Where to invest outside the US?

[Mateo Monsalve]

What other interesting options do you find outside the US? Brazil? Thailand? Colombia?

[Bruce Lynn]

Thailand returns are horrible.  From what I see there is also very little appreciation.  Plenty of land to build more condos.  They all tend to look alike and as soon as one sells out, they build another one next door or down the street.  While lots of people think they have ways around the law, the law is clear that foreigners can only own condos in certain allotments...I think 49% of the building.  People have all kinds of proposed work arounds, but that's good until it is time to sell or the government decides to crack down and they do now and then.  Baht is going to take a beating the next couple of years too I expect.

Maybe Japan. Some places have pretty cheap housing and maybe even free housing in smaller or more rural cities. This is called Akiya. Probably not easy for long distance. Language not easy for anything and perhaps Japanese have some distrust or uneasiness working with foreigners. However maybe that changes slowly over time. Very few people are geared up to transact in English or Spanish I would expect. Not sure how currency affects the investment though....something like 50% devaluation of the Yen over the last year or two. So you have to think about currency risk. Seems like there is still pressure on the Yen. Just investment for 2 years with no ROI or appreciation and you would have lost 1/3 of your money just on currency exchange. I used to work for Japanese company and have know many friends who lived in Japan and spoke great Japanese and it seemed like about every 3 months they would have some kind of really mind altering experience culturally that was disturbing, so probably not an easy place to live or invest, even if the opportunity is there.

Argentina I think prices/trades their real estate in $, so less currency risk. Not sure about ROI there. Maybe some chance, but economy does not seem to be kind. I would guess rents are low compared to sales prices, because every local is probably parking their cash in real estate if they have cash, before it is worth nothing.

Also many countries have no leverage or no leverage for foreigners, so cash only game. That can hurt ROI as well.

Mexican Peso has gained about 10% this year against $ so maybe there is opportunity there.

How is ROI in Colombia, especially in the big 3 cities? Seems like stable economy, Seems like COP has also gained about 10% on USD, so maybe that is as good of a place as any?

Government in Brazil pretty tough right now, so I would not expect great ROI during this reign and seems anti-capitalist and anti-foreigner. I was just there and surprised to meet many Colombians and other South Americans working there. I can't imagine the jobs/work opportunities are better in Brazil than in Colombia, but what do I know?

[John Mason]

Costa Rica Panama Belize maybe

[Mike Lambert]

@Mateo Monsalve

This is a difficult question to answer because we don't know what your objectives are. So, the best I can do is tell you where I find interesting options that fit with my objectives. I'm an investor and I'm looking for the best possible risk-adjusted returns so you and other readers might have the same objectives.

I'm only interested in STRs for maximum profitability and because the other strategies generally aren't worth it. So I'm looking for the combination of affordable properties (cheap could be misinterpreted) and (mass) tourism. Thankfully, and it's no coïncidence, the places where I end up investing are great for lifestyle.

My pricing criteria eliminates Canada, Northern Europe and Oceania.

My tourism criteria eliminates Africa.

I eliminate Asia, including and up to the Middle East because, in most countries, foreign owners are treated second-class and that has serious implications from a risk point of view. As mentioned by @Bruce Lynn, Thailand is a great example. It'a cheap for a reason (although a lot of the stuff promoted to foreign investors looks cheap but is in fact expensive). Japan is an exception but, aside from exceptional cases, it's the last place where I'd invest since, unlike in the rest of the world, properties depreciate over time until they get destroyed.

I eliminate the Caribbean because of the sargassum.

What do I have left over? The two areas where I invest, unsurprisingly.

1. Latin America

There are several countries that would work but Mexico beats all of them hands down. Tourism, remote workers, digital nomads, snowbirds, retirees, near shoring induced economic boom, growing middle class, massive population (growth) and geographical location. No other country in the region can compete. There's no contest, although some other countries could work as well in specific niches. This is why a lot, if not most of my 1,250+ post replies in the forum to date are about Mexico, as many investors seem to agree. Beware of the Caribbean side though (see above).

2. Southern Europe

Southern Europe is what Mexico is to Northern Europeans, with the nuance that Southern Europe is full-fledged developed so it's mora a mix between Florida and Mexico with a weather more akin to California. Again, you can't beat the location inside the huge European market.

Of course, that's what's available to you but you need to either know what you're doing or have access to the necessary people and resources, in case that isn't obvious.

Hope this helps!

