Thoughts & experiences on overseas investing for new REIs?

20 Replies

Hi everyone! I've searched the forums for this topic but haven't found anything really from more recently than about 5 years ago. I am a new investor living in the US. My ultimate goal is to own properties in the US, Europe (thinking Portugal right now because I'd like to live there someday), and probably somewhere in South America. My first thought was that it's not a good idea to invest in another country until you are much more experienced, but I'm getting antsy now and want to start sooner. I want to be able to use the properties for my own travel and make cashflow while I'm not using them.

So, I'm curious if anyone has experience doing this and what it is like for you. Looking forward to hearing it!!

I love both real estate and traveling so understand your passion. I've lived abroad and looked into international investing too.

International investing has a high degree of complexity.  You have to deal with very different laws, languages, and exchange rate risks.  It also adds a lot of complexity to your banking and ongoing US tax returns.  It is critical to have the financial wherewithal to undertake this added complexity.  Do you have the resources to deal with a business crisis abroad?  Can you afford a last minute ticket to Portugal or Buenos Aires and hotels to spend a week there straightening out a problem?  I've had to do that in the US, but I can reach all my properties by car in a few hours.

It also seems that the laws in the US are more conducive to building wealth.  I have many real-estate-investor-friends from different countries.  (My wife is even Canadian)   Several of these people even own property abroad but not as investments.  I don't know any of them trying to make money in real estate in other countries.   Most make their money here and use the money to travel. 

I met one guy, once, who was doing syndications of apartments in Paris.  Sounds really cool.  I have no idea how well he survived the pandemic. Can you imagine trying to figure out all the landlord laws related to COVID?  It was confusing enough to deal with the ever-shifting legal landscape here and I'm a native speaker with a great team.

Good luck.  Hopefully we'll run into you in Lisbon some day.

Well If your going to start better make sure you have a great team with you so get everything  started  ahead of time  and will make things easier. But honestly  I would start in states and  see some issue's you may have and how to deal with them. If your cash flowing always can use that money to travel  and get more units and start to buy in other areas. But good luck  with how ever you go about it. 

@Julia Stroud

I love your idea. Many people are doing it and it's going to be more and more common with the unstoppable work from anywhere trend.

I'm not sure how you did your search but I answered hundreds of posts on the (related) topic. These days, everybody and their mother give advice on anything that take their fancy whether they really know what they're talking about or not. Especially when it comes to international real estate investing, my advice to you is to take your advice from people who are doing it.

This being said, @Greg Scott makes great points. I'd qualify his comment about having the financial wherewithal though. You need financial wherewithal if you invest anywhere, including in the US. If you invest 90% of your net worth in Venezuelan real estate, you risk getting in a whole lot of trouble. However, investing 200 k in a condo in Mexico is a pretty benign issue for many middle-class Americans and and they're doing just that in ever increasing numbers. Also, the fact that you'd need to buy a plane ticket and pay for an expensive hotel to visit your properties in case of problems is inaccurate. Places like Scott mentioned have well-established property management business and a whole industry catering for the growing number of international real estate investors. But you preferably do need to have a team on the ground that you trust. And I'd educated myself about the points that Scott brought.

Besides, many West Coast people invest in Florida. Guess what? It takes them almost as long if not longer to get to their property in Florida as it takes a New Yorker to get to their property in Lisbon. And I'd love to have to travel to Lisbon or Buenos Aires at the cost of (in my case) the Canadian taxpayer rather than having to travel to Suburbanville in the middle of nowhere in Canada or the US.

As mentioned by @Anthony Bellesbach , it'd be easier for you to start investing in the US, especially if you're a newbie. But you mentioned that your decision is as much lifestyle as it is investment, if not more.

So, you have two options. Start investing in the US to learn and create a war chest and invest overseas some day or find out how to live your dream right away. Who am I to tell you what to do? I don't know you and I don't know your situation. My philosophy of life is to live my life to the fullest and find a way to do it rather than wait for a someday that might never come. I'm not a newbie though so make sure you consider your own situation.

