Best Place to Buy Foreign Property?

Question

Hi everyone,

I currently live in the Middle East. I am teaching there overseas, but i'm originally from Canada. I am thinking about buying a rental property and I am looking for advice. I have done some research and have heard good things about Panama and Dominican Republic. They are quite far away so I probably wouldn't be able to visit there. Has anyone bought property without seeing it in person? What is that process like? I have about 95K USD. I want to keep around half of that in my ETF and emergency fund, but i'm flexible.

Mike Lambert · Answer

@Justin Black

While properties in these countries can be much cheaper than in Canada or in the Middle East, I'm not sure you'd want to buy the kind of properties you could get for $47,500. Or, can you get financing and that would be the down payment?

I'd never buy sight unseen in a market I don't know and if I'm not connected with people that have the right local knowledge. Of course, buying pre-construction, like many people do, is another matter.

@Mike Smith

Kudos to you for owning your mistake and not blaming others. The world needs more people like you! Yet, out of my experience and knowledge investing in Latin American countries, I'd be careful not to suggest that it's the Wild West, a free for all and that most professionals are crooks there and that investing there is scary (which I know isn't exactly what you wrote). The reality is that you could likely have avoided your trouble by being or having people from your team on the ground. Also, it's buyer beware for any investment anywhere in the world. Realtors and inspectors can and do lie in the US and Canada as well. Countries like Panama and the Dominican Republic have proper laws and regulations and they are abided by most of the time. However, there are certain things you have to be aware indeed. For example, realtors in the Dominican Republic aren't licensed so basically anybody can do that job so, in that respect, it's definitely buyer beware indeed. Out of my own experience and those of the people within my network though, the vast majority of professionals across the region are honest and decent (competency is another story) but, sadly, there are bad apples like everywhere else.

Mike Smith · Answer

A friend and I purchased a STR in Costa Rica. Mostly to use for income, but also to stay in twice a year. We have visited the area 5-6 times and had a good idea of the exact neighborhoods we wanted to buy in. We made a whirlwind tour and looked at about 10 properties over 3 days. Made an offer when we returned home and did not return for the inspection and correction process. In hindsight, that was a major mistake as the corrections were done very poorly.

In short, I would not recommend purchasing in a foreign country, especially if you not visited many times and won't be able to tour yourself prior to making an offer. Being from the United States, there are quite a few built in protections when purchasing real estate. I don't know how Panama and Dominican Republic work, but in Costa Rica, it's buyer beware and that's it. Sellers can lie to you, realtors can lie to you, and so can inspectors. It's up to you as a buyer (and your attorney) to catch any and all issues. It's a little scary.

Andrew Syrios · Answer

Pyongyang all day, every day.

Collin Hays · Answer

How about California?

just kidding. I couldn't resist.

Best Place to Buy Foreign Property?

Best Place to Buy Foreign Property?

Most Popular Reply

4 Replies