Latin American countries to invest in short term rental?

[Rick Dane]

I've traveled a decent amount in Latin America and am starting to look into potentially investing in a short term rental in the region. I'm curious if anyone has suggestions for countries that may be a good fit, I haven't really looked into this before while traveling, although I've stayed in a lot of short term rentals while traveling in the region and I think I would like to try getting one that is fairly inexpensive, so I'm not looking for luxury type of real estate.

Basically what I'm looking for are the countries that would be the easiest to get started in, I'm not fluent in Spanish but I have basic proficiency and I'm comfortable enough I think with the cultures in the countries I've been to where I'm able to see myself doing this but I have never dealt with anything like this before in terms of investing in a country so I'm a little lost as to how to evaluate one country against another.

I've narrowed it down to Mexico, Central America, Caribbean or Colombia. I have this perception I guess I would say that Panama may be one of the most friendly toward foreign investors so I'm going to look into that more but was wondering if anyone has other suggestions.

[Mike Lambert]

Panama isn't the ideal place for short-term rentals (STRs) in that region. It would work out in Panama City but it's not legal to rent under 45 days there and there is an oversupply of properties there. STRs are allowed in the rest of the country, including in beach towns. However, Panama City's beach towns don't attract many tourists to make an STR investment profitable.

Mexico has cheap properties and a huge and increasing amount of visitors, snowbirds, foreign retirees, digital nomads and work from homers. The government is investing massively in infrastructure and marketing to bring in more tourists. There are not restrictions on STRs and there's unlikely to be anytime soon. The location next to the US is ideal.

The Dominican Republic (DR) is similar to Mexico but it's much smaller and doesn't have the amount of money than Mexico has. Also, it's further than Mexico from many parts of the US. There are great opportunities there but clearly less than in Mexico. It's very foreign investor friendly and a great alternative for those who don't like Mexico.

The properties you'd buy in Mexico or the DR are traded in USD so your exposure to the local currency will be limited, which you can see as an advantage or a disadvantage.

Colombia has transformed in recent times to become a tourism powerhouse and a favorite for digital nomads. Properties are cheap there too, especially after the devaluation of the peso against the USD in recent times. Speaking about the peso fluctuations, you can see it as a negative because you might be concerned about the peso getting even cheaper or as a positive because the peso is at a historic low and you might therefore think there's more upside than downside potential. Beware that there are some STR regulations in Medellin, one of the most popular cities and they are enforced; there are ways to go around them.

As a pure investor, I'd forget the other countries in the region you mentioned. There are other countries in Latin America that are great but not in the sub-region you mentioned, like Brazil and Uruguay.