Good luck and feel free to reach out in case of need. 

Different countries have different laws and different regulations. Why not laser focus on investing in the United States, and use your cash flow to travel the world? There's no need to own property in Europe and South America when you can AirBNB them or stay in a hotel.

There are a few threads here on BP about investing in east Asia. The results weren't good due to locals in cahoots with the police and politicians ripping the investors off. The overall recommendation was you'd need a local family member, friend or someone you've developed a very trustworthy relationship with to rely on to navigate all the crap.

Makes investing in the USA sound a lot more appealing!

Sorry, before anyone asks, don't remember the name of the post:(

I've just joined the BP forum and was running into the same issue: recent content on investing overseas. Anyhow, I am from Colorado, currently living in Berlin, Germany. I'm working on my first investment, a single-family buy & hold in Portugal, that I plan to do short-term rentals with initially. The long-term goal would be to have it as a spot to retire/get residency should I choose to do so.


Since I lived in Europe I was able to travel and see the place during the pandemic. Grateful for that opportunity. My goal for this year is to diversify into a few other markets outside of the EU. Considering Panama and Belize. Anyhow, would love to discuss this further with you since it has been tricky to find other's focused on overseas investments here.

Not sure if you have come across them but I have found lots of great info with Live and Invest Overseas. Happy to share some of the resources I've got through them.

Hi Julia,

I've just joined the BP forum and was running into the same issue: recent content on investing overseas. Anyhow, I am from Colorado, currently living in Berlin, Germany. I'm working on my first investment, a single-family buy & hold, that I plan to do short-term rentals with initially. The long-term goal would be to have it as a spot to retire/get residency should I choose to do so.

Since I lived in Europe I was able to travel and see the place during the pandemic. Grateful for that opportunity. My goal for this year is to diversify into a few other markets outside of the EU. Considering Panama and Belize. Anyhow, would love to discuss this further with you since it has been tricky to find other's focused on overseas investments here.

Not sure if you have come across them but I have found lots of great info with Live and Invest Overseas. Happy to share some of the resources I've got through them.

@Joshua Flowers

Congratulations for starting your international real estate investing journey. It can be lucrative and fun and frankly should be! You're educating yourself from the get-go so you're on the right track. And Portugal is a beautiful country and can be a great place to invest in real estate!

Yet, before promoting Live and Invest Overseas, I'd make sure I understand what their business model is. I became a member of BiggerPockets a few years back. All I've been getting from them on a regular basis are my daily alerts and alerts about posts I've been responding to, both of which I've been requesting to receive from them. The only "unsolicited" emails I get from them is a weekly digest of interesting articles. And when, from time to time, when they publish a book, they send me a promotional email about it, which I'm happy to get.

Contrast this with Live and Invest Overseas. I came across them and subscribed to their newsletter. After that, I received several unsolicited promotional emails a day trying to sell me something. They were relentless! The problem is they write articles that appear as informative about a given country and, almost invariably, you'd find out that they're promoting a project in that country a few weeks later or they'd be a conference in which they invite people who have projects to sell and for which they get commissions. You can't give objective information about a place when you've got something to sell there.

Their "brainwashing" seems to have been working on you since you mention investing in Belize and Panama, two countries they're heavily promoting.

A while back, I replied to a post about investing in Belize in which I lengthily explained in detail why I believe it's one of the worst countries for real estate investing. I'm not gonna repeat it here but you're welcome to PM me. I tried to find it quickly to post the link here but it didn't work. You could find it through my profile but there more than 500 posts there now. The only reason I'd buy something there is if I was going to retire or vacation regularly there but this ain't happen anytime soon. Since you're planning to retire in Portugal, I guess it's not your case either.

Panama is a different story. It can be a good place to invest but it's by far not the best. Panama has basically two things going for it: Panama City and the canal on the one hand and the beaches on the other hand.

