All Forum Posts by: Mike Lambert

@Account Closed

Great reply! Like you, I'm a European living in North America so I can compare the two systems.

I invest internationally and, in Europe, I've been focusing on residential properties in several Southern European countries, which I'm most familiar with. I know that people residing outside of the EU can borrow up to 70% of the value of the property in Portugal and Spain and up to 50% in Greece. Banks in Portugal are particularly keen for foreigners to borrow. Do you know what the situations is in other European countries regarding mortgages for residing out of the EU? Thanks

Eduardo I invest internationally but your question is very vague.

Why invest internationally? First it's diversification, plain and simple. Second, the unleveraged returns and potential capital gains are often much higher than in the US. Yes oftentimes you can't get the leverage that you get in the US. But it looks more an more that the US is in the middle of a huge housing bubble and the economic cycle in the US might be about to turn (look no further than what the stock market is telling you). I'm not so sure it's a great idea to have all your real estate in the US bought with borrowed money in such as situation.

This being said, if you invest internationally, you need to know how to do it or someone who knows. And having contacts on the ground is a must.

Colombia is on my radar. It's a great country emerging from years of civil war and with a fast tourism industry. In Latin America, I'm concentrating on Mexico at the moment because it's even more profitable.

Rodrigo, most of what people do here (in the US) is based on the availability of cheap debt so, being in Mexico, you are at a disadvantage. On the other hand, properties in Mexico are much cheaper, whereby unlevered returns in short term rentals are much higher than in the US. Moreover, short term rentals in Mexico is often unrestricted while it is often illegal or very restricted in the most profitable places in the US.

So maybe you could sell one or both properties in Monterrey and use the money to purchase short term rentals in places like the Riviera Maya (Tulum, Playa del Carmen). Not only you would get a great cash on cash return, you would also enjoy nice capital gains. I’m investing there and I can tell you the area is bopming and has one of the fastest growth rate in the world, way above the US and other parts of Mexico.

@Eric Telese

Yes they are always part of something bigger. Not a resort or an all inclusive resort I'd never want that! They are part of a condominium complex where renters have access to all amenities: typically one or several pools, a gym and yoga room, a spa and steam room, a kid's club, one or several bars, underground parking and a private outdoor area for residents. Where I bought so far, there will be upscale shops, cafés and restaurants. It's basically in the best possible location.

I just saw your message. Yes, I work with investors and will reply to you shortly, explaining what I do.

@Gil Pang

Yes international real estate investing has its own risks but they can be properly mitigated and the rewards could much more than compensate for the risk if you know what you’re doing. It’ll be a pleasure to respond to your questions. International real estate investing is my passion so I can talk about it for hours!

@Eric Telese

We got hit by the same snowstorm way too early and I can’t wait to go back to Playa del Carmen next month to see how the construction of several properties that I bought there is going. Your plan sounds great. Not only Playa del Carmen is a great place to spend time it’s also the hottest market for short term rentals that I know. Feel free to contact me if you think I could help you make your dream a reality.

@Eric Wilson

Great (similar) idea. Hopefully you can find a place where the figures make sense. I think Kelowna is quite expensive!

@Jim Goebel

In any country (including the US), everybody is supposed to be equal under the law. This means that you shouldn't take any different steps than you'd do at home to protect your assets but you'd have to adapt that according to the local law. This is different from the fact that the law itself could be different for citizens and non-citizens in certain countries. For example, Thailand doesn't allow foreigners to own any land (they can buy condos, with the exception of the ground floor ones).

While foreigners are equal under the law, it is possible that, in certain developing countries, a judge would favor a fellow citizen over a foreigner when rendering a judgement. This is why it's a great idea to know what you're doing and with whom you're doing it when investing overseas.

@Gil Pang I have started an international real estate investing business. I'm currently active in LATAM and Europe but will be covering Asia as well if I find interesting opportunities there through my network. Financing is difficult but not always impossible.

I'm passionate about what I'm doing so I'd be happy to speak with you. Feel free to send me a private message to arrange that.

@Jim Goebel You can buy real estate in USD in dollarized economies: Panama, Ecuador and Argentina. You can also buy real estate in USD in Mexico. I'm buying in Mexico and have been looking at Panama but wouldn't invest in Ecuador or Argentina.

@Roy N.

The trust is not necessarily a trust as we know it. The only purpose of its existence is to allow Canadians to own property in the "forbidden zone" in a legal way. It doesn't affect the economics in any way. Like you rightly said, the Canadian owner will receive the income from the property. He/she will be able to deduct all the property expenses incurred in order to earn that income, which includes all the operational expenses and even the fideicomiso yearly fees. It's the owner who was to pay all expenses like electricity and HOA. The bank is not gonna pay that out of their own pockets.

I've been investing in property in Mexico but be mindful that I'm not a tax advisor so you should check what I'm writing before acting on it.

As far as I know, it doesn't matter to CRA where the property is located when determining how it is taxed. So you would treat the income as if the property was in Canada. The difference would be that you will already have been taxed in Mexico. According to the tax treaty between Canada and Mexico, you should be able to claim the taxes you paid in Mexico against your taxes due in Canada.

@Roy N. The fact that the property is held through a Fideicomiso doesn't change anything to the fact that you are the owner of the property for all intents and purposes. You therefore are liable for the taxes.