Real estate can be a great way to generate both long-term equity and short-term rental income. If you’re willing to expand your reach a little on the risk/reward spectrum, buy a property in an international destination can potentially bring even greater rewards.
You will have to deal with additional risk factors – from currency fluctuations and government regulations to the distance and unfamiliarity of investing in a foreign country – but there can be considerable upsides to doing so. For example, you can often buy properties overseas with similar or even better amenities than you can find in the United States at a much lower price. You may also find that you enjoy the thrill of owning rental properties in exotic destinations around the world.
As home prices in the United States begin to fall as mortgage interest rates soar, now may be the time to start looking abroad rather than in your own backyard if you shop for real estate. Here are some culturally exciting destinations that offer beautiful views and resort crowds that can help increase the value of your home and/or your rental income in years to come.
The Philippines has appeared more frequently on the radar of international travelers lately, as the country is blessed with beautiful beaches that regularly rank among the best in the world. Boracay has long been a favorite of jet-setters, but isolated Palawan is often touted as even more beautiful, while Bohol offers some of the best diving in the world and Siargao is a mecca for the international surfing community.
If you prefer city living, Cebu City is home to a number of important cultural sites and is the country’s party heartland, while the rising city of Davao lies under the path of typhoons that plague the country and has its own range of beautiful beaches and culinary delights. Luxury homes on the pristine beaches of these destinations can exceed $1 million, but others with world-class construction in stunning locations – including the beach – can cost as little as $100,000 to $200,000, which makes them perfect rental options.
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Beautiful Belize is a great option for US investors looking to make an overseas purchase. The US dollar is widely accepted in the country, and since it was a former British colony, its laws and customs are quite accessible to the average American.
Laws regarding foreign real estate investment are generous, as locals and foreigners are treated equally. The country is well known for its beaches, rainforests, and jungles, but prices are still a bargain compared to most places in the world, especially the United States. , costs just $600,000, while older but much larger homes can be had for hundreds of thousands less.
Many small towns in Italy have recently made headlines by offering run-down properties to international buyers for as little as a single euro. The problem is that you have to promise to rehabilitate the properties — often at a price of 20,000 to 40,000 euros — and restore it to its former glory.
This type of property requires a particular type of investor but for good it can turn into a goldmine in the long run. The towns where these properties are available may not be as glamorous as Florence or Rome, but they have a quiet country charm that could make both a great family getaway or a lovely long-term rental for Italians.
If you’re looking for a real estate investment just a few hours by plane from America, Panama should be on your radar. Panama uses the US dollar, making it an easy place for American expats and tourists, and it’s surrounded on all sides by oceans and protected land, meaning there’s no place to build endless developments.
Coupled with the government’s friendly policies towards foreigners and businesses, Panama has a lot to offer on the investment side – and that’s not even taking into account its beautiful beaches, idyllic views and large expat community.
Panama is a safe and stable country in Central America that actually ranks as a “high-income nation” according to the World Bank, something most Americans probably don’t know. Rentals near the beach can generate income of $1,000 to $2,000 per month and potentially even more, while the cost of larger homes near the beach can reach $200,000 to $800,000 and more.
Portugal has been the rising star of international travel magazines for years, and for good reason. Between pleasant climate, excellent food and wine, landscapes and breathtaking beaches, the country seems to have it all. Yet it often slips under the radar of tourists heading straight for Paris, London and Rome.
This can be to the advantage of the international property investor, as prices in Portugal remain low. Prices in Portimao, in the Algarve region of Portugal, can cost as little as $2,500 per square meter, for example. That translates to about $232 per square foot, compared to about $1,500 per square foot for a house in Malibu.
Mexico often grabs headlines for its growing violent crime, but there are plenty of safe, beautiful, and potentially great places to invest in real estate. Even with all the recent negative press, Mexico remains the world’s #1 destination for American expats, and for good reason.
Friendly people, gorgeous beaches, amazing food and a low cost of living, for some Mexico has it all. This can be especially true if you are looking to invest in a rental unit, as Mexico is also very popular with travelers from around the world.
To avoid headline-grabbing violence, consider the Yucatan Peninsula in eastern Mexico. The stretch from Cancun to Tulum is known as the Riviera Maya and is full of gorgeous beaches and weather conditions that help make Mexico so popular. A 1,940-square-foot three-bedroom ocean-view penthouse condo in Playa del Carmen can be had for $639,000, offering both rental and capital appreciation potential.
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This article originally appeared on GOBankingRates.com: Why Buying Property In These International Vacation Destinations Could Be A Great Investment
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