Because of the Panama Canal, Panama City has been compared to a little Hong Kong and Singapore. There is a bit of truth in that but it's been wildly exaggerated because Hong Kong and Singapore are much better located and are much bigger cities. I don't know if you've been but it's quite impressive. I remember the first time I flew out of Panama City. I sat by the window and saw the skyline from myself from the sky and was very impressed. A few hours later, I landed in Miami. I'd been to Miami very often but, because I usually have an aisle seat, it was the first time I saw Miami's skyline from the air and I thought "Is that it?", after comparing with Panama City, a city much smaller. Panama City would be an ideal place for short-term rentals but they're illegal there. Long term rental yields aren't very high given the discrepancy between real estate prices and the average salary there. You can do much better with long term rentals in other countries than Panama.

Where you can do short-term rentals in Panama is at beach locations. Panama has nice beaches. Now I don't know about you but while I have a lot of friends vacation in countries like Mexico and the Dominican Republic, none go to Panama. So I rather invest in Mexico and the Dominican Republic for that and many other reasons. What my friends do is corroborated by the statistics. Why is that? Because Mexico and the Dominican Republic have done a great job promoting their beach destinations and bringing flights and infrastructure and Panama hasn't. This is supposed to be changing lately but Panama can't compete because it's too far from North America compared to Mexico and the Dominican Republic. And, then, if you're ready to travel as far as Panama, you'd probably rather go to neighboring Colombia, which has even nicer beaches and so much more to offer than Panama. And case in point, tourism in Colombia is booming.

Don't believe all that you read. Ask you what's the writer's motivation and check the statistics for yourself. They rarely lie!

Hope this helps!

@Joshua Flowers

While I was positive about Panama City in my reply to you, I forgot to mention that there's been a large oversupply of condos there and they're continuing to build unabated. I have friends in the industry there so I know it first hand. At the same time, Live and Invest Overseas and others who follow the same model have been promoting condo deals there. Mind you, it might not be such a bad thing if you plan to hold long term.

I believe they invest there themselves so, in a way, they're eating their own cookie. Let's give them that. However, it's important to understand that, when they promote a deal, they make their money in fat commissions and have no money to lose if something goes wrong with the project or the market when it comes to that project whereas the investor, has all to lose. Therefore, they'll tell you the good but you won't hear from them that there's an oversupply of condos in the market. It's not in their interest to tell you that. So you need to find out by yourself.


@Julia Stroud

Agree with virtually everything said above. We started later with REI Self Storage and subdivision, wish we had started earlier. Also have made overseas investments in Belize.

Thoughts U.S.:

Invest in Texas first.  Do you have $5,000?  As mentioned above, start building your war chest and more importantly your experience and team.  

a.  Texas has the greatest laws on Tax sales and off list sales.  My brother lives just south of you, and last year bought two properties for $3,000 each.  Off list for $10,000 each.  One is on a major road in town, and they gave to his son who has it listed for $65,000 for 5 acres.  Normal $80,000 per acre.  Has a few issues but at least two nice home sites possible.  Try to buy land and not houses at first, until you understand why?

b.  Purchased subdivision lot for $10,000 back taxes and sold for $40,000 two years later.  Now worth $80,000 about 10 years later.

c.  Don't own anything, but get into the REI game. Your in Austin.  Tons of these BP members want into Austin from other states.  Example:  Offer on site third party tour reviews.  Video the property, neighbor hood.  Develop a review check list.  Charge them $100.  Offer monthly or quarterly onsite property reviews.  Whether new construction or existing rentals.  Charge them $30 to $50 per 30 minute visit.  Develop a review checklist and photo checklist. 

Chump change above?  Here is what is going to happen.  Your going to really get to know your market.  Get to know what other investors see value in.  Research their deals.  After a while one of them is going to ask you to partner with them or throw you a deal, that doesn't work for them, but works for you.  Your going to get to see Flip work going on.  Meet the Trades people and figure out who is good or bad, on someone else's dime.  Meet Realtors.  Etc. Etc. Etc.  Your going to get experience on someone else's dime.

Dumb- keeps making the same mistake.

Smart- Learns from their mistakes.  Has to pay for it.

