What’s Your Biggest Concern With International Rentals?

Question

Hi everyone,

As more investors begin to explore opportunities outside their domestic markets, I’ve noticed that interest in international buy-to-let investments has grown — especially in regions where gross rental yields can still range between 7–9% in certain urban areas.

However, when speaking with other investors, the conversation often shifts away from acquisition price or rental income… and toward operational concerns.

Things like:

- Tenant communication across time zones

- Local legal frameworks

- Maintenance coordination

- Rent collection

- Currency exchange risks

- Day-to-day property management

While the numbers may appear attractive on paper, these practical challenges can significantly influence whether an overseas investment actually performs as expected.

Out of curiosity:

What would you personally consider the biggest operational risk when investing in an international rental property?

Interested to hear how others here evaluate cross-border investments beyond just the yield.

Viktor Pulpan · Answer

Appreciate you sharing that — and I completely agree that country-specific regulations can make a significant difference when investing internationally.

Currency exposure is definitely a real consideration, especially over shorter holding periods, and tax treatment for non-residents can vary widely across European jurisdictions.

Spain is often cited as an example where ownership structures and tax obligations may become more complex for foreign investors, particularly when it comes to global income reporting or non-resident ownership rules.

In Hungary, the regulatory framework for foreign ownership tends to follow a more standardized administrative approval process for residential acquisitions, which may provide a bit more procedural clarity for non-resident investors depending on how the investment is structured.

It’s also interesting that you mentioned STR performance in smaller towns — I’ve heard similar observations where long-term rental yields may be modest, but mid-term or short-term strategies can sometimes make the investment more viable, depending on local regulations.

And absolutely — having a reliable local property management structure in place seems to be one of the key operational factors when investing abroad.

Out of curiosity, have you found that working with a local management team helped mitigate some of those regulatory or operational risks?

Mia G. · Answer

There are so many factors and they vary greatly by country. I can only speak to some of Europe though, as that is where I have experience. For example, currency fluctuations definitely matter. The USD to EUR conversion went from 0.96 USD per EUR to 0.84 in a matter of 6-7 months last year. It's still holding steady at the latter rate, and I don't see it going back up any time soon.

The governments will tax you without regards to write offs. The reason I don't have residency in Spain is because they would tax me on ALL my income at a rate much higher than what I pay in the US with my real estate deductions. I believe there is a way around it if all of your income and personal life is based in the US, but it involves contracting an attorney and going through a long process, which I haven't felt the need to do as of yet. If you do Airbnb, that income is reported to the government either way and you'll need to pay tax on it, usually at a higher rate than much of the US. It would carry over as a foreign tax credit on your personal US tax returns though.

I also learned last year that the Spanish government can just take money out of your Spain-based bank account without notice and call it a tax of some sort. The most recent one was the tax for owning a property as a non-resident (outside of property tax I already pay). The amount wasn't very high, but the fact that all of this can happen without me being able to do anything about it leaves me feeling like I don't have control over my own property.

However, there are many upsides too. There are a lot of towns outside of big metropolitan areas where properties are incredibly cheap. Carrying costs are low. Long term rents are also low though, so STR or MTR would be more worth looking into, as long as local law allows it. Either way, I would find the best property management team to handle the property, instead of trying to manage myself.