The overseas property market is booming, and now is a better time than ever to invest in real estate. Offshore property stands out among investment options because it’s a hard asset that provides diversification of asset class and likely currency. If you’re looking for an opportunity to generate cash flow while building real, long-term wealth, this might be it.
Check out more of our “Best of 2021” picks in the following categories:
- Best Places To Retire In 2021
Whether you’re contemplating a first purchase overseas or looking to expand current foreign property holdings, here’s where you should focus your attention and your capital this year.
1. Panama
Panama is one of the best places to buy real estate overseas. We recommend Panama for two things specifically: rental apartments and agricultural opportunities.
Panama City, where resale transactions have slowed, is and will continue to be a buyer’s market through 2021. We see this year as a chance to buy on a dip. Long term, bullish on the Panama City rentals market.
Yields continue strong… though not as strong as they were a couple of years ago, primarily because rents have softened.
Argentine, Colombian, and Venezuelan buyers have helped keep the Panama City market stable and growing over the last 10 years, even while other markets in the region have struggled or even collapsed.
Today, North Americans and Europeans continue to invest, but it’s Panama’s relationship with China that we predict will fuel this economy through its next stage of growth. If the Chinese come in volume, as they did in Vancouver in the 1990s, Panama City property prices will soar.
Investment Opportunity In Panama
The second big opportunity for making money from real estate in Panama in 2021 is productive land. This country’s interior is a fertile bread basket. Individual investors can participate in organic plantations for turnkey agro-profits.
2. Brazil
Brazil is a big country made up of many different property markets, some more interesting than others. We recommend focusing on the Fortaleza area. This coastal region is a top destination among Brazilian tourists. Rentals targeting the local holiday market can earn better than 8% net yield reliably.
We also recommend an investment on the beachfront along this coast, where lot prices are a global bargain.
The Brazilian real remains stable against the U.S. dollar and historically weak relative to the rate of 1.6 reals to the dollar of a decade ago. Click here for currency conversions at today’s exchange.
3. Dominican Republic
In the Dominican Republic, focus on the capital, Santo Domingo.
The Dominican Republic is enjoying continued strong growth, as well as increasing foreign direct investment. All those business travelers coming to get in on the country’s economic boom pass through Santo Domingo… and they all need places to sleep.
The Dominican Republic is one of the first tourism success stories post-pandemic. With an increase of 10% in holiday-goers estimated for July 2021 (compared to the same month in 2019), the DR’s tourism industry is set to hit new highs.
A furnished rental for either of these markets—the business traveler or the holiday-goer—can be an excellent source of cash flow and, if you buy right, should enjoy good capital appreciation.
Maximize Profits With A Pre-Construction Investment
Investing pre-construction in an apartment intended for the business traveler market is one of the best available opportunities. Business people staying longer than a week prefer an apartment to a hotel.
It can be possible to qualify for financing as a non-resident of the DR. We don’t recommend financing property overseas, however, unless you’re sure you can cover the mortgage payment even without any income from the financed property.
That said, Santo Domingo city apartments rent well, and you should have no problem covering your mortgage payment from your rental income.
4. Thailand
We like Thailand for agriculture primarily but think this country deserves attention for its strong economy and expanding tourism industry, as well.
The downside of Thailand is that foreigners are restricted in how they can own property. Foreigners can only own land leasehold in Thailand. A foreigner can hold freehold title to the construction on the land, but, unless your house is portable, you might not take comfort in that.
As a non-Thai person, you can own a condo freehold as long as foreigners don’t make up more than 49% of the ownership of units in the condo building.
For this reason, the condo market is where most foreign investors focus their attention. A condo is also cheaper and easier to manage as a rental than an individual property.
In 2018 and 2019, pre-pandemic, Bangkok was the number-one visited city in the world, receiving more visitors than London or Paris. The tourism industry in Thailand suffered during the pandemic but is slowly recovering… This is your chance to get in on the dip in Bangkok, before it makes its comeback when all those tourists return.
5. Portugal
Property markets in Portugal have been on the move since 2015. Some neighborhoods in Lisbon, for example, are now priced beyond what we believe makes sense for property investment… Other areas of this city continue to offer good value and opportunity, especially if you’re up for a renovation project.
In 2021, we recommend focusing on the lesser-visited areas along the country’s Algarve coast and the Porto region north of Lisbon.
Portugal is another country where it’s possible for a non-resident to get a mortgage.
6. France
We’ve been sold on Paris real estate for decades. Prices go up and down, as they do everywhere, but a piece of Parisian real estate is one of the surest imaginable stores of wealth long-term.
The strength of the U.S. dollar is creating euro bargains for American buyers—another good reason to be looking right now at both Portugal and France.
France is another country where foreigners are eligible for in-country financing. In fact, interest rates for French mortgages for foreigners are at historic lows of as little as 2.05%… with loan-to-values as high as 85%.
7. Mexico
Mexico remains a top destination among Canadians and Americans for both tourism and retirement. Thanks to restricted travel and an expanding middle class, Mexico is enjoying good growth in the local tourism market in 2021.
All that combines to make Mexico a top choice for a property rental investment.
Top markets include Puerto Vallarta on the Pacific coast and Playa del Carmen on the Riviera Maya. In both of these popular tourist towns, a rental property can generate excellent yields.
Mexico offers financing options for non-residents, generally from U.S. lending institutions set up in Mexico specifically for that purpose.
8. Belize
Tourism and resident expat markets on Belize’s Ambergris Caye are set to continue to expand through 2021 and beyond. This Caribbean island is a top choice for a rental investment, making Belize one of the best places to buy real estate overseas.
On the Belize mainland, Cayo is a top option. Here quality rental accommodation at a reasonable price is hard to come by. If you were to build a high-quality rental, you could make a good yield by pricing your property competitively relative to the local hotels (that aren’t up to standard).
9. Turkey
Turkey is having a record-breaking year for property sales, up 107% compared to May of 2020 thanks, in large part, to foreign buyers. Foreign investment has increased in part due to Turkey’s successful CIP, but this accounts for only 20% of overall sales. Turkey is also seen as an attractive destination for lifestyle and investment opportunities. Half of this year’s property sales took place in the country’s most vibrant and historical city, Istanbul.
Istanbul was the world’s ninth most visited city in the world in 2018. That was behind brand-name cities like Paris, London, New York, and Tokyo… but ahead of other major cities, including Berlin, Barcelona, Rome, and Los Angeles.
In addition to tourism growth, Istanbul and Turkey in general are enjoying strong economic growth as the population increases and the middle class expands. Turkish buyers are re-entering the market due to reduced interest rates. Both tourism rentals and student rentals are appealing rental investment options.
One of the biggest selling points for an investment in Istanbul is the low cost of entry. A rental unit in this market is within most any investor’s budget.
10. Poland
Poland might not be the first place to spring to mind when considering an offershore property purchase… Yet this country may be Eastern Europe’s best kept secret. Poland’s tourism capital, Krakow, was enjoying a booming tourist industry pre-pandemic, with 10 million visitors annually. It’s waiting to see the return of its tourists soon.
Krakow has 10 universities, resulting in a lively student population as well. These thousands of students need somewhere to live, and so the demand for both student accommodation and vacation rentals in Krakow is high. You can purchase an apartment in the city center for less than US$100,000 and quickly profit from the high rental demand in this flourishing city.