Brilliant- Learn form other peoples mistakes.

d.  Visited near you two weeks ago, helped a friend identify a property for Self Storage and made an offer.  Spent 3 days and looked at 10 properties.  Not in my wheelhouse, but saw the need and locations for the following types of investments: 1.  Wedding/event center- brand new Oil lay down yard, with nice building, Oil is in a bust mode now., 2.  Need for Childcare center, Dance/Gymnastic/TaeKwonDo location, found great intersection, land, and neighborhood., 3.  Contractor Incubator location.  All other locations filled up.  These are higher priced investments, but your locale due to the growth, has a lot of new opportunities in neighborhoods that have out grown their support businesses.  Key point is your area is in a growth mode creating a lot of investment opportunities.

Overseas:

c.  Use your psychology background.  See the people above recommending you do this or that and why?  Forget whether they are right or not, but they are using Market Psychology.  Two beaches are the exact same and same price, which do you go with?

d. After I Boxed, I loved being close by so I could go home take a shower, get something to eat and go to sleep. No matter what type of REI you do, whether things go good or not, you will be "beat up" to get things done. Start first in the U.S. and more importantly Texas, until you have your experience built up. A lot easier to deal with things at home.

d.  Prior to making your overseas investments I would do the following:  1.  Vacation there several times, 2.  Do at least 2 one week trips (non-vacation) and spend one to two days with a different Realtor per trip and see properties.  You want to get your Expectations established.  Look at the type of properties you want to invest in.  Don't invest yet.  Start to build a team.  Electricians, contractors, lawyers, realtors, landscapers, management firms, etc.

e.  The majority of overseas investing, you will need to bring the "Cash".  Very few if any U.S. banks or investment firms will invest overseas.  With that said, don't wait till you have $300,000 to invest there, once you decide.  You might start doing some land investments for under $50,000 just to get your feet wet and this will cause your to start to develop a "Team" over there and forces you to learn doing business there.

f. In South/Central America, you are not a human. You are "Money". Although that sounds brutal recognize that. After that, make a "Family" down there. You have to have someone watching your property or it will get stolen or vandalized. My family down there is "Marc" my local contractor. Teaching him REI and investing. He could steal from me, but as I have told him, "You can either eat the Chicken or have a Egg per day for the rest of your life.". He understands that. Since I have known him for only a year, he now has a nice free living place, I have a free watch person, he owns a house lot which he bought for $3,000 which you and I would have to pay $30,000 for. Locals, get the Local deals. He has a new side rental equipment business now with a concrete mixer, scaffolds, lawnmower and weed eater. Small things for us, but huge for him. He is my family. Sends pictures once a week and calls as needed.

"Start small and Make Your Big Mistakes Early."

@Henry Clark

You almost wrote a manual! ;-)

I'm not sure how a property can get stolen, apart from somebody exercising squatting rights in case it's occupied because you haven't checked it out for many years. In any case, I don't agree that you are just "money" in Central and South America and that you have to have somebody watching your property otherwise it gets stolen or vandalized.

That might be the case in a place like Belize (again one of the reasons I'd avoid investing in that country) but it's not right to generalize it to the whole region. While it might be true in other countries as well, it's not the case in countries like Mexico, Costa Rica, Panama, the Dominican Republic, Colombia, Brazil or Uruguay for example. Blanket generalizations are rarely helpful.

@Julia Stroud

@Mike Lambert

Mr Lambert makes a great point about blanket generalizations are rarely helpful.

As you pick your country, evaluate the following.  I will use Belize as an example.  It is actually one of the most "wealthy" countries on a per capita basis than the majority of Central and South America, again a sweeping generalization.  Let me explain "Wealthy".

A normal Belizean would normally pay about $60,000 to $100,000 USD for a modern house.  Quite small.

A normal Belizean trades/craft person will be paid $25 to $50 BZD per day, that is $12.50 to $25 USD per day.  You can hire a illegal immigrant from neighboring Guatemala for $8 BZD or $4 per day.

They have to pay for their kids to go to school, uniforms, meals, etc.  Most do not graduate from 8th grade because they can't afford it, plus there are few jobs that warrant it.