[Andrew Syrios]

If I was investing abroad, the first thing I would look for is strong property rights. In some countries, property rights are poorly enforced or even arbitrary. This really hurts the local population as it's derails any sort of capital formation. But it also puts your investment at risk. I haven't done any research but I might be interested in El Salvador given how well they've been able to get the crime situation under control over the last few years. 

[Dustin Lauer]

@Mateo Monsalve

Our company opened a subsidiary in Puerto Rico to finance investment properties back in 2019 approximately. Now yields are high enough in the US for us so after our last loans payoff there we are planning to dissolve. If rates drop in the US we may revisit lending in PR again. My suggestion is to partner with / hire the best local tax and legal professionals you can if you are going to invest abroad.

[Mike Lambert]

@Andrew Syrios you brought a great point, which I only briefly touched on in my reply as the explanation for which I'd have issues investing in Asia. So thank you for mentioning it and sharing your thoughts.

Strong property rights are indeed essential but they're wishful thinking if you can't have a profitable investment in the first place and I'm not sure how you could get any decent return by investing in El Salvador.

I've heard great things about how the new president has tackled crime. Does that mean that property rights are safeguarded and that foreign investors are treated equally? While there could be a connection, I'm not so sure that there is one.

In any case, it could be worth investigating. It'd be interesting to follow your journey if you decide to invest there!

[Andrew Syrios]

Quote from @Mike Lambert:

@Andrew Syrios you brought a great point, which I only briefly touched on in my reply as the explanation for which I'd have issues investing in Asia. So thank you for mentioning it and sharing your thoughts.

Strong property rights are indeed essential but they're wishful thinking if you can't have a profitable investment in the first place and I'm not sure how you could get any decent return by investing in El Salvador.

I've heard great things about how the new president has tackled crime. Does that mean that property rights are safeguarded and that foreign investors are treated equally? While there could be a connection, I'm not so sure that there is one.

In any case, it could be worth investigating. It'd be interesting to follow your journey if you decide to invest there!

I'm not sure how well Bukele has done with property rights although he's really into Bitcoin so I think he at least supports property rights in principle. I'm not saying to invest in El Salvador (I haven't researched it enough) but I think property rights need to be protected in two ways; from arbitrary government abuse, but also from rampant criminality. 

High levels of crime make de jure property rights irrelevant and destroy property values. Getting crime under control is a necessary although insufficient condition for strong property rights. Whether or not the other conditions are available in El Salvador, I unfortunately cannot say for sure. 

[Mike Lambert]

@Andrew Syrios

Regarding government abuse, I'd look first at whether the law discriminates against foreign investors and then how the law has been applied over a significant period of time, not necessarily just because the head of state changed recently.

Regarding crime, isn't it the same as in the US. Also, beware about national statistics. For example, the murder rate in Bogota, Colombia's metropolis, is lower than that of Indianapolis. Similarly, the murder rate in large parts of Mexico is lower than that of my home country Canada, which itself is significantly lower than in the US. Who'd have thought that?

I guess it always comes to doing our homework, doesn't it?

[Andrew Syrios]

Quote from @Mike Lambert:

@Andrew Syrios

Regarding government abuse, I'd look first at whether the law discriminates against foreign investors and then how the law has been applied over a significant period of time, not necessarily just because the head of state changed recently.

Regarding crime, isn't it the same as in the US. Also, beware about national statistics. For example, the murder rate in Bogota, Colombia's metropolis, is lower than that of Indianapolis. Similarly, the murder rate in large parts of Mexico is lower than that of my home country Canada, which itself is significantly lower than in the US. Who'd have thought that?

I guess it always comes to doing our homework, doesn't it?

Agreed on crime, national statistics can be misleading (although I doubt so for El Salvador given how small the country is). Regarding how countries treat foreign investors I would say there are two points, 1) yes they need to not be too arduous on foreign investors, but what's more important is 2) that they are consistent and predictable instead of arbitrary. 

[Anne-Michelle Wand]

Quote from @Mateo Monsalve:

What other interesting options do you find outside the US? Brazil? Thailand? Colombia?

After traveling and investigating multiple countries in Central America , I decided to invest in Panama. They are still one of the top recommendations in Live and Invest Overseas yearly poll. The government is a democracy, they use the US dollar, have 6 easy residency options. low cost of living, low inflation comparatively,wonderful weather, city, mountain and beach opportunities. That being said in any market you will want to do your homework and make good connections.  Having a good attorney is imperative.  
I have a cousin who is living in Medellin for many years  and he recently moved many of his assets to Panama. And I hear Medellin is booming. My colleague recently opened a real estate office there.