For US investors, foreign real estate is a viable way to earn a passive income with less capital than you might otherwise need at home. The benefits are clear; you can purchase assets with less money, tap into large tourist markets in specific areas, and take advantage of well-established property management companies designed to help you earn money with little or no effort on your part. However, not all markets are created equal, and choosing a destination in which to sink your hard-earned cash can leave you feeling a little overwhelmed.
Of course, rental income will vary depending on where you choose to invest, and maximizing your returns is usually at the forefront of any investors mind. However, other factors should be considered before you decide on a specific investment, and these will change from place to place. Here, we take a look at 5 top destinations for real estate investment abroad and provide a little background information on each so that you are fully prepared to make an informed decision.
Rental Yield — 7.48%
A long-time favorite for American investors, Costa Rica not only provides instant access to a huge tourist market but also boasts some of the most welcoming laws and regulations in the world for foreign investors. In essence, you can expect the same rights as locals when purchasing Costa Rican investment property, plus prices that will make any place in the US look expensive. Additionally, US investors have easier access to the markets than some other, far-flung destinations. Read more on investing in Costa Rica real estate here.
Rental Yield — 6.13%
Property investment with an eye on rental income is a relatively new phenomenon in the Philippines. Naturally, US investors may be wary of a country involved in an out-and-out drug war with the US, however, the region’s fastest growing nation has plenty to offer anyone willing to take a bit of a risk. Tourism is a fast-growing industry here, and the country also benefits from a sizeable English-speaking workforce. However, one thing to note is that foreigners cannot own the land on which buildings stand, a fact that puts some investors off.
Rental Yield — 5.75%
Another Central American country that may provide investors with excellent rental incomes, Panama is generally considered stable despite its troubled past. Very much an emerging market for foreign investors, in order to stimulate growth, the government of Panama has introduced a number of lucrative tax incentives. A minimum $50,000 investment will give you 20-year exemptions from real estate taxes and import taxes among others. Additionally, a 15-year exemption on income tax is available for anyone investing in property designed for tourist rentals.
Rental Yield — 5.48%
While rental yields are relatively high and property prices generally low, the Caribbean as a region is known for levying very high taxes on buying and selling real estate. However, in relation to the price of property, investors can still expect to get good returns even after tax. One thing to note in Barbados is that the costs involved with real estate purchase are generally borne by the seller.
Rental Yield — 4.17%
After the last two economic crises, Greece was one of the European countries hit most hard. This had a knock-on effect in the tourism industry, with many popular destinations noting severe declines in the number of visitors. For investors, property prices remain very low, however, the tourist trade is picking up quickly, and many people are cashing in. Additionally, there are countless abandoned buildings in major cities and tourist hotspots that can be bought for a very little cash. It stands to reason than that there are significant returns to be made in places such as Athens, where the rich history and culture will always draw the most tourists.