As you can see above, a normal Belizean can never afford to buy a house.  They just can't save enough.  Now you come in, they see you as "Money".  Again, this is in one of the most "Wealthy" nations in Central and South America.  The poorer nations, do not have a different view of you.  If you can bury yourself in a gated community, you will be fine.  Go to Cancun or Cozumel.  Tell the driver to take you a mile outside the tourist areas.

All the countries Mr Lambert, mentioned I ticked off as we searched for a Property.  They all have positives also that are better than Belize.  You have to weigh your total package. Let me try to help you understand my views, I prefer Houston over Dallas.  Lived in both.  Yes, I prefer Belize.  

Belize- official language is English, since it was a British possession; Belize Dollar is pegged to the US dollar 2 to 1, you will see in a second why that is important; When you buy property in Belize, you actually own it, since they are under common law like the UK and US;  2 hour flight to Houston;            Petty theft is common; Top 10 murder ratios in the World (small population, plus majority of murders are in a 2 mile square section of Belize City; not the best roads; Can't handle severe medical issues; smaller medical issues are cheap and over the counter medication (prescribed in the US) is available.

Mexico- yes a lot of US expats live in Mexico.  If you get a chance check out San Luis Potosi.  Mexico's interstate system is far better than the US's.  Do me a favor.  Go on the interstate between two towns an hour before sun down and stay there an hour after sun down.  Tell me what you see.  Tell me what you did next.  Tell me what you felt.  That is the country you will be living in.

Costa Rica/Panama/Dominican Republic-  Great places, better beaches than Belize. Compare land prices between them and Belize.  Also flight times.  Also in Panama and Costa Rica, stay near the cities.

Colombia/Brazil/Uruguay- Inflation/Deflation/Currency valuation.  Also how fast these can swing.  Have someone explain how to get your money out during inflation, deflation and normal periods. Won't go into the rest of the items.

Key is to build a matrix of the key things you are looking for and require.  Then do your visits and make your contacts.

First though get on your county Tax lists and off list properties and start building your wealth.


  

@Henry Clark

As you rightfully demonstrate, the average Belizean can't afford to buy an average home, let alone the expensive homes that foreigners buy, which actually only reinforces my negative view about investing in that country. If, for any reason, foreigners stop to go there and/or buy property there, there is no market for the property owners to sell into. Contrast that with a country like Mexico, which has a small wealthy and even uber wealthy class and a growing middle class, whereby a large and increasing number of Mexicans can afford the same type of properties that the foreigners buy. It's a similar story in countries like Colombia or Brazil, where there is a culture for the well-to-do to invest in real estate, probably inherited from the past hyperinflation days.

I'm still not getting why people pay big money to buy a property in Ambergris Caye or Placencia when they can get a much nicer property in the much nicer cities of Playa de Carmen or Tulum, which is not very far up north.

Otherwise, I'm not sure where you're getting your information from but I'd encourage you to check the accuracy of your sources.

Belize isn't one of the most "wealthy" countries on a per capita basis than the majority of Central and South America. It's actually one of the poorest. And, if you remove the wealthy foreign retirees, it'd be much worse. Belize has no industry and no middle class. It only has tourism. If something would happen to its beaches, the country would be in even deeper trouble. Unless I don't read you properly, you seem to suggest that Mexicans and Guatemalans are poorer than Belizeans. Yet, the statistics show otherwise. According to the last statistics from the International Monetary Fund, the GDP rankings are:
Uruguay: 46;
Panama: 52;
Costa Rica: 58;
Mexico: 71;
Dominican Republic: 76;
Brazil: 83;
Colombia: 90;
Guatemala: 100;
Belize: 112.

The hyperinflation days are long gone for countries like Colombia, Brazil or Uruguay. That was 20 years ago. can I suggest you go visit? You'd be blown away by the progress these countries have made over the last 10 - 20 years.

