International Investment Properties

[Jonathan Buie]

Hello Bigger Pockets Community!

I looking to connect with other investors that have successfully invested in international investment properties.  I'm targeting a city like Cartegena in Colombia which thrives on tourism and renting out Airbnbs.  After returning from my most recent trip I made connections with folks who are property managers but would like to get the perspective of others who have attempted things like this.  Are there any folks that can share some tips on getting started and potential "gotchas" to consider at this time?

All the best, 

Jonathan

[Mike Lambert]

@Jonathan Buie

I'm not sure if you bought anything but Johann brought some good points like you need to know what you're doing (or know people who do). There's also the potential political risk (from which the US isn't immune btw) and I imagine she's alluding to the recent election of leftist president Petro and the fears surrounding that. It could explain an increase of Colombians investing abroad but make no mistake Colombians have been investing in Florida, Mexico and Panama for a long time and way more than in the Dominican Republic. They've been doing this to diversify and hedge against a weak peso and, yes, they might have done more of that following the election of Petro. In peso terms though, Colombian real estate have done very well over the last few years.

Your situation is different and, for you, the question is more whether Petro is going to wreck the tourism industry in Colombia and Cartagena, which has been undergoing a boom in recent years. Or you might fear that your property would get confiscated. While I don't have a crystal bowl, it won't, if history is any guide.

Indeed, we have a similar situation that played out in 2018 when Mexico elected its most leftist president ever. So many predicted doom and gloom for the economy, the end of foreign investment, the nationalization of foreign property,... I believed none of it, continued to invest there and have a smile on our face today.

Indeed, fast forward to 2023, AMLO's last year as president and this is what we have:

1. An economy that's growing fast, much faster than the US.

2. A historic low unemployment rate, one of the lowest in the world and even significantly lower than that of the US.

3. Record foreign investment, as the government has actually been very friendly to foreign investment, including an upcoming Gigafactory from Tesla.

4. Much higher property prices (but still low by international standards), up 12% over the last 12 months when they've been dropping in many other countries.

Now, Colombia is different Mexico but I'm just suggesting to not draw conclusions too hastily.

Is the Dominican Republic a better investment destination than Colombia. Clearly, the DR has been following intelligence policies and investment strategies for decades (which they copied from Mexico) and it has served the country and its real estate industry well. I almost invested there until I realized that sargassum might end top wrecking its tourism industry and economy, a risk I wasn't willing to take. Mind you, the Caribbean coast of Mexico has the same issue, as the Caribbean and Florida. Cartagena could be exposed too, given it's on the Caribbean coast of Colombia. It might not have been hit yet but that's no guarantee, as the problem is getting worse with no solution in sight.

Hope this helps you make sense of it all.