassle.

So consider all angles before you jump the gun.Ìý Or as I said, buy for short term for specific objectives and be mentally prepared to sell it should your situation change - at the same price you bought it or even a bit lower.

As an example, I bought a 2 bed fully furnished apartment in Juffair for BD 60K+.Ìý All cash, no loan.Ìý I will never live there or rather can't live there as I live in a 4 bedroom villa in Riffa Views.Ìý I could have bought a villa similar to the one I live in, again in cash but it is not in line with my objectives and it is too much of a risk tying up money here.Ìý My objectives are to get the visa in the short term and maybe use it as a vacation home in the long term if I move out of Bahrain.Ìý And if I ever move out of the GCC with no possibility of return e.g. go back to the home country or elsewhere for retirement, I will probably sell it.

Think about it; as an expat, because of my job, I spent $165K just to get a visa in order to be able to keep my family hassle-free here. If I didn't have that problem, I would NEVER spend that money and instead spend $250K in Turkey for example, because I, not only get property (much bigger, higher quality vs. the apartment I bought in Juffair), I also get passports for myself and family.Ìý An additional reason is that I have already done that and gotten a passport from somewhere else so there was no competing priority for my spare cash. And that and similar choices is what affluent expats are making - hence the impact on the property market especially higher value luxury property like Riffa Views.

Higher risk / Higher return examples - be very careful

Then if you really want to boost returns, there is something called leveraged investments or in other words, borrow someone else's money to invest .Ìý

The way it works is, for individuals in Bahrain or UAE; you open an account with an offshore bank through a bank in Bahrain e.g. Citibank Bahrain / UAE offers this for it's branches in Singapore and Jersey but you MUST meet eligibility criteria for Citigold i.e. deposit or have relationship of $200K.

Then you invest in a monthly dividend international mutual fund and get the bank to leverage (or loan) that twice or thrice for you e.g. you put $100K into a mutual fund that pays monthly dividends in cash and ask the bank to put $200K into that fund in your name via a loan.Ìý Now assume that the fund distributes 6-8% dividends (normal for funds of this type) annually which means you get a monthly payout of $2000 and after deducting interest of the loan, you end up with close to $1500 in cash per month.Ìý So practically speaking, you stand to make $15K a year on $100 invested on your OWN money - this is a return of 15%.Ìý You can boost this return even more by converting your USD loan into a currency with low interest rates e.g. CHF/EUR and get an additional 2-3% a year.

Of course, the risk level is much higher when you are leveraged as if the funds fall beyond a certain %age, you get margin calls. In addition, loan conversion into another currency carries FX risk as well.

I am invested into this product as well and let me tell you, it was a nervous Nov/Dec 2018 when the stock markets were going down, I was in the hole for close to $30-40K and close to a margin call - so what did I do?  being a savvy investor, I actually held and looked to invest more to do dollar cost averaging.Ìý Right now, I am down $10K on fund value but made back $40K on dividends for this time period that I held it - so I didn't really lose!

Standard chartered also offers this in Bahrain / UAE and also has similar requirements i.e. $200K for leverage.Ìý  However, they are a retail bank so they don't offer as much leverage plus their charges are higher vs. Citibank IPB.

I am just trying to give you a flavor of whats out there.Ìý  I can write on this topic for a 100 pages but just remember, it is all about the risk that you are willing to take.Ìý There is NOTHING that will give you VERY HIGH returns without the RISK that you can LOSE IT ALL.