As to Mexico, everybody knows that it has a problem with drug-related violence but it is concentrated in the kind of areas you mentioned where foreigners don't go, let alone buy property. If the areas where foreigners vacation, live and retire were not safe the number of foreigners visiting, buying property and moving to Mexico wouldn't keep increasing year after year. As usual, the proof is in the pudding.


@Julia Stroud ; @Mike Lambert

@julia, as mentioned keep working on building your portfolio as mentioned above.

@Mike Lambert  There is the Finance side of things and there is the investment climate part of things.  Make sure people understand the investment side of things and the risk by country.  If the investments you are talking about are gated communities, or primarily Expat communities, state so.  My Cousin, Brother and Sister/Brother in law have all lived in Panama; you have to have someone watching your place.  Belize is that way.  You say the poorer countries than Belize are not that way, I will not disagree with you, if I did I would be making a sweeping generalization that the poorer a country is, the more crime there is.

Below is the average annual wages in USD.  Belize is at the top, except for Costa Rica and Panama.  Is GDP or Annual Average wages a better metric for individual wealth, not going to have that discussion.

To the far right is the inflation rate.  I would like you to look at the very bottom at Venezuela, this is not a country @mike lambert recommended today.  Go back a few years ago and it was one of the most wealthiest Countries in SA/CA.  Now it is virtually broke.  My point, don't just look at the Finance side of things, look at the overall investment climate. Look at their political climate and form of government.  Your investment is one Coup away from Zero.  Portugal and Spain are sounding great right now.


Source Salary Explorer
USD



Avg Annual 2020 infl rate

National Curr Exch rate Wages statista
Costa Rica 28,300,000 608.460 46,511 0.78%
Panama 25,400 1.000 25,400 -0.83%
Belize 47,000 2.000 23,500 0.80%
Mexico 399,000 19.710 20,244 3.40%
Brazil 103,000 5.300 19,434 1.90%
Colombia 56,300,000 3478.000 16,187 2.44%
Guatemala 126,000 7.790 16,175 2.14%
Uruguay 396,000 42.410 9,337 9.90%
Dom Rep 238,000 58.360 4,078 3.32%





USD


2.30%










Ven 2019


1370001.00%
Ven 2020 1,590,000 0.000000760159 1 0.00%

2020 inflation is compared to 2019.


@Henry Clark

This isn't about me being right or wrong. And it shoudn't be about you being right or wrong from that matter. My only interest at this stage is to make sure that nobody acts on bogus information.

I'm not sure this is the place to explain what GDP per capita and I'm not sure what to say if don't trust the International Monetary Fund. Yet the supposed statistics that you quoted are completely bogus. I don't know if they've been badly compiled and/or manipulated and, if they are, it's clearly not your fault.

Anybody who pays attention and has any serious knowledge of the matter could tell that these figures don't make any sense and can't possibly be right. Uruguay and Panama are quasi developed countries and are undisputedly the wealthiest in Latin America and Belize definitely isn't part of that club. Yet, according to the statistics you quoted, Uruguay would be at the bottom of the salary scale with an average salary three time as low as that of Belize. Really? Mind you, you don't need statistics to know that. Go to Uruguay, Panama and then Belize and you'll see the difference immediately. Or check pictures online.

Let's be clear, you're not responsible for incorrect statistics published by others. Many people have unknowingly quoted wrong statistics, including myself. After it happened to me, I've taken the habit to check whether statistics make sense before I use them. It's become such a habit that I even double checked the IMF statistics even though they come from a trustworthy source. You never know. Even the best clerks can make mistakes!

Have you been to Panama since the fall of general Noriega in 1989? It's one of the countries I've felt the most safe and I've gone places all over the world. Most of the real estate, including luxury, isn't within gated communities, as there's no need for that. Even in Mexico, so much (luxury) real estate is outside of gated communities.

Finally, to illustrate how It'd be dangerous to invest in Central and South America - outside of Belize of course ;-), you take the example of the only country that has turn really badly, Venezuela, where no foreigner invests anyway. Yes, you're right, Venezuela used to be a much wealthier country before it turned to socialism/communism. Because it's been such an obvious failure, even the other very few countries that were tempted to follow in the adventure (think Nicaragua, Bolivia or Ecuador) have course corrected.

So, the odds of another country in the region turning into another Venezuela is very low. Mind you, the probability is very low but it's not 0 (after all, Venezuela did it). That's part of the political risk of investing in those countries. You probably know the adage: no risk, no return. And investing in the region might not be the best for widows and orphans. I'll be the first to acknowledge that because you never know what can happen. And let's be clear, if I happen to invest in a country that turns the Venezuelan way, I'll be the first to sell.


@Mike Lambert

Really appreciate the insights. I agree LAIOS can be a bit relentless with their email campaigns. I've found a way to weed through them to get the info I want, which at this point is mainly residency and tax info on living and investing in Panama. I think I have checked Belize off my list for now. Thanks to some of what you shared, I did more digging and Panama seems like a better next move for me. I will PM you though, as I am interested in hearing more on your take about Belize.

Since I am not just focusing on investment property, but also interested in getting a second and third residency, as well as have a place in two different countries to split time between during retirement, I am not just making my decisions on something that I will potentially turn around and sell in 3-5 yrs, though will stay open to that idea if it makes financial sense.


Anyhow, thanks for taking the time to respond here and to my other posts. Super helpful!

@Henry Clark and @Mike Lambert - Good points, comprehensive analysis, and nice theoretical and paper exercise but I would like to share with you my practical experience of living and investing in Latin America and Europe.

Whenever you are investing overseas, you need to consider in your analysis 2 major risks: FX/currency and regulations. These are 2 elements that are new to the risk-reward equation in comparison to domestic investments.

Currency is a MAJOR risk. Rule of thumb, US dollar is still the strongest currency and during any economic crisis, foreign investors will seek investments in USD as hedge to the local Emerging Markets currencies. As example, most Emerging Markets currencies depreciated 25-35% vs USD in 2020. The investor might focus too much on foreign markets with attractive 7-10% cap rate and completely overlook the volatility of the currency.

Regulations: Europe tend to be way more regulated regarding real estate speculative market and stricter tax rules. @Joshua Flowers   might remember that investing in real estate in Berlin in 2010-2012 brought AMAZING returns as of key European capitals was still very underpriced in comparison to peer cities. HOWEVER, there are a lot of different tax rules in short term and long-term capital gains.

REI in foreign countries require a LOT of due diligence, this is not for beginners…

@Alesandro Breguez

Without getting to much deeper into this post.

One of the reasons we picked Belize is because it is tied 2bzd/1usd to the US dollar, to your point on FX.  You can also see my comments on inflation above, which is also tied to FX/government.

Regulations is another reason, we picked Belize, its land laws were developed under the British Common law system, which is similar if not the same to the US's.  Due diligence and you own the property.

I believe @Mike Lambert and I are looking at the same thing and have two different views/approaches.  Because we are using two different sets of values.  We looked for a spot within easy flying (2 hours to Houston, versus 11 hours to Maui, relatives there).  Low cost of agriculture land, Teak plantation.  Easy access to both Ocean and inland.  And value add propositions.  @Mike mentioned Belize does not have a ready Real Estate market and I totally 100% agree with him.  For our approach this is good.  No where in the US can I buy a pristine piece of ground on a clear blue/green river for $4,000 per acre, yet be near the cities.  Was on the market for 15 years.  Or buy 5 miles away 100 acres of nice farm/timber ground for $35,000 per acre.  Local side deal.  Can't do that in Costa Rica/Panama near the towns or in the countryside.  We are not looking for Condos or Houses to flip or as investments or Air BNB's.  Our investment time Horizon is 25 to 35 years, three way proposition.  We are not looking to make money off the local citizens, because it isn't there.  Belize is "Rough" which is what I am looking for, from this investment.  For refined or city, Montreal is great, Seoul is wonderful, Nice-France is fun, Northern Italy relaxing, actually Uruguay per @Mike mention looks like a very interesting place.  These aren't my investment arenas.

@Alesandro Breguez

I don't agree that foreign currency is a major risk when investing in Europe or Latin America. By investing there, you're actually decreasing your risk in two ways: you invest in different markets and in different currencies. Having all your assets in one place and one currency is what is really risky. The most important rule in investing is diversification. By having all your assets in US dollars, you're at the mercy of a fall in the US dollar. By having assets in other currencies, you're actually hedging against a fall in the US dollar.

And this is exactly what's been happening. Contrary to what you mentioned, the US dollar has tanked against most currencies all other major currencies, including the Euro, The Pound Sterling, the Canadian Dollar, the Australian Dollar and the Japanese Yen. Check the charts on xe.com! And this, especially since the beginning of the pandemic. The Mexican Peso and the Colombian Peso, after falling at the start of the pandemic, have recovered most of the ground lost. The Brazilian Real is still significantly lower but the 25% - 35% fall is a wild exaggeration. Again, check xe.com or any other currency charts.

Most experts believe the US dollar has further to fall, as the FED continues to print money like a drunken sailor. And more and more people question the future of the US dollar as the world's reserve currency. If it was to lose that status, Americans sadly would become poorer in a heartbeat, as the world's central bank would dump their US dollar, which would be in freewill as a result. And this is more and more likely to happen as Asia becomes the dominant economic force in the 21st century.

Mind you, if you absolutely want to stay in the USD, properties in Mexico, the Dominican Republic, Costa Rica, Panama, Uruguay and Argentina trade in US dollars for all intents and purposes. However, most pundits agree that currencies like the Colombian Peso, the Brazilian Real and the Turkish Lira have fallen way too low in relation to their current, past or imagined economic troubles. This means that, by investing in their respective countries, you're more likely to end up with a huge currency gain than a currency loss. In the absence of hyperinflation, a currency can only go so low. As was mentioned in a BP podcast this week, the poor look for reasons not to take action where the wealthy see opportunity (I'm not suggesting that you have the mindset of a poor here by the way).

When it comes to regulations and taxes, I was born and have spent most of my life in Europe so I can agree that many jurisdictions are heavily taxed and regulated but some are not. It's like in the US, certain states are heavy on the regulations and taxes site and others aren't. In any case, you just have to take them into account in your calculations and, if the result is good, who cares?

Latin America is much less regulated than the US. This is the reason why I decided to invest in short-term rentals in Latin America rather than in North America. In North America, short-term rentals are increasingly regulated, if not downright forbidden. And, in the places where they aren't, you run the risk that regulations with tighten after you have invested. You generally don't run such risk in Latin America.

Finally, REI anywhere requires a lot of due diligence. Yes, investing overseas might require additional and/or more complicated due diligence. So I get why you suggest it's not for beginners. Personally, I don't like your generalizations, especially since I've done it as a beginner myself. If you're ready to do the work and have the necessary knowledge or connections or know people who do, you can do it. As Marie Forleo said in today's BP Podcast, everything is "figureoutable". Positivity always trumps negativity!

@Henry Clark

Yes, I could have added Belize to the list of countries in which you'd de facto be investing in USD. I didn't because the country is small and I wouldn't invest there.

Besides the currency issue, I totally get why some people like Belize. It's English-speaking, cheap, has a beautiful coastline and rarely make the headlines. I don't like to be unnecessarily negative; you already invested there and I hope it'll turn out to be a good investment after all. Yet, all the country has going for it is international tourism. If tourists stop coming there for any reason, it'd be catastrophic for the country.

You have the same exact beautiful coastline a few hours drive up North in the Riviera Maya, which is one of the most visited places in the world. It's not only dependent on foreign tourism and it's supported by massive investment in infrastructure and marketing from the government and the private sector that a country like Belize could never afford. You can flight direct into Cancun from pretty much anywhere in the world while getting to Belize is much lengthier and more complicated.

Yes, land is much cheaper in Belize than it is in the Riviera Maya, like it is much cheaper in the middle of North Dakota than it is in New York City. However, making money is the name of the game for an investor, not buying cheaper for the sake of buying cheaper. After all, you get what you pay for.

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