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Seeking advice on foreign real estate rentals

Benjamin Dupuis

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Apologies if there are already discussions on this topic, I searched but didn't find specifically what I'm looking for. If there is, feel free to guide me there.

I currently have 4 rental units in Calgary turning a small but respectable profit. I'd love to organize my life so that I can live abroad half of the year. Thing is, I'd like options, and I also am comfortable with real estate.

Ideally I would relocate for 5-7 months to a country with a good economic and rental outlook, buy a property, fix it up, etc. When the snow starts to melt and one of my units in Calgary comes available, I would switch the foreign home to VRBO/BNB/Long-term-rental and come back to calgary to occupy and update the vacant unit. The next year if I had the capital I would do the same thing but in a different location.

I don't know if this pipe dream is feasible but I believe it could work. Problem is, I don't know anyone who I can actually speak with about the steps of this process. It would be great to find a network of people who are doing something similar that have multiple foreign properties they are renting out. This way I can work with established agents, property managers, cleaners, etc.

I am single with no kids and intend on keeping it that way. I live a modest lifestyle where most of my disposable cash is already going to travel.

Locations I'm hoping for would be:
- Latin America (Colombia, Belize, Ecuador)
- Caribbean (Dominican Republic)
- SE Asia (Thailand, Vietnam)
- Europe (Portugal, Greece)

Feel free to burst my bubble or offer any helpful advice you might have.

Thanks in advance
 

Thomas Beyer

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Very doable with enough discipline AND enough local knowledge. Keep in mind each country has different laws and different languages so it takes quite a while to master them. Easy to get screwed as a newbie. Many places very shady and lawless, or tough to enforce laws. Even as simple as title system ie "who owns the place actually" or "can I get mortgage" or "who do I have to pay protection money to so it doesn't get vandalized."

Understand the written law AND the customs ie unwritten law. That takes a while to master in each country where even subtle regional differences can bite you big time.

Some countries welcome foreign investors and many have tough tax laws that can cause you jail time if overlooked.

To get a good price you must be a patient seller. To be a patient seller you must have good reserves and/or good cash-flow, ideally both. Selling a renovated house in Mexico or Thailand may take substantially more time than one in AZ or BC.

Subscribe to International Living magazine as they profile folks like you and highlight many countries you mention in more depth with online forums too.

Do you speak Greek, Vietnamese, Spanish or Thai ? Assuming not you will immediately pay far more to buy and for any trace you hire unless you develop deep local contacts as you compete with locals that often have relations that have been built over 2-3 generations.

Like any good baker, it takes a while of learning, experimenting, trial and error to get the bread or cake just perfect. Years usually. But certainly all doable.

Price differential between old junker and newly renovated one with own work plus legal, realtor and holding costs like utilities, interest and prop taxes often tiny tiny.
 
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CalvinTruong

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I came from Vietnam and I would not put my money to real estate there for the very reason that Thomas mentioned "unwritten rule" but at the same time there are lots of chinese buying there.
 

Alvaro Sanchez

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In my view unless you invest in bigger projects (20+units), a single/duplex property might not make sense given the overhead of learning country laws, taxes, management, maintenance, etc. With a small property, you might be lucky to able to cover cost but there will not be much gains in money or time. I would prefer to invest in Canada while getting premium rents (you already doing it) and then live out a few months a year, paying a lower rent somewhere else. That is, no commitment, no liabilities but with the flexibility of switching to another country and enjoying your free-time. So unless, you commit to a location/person then keep doing what you are doing there is no need to stress out about it.
 

Matt Crowley

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@Benjamin Dupuis yes, it is doable but not scaleable. It is not a system that is really going to grow as it is so labour-intensively driven. I've haven't seen anyone scale up the fix and flip program...those who want to make it a full time "business" seem to end up in the get rich quick circuit. Others look for internet attention, post videos, desperate for "likes" (not sure why). The successful people I know do one or two at a time, have a very lean team (no partners). You are basically a handyman with some capital, and the system works best if you use all of your own capital because the profits are very high risk and if you pay out the all the profits you never grow your capital base as much of the profit is essentially your wages.

Obviously the plan has appeal. And if you want to travel and work it is an interesting idea. International investing is fine but you want to avoid all debt whenever possible. Mexico has 12% estimated interest rates on debt for example.
 

Benjamin Dupuis

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Thank you so much everyone for all of your responses.

Most of your warnings come from the same things I am weary of, most notably the fact that I would have to learn the crazy ins and outs of each and every country. Which is why I'm trying to find a network of people doing something similar who I could maybe learn from and even leverage their already curated networks. Thats why I'm casting such a large net for locations, because its my hope to find someone or a group of people already investing in a particular location who might be able to introduce me to trustworthy local real estate agents, property managers, etc.

Also, maybe I misrepresented my intensions. With respect to buy/flip, that isn't really what I'm interested in. I'd actually like to keep each property even after I move away and hopefully rent it out as either short term vacation rental or long term local rental.

I will check out International living magazine as was suggested. Anyone else have any ideas where I might find Canadians investing in foreign real estate to be used as Airbnb, VRBO, or long term rentals?
 

Matt Crowley

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I would say this is not a great plan. Fix and flip in another country I could understand but this one-off VRBO, or AirBnb are very not enticing projects for any property management company to take on. If they just quit managing one day it is hard to find another company. Even N.A. cities are struggling to find PM that are willing to run these sort of units.

My second comment is burning cash. No one has an infinite supply of capital and you will not have a steady stream of capital until you have a good track record. And a good track record with investing is a very long tailed pursuit. You will be hard pressed to fix and refi out, get your wages, attract capital, and tell capital to hang in there for the long haul while you wait for a performance payday down the road... not a winning business plan. My point is that this plan is not going to enable you to build a track record. Once the supply of capital you have is placed, there is basically nothing more to do except hope that your PM follows through and the FX do not destroy all gains that you made. It is really difficult to make a good margin on single family homes, which is why fix and flip can work if you execute quickly.

You need a take out for your investors if you want to start an investing business, especially an extremely high risk one that you are proposing here.

A workable strategy would be to buy up derelict multi family projects, fix, stabilize, and exit. That I could see a market for... if you have a track record. Otherwise, it will be hard to convince investors you will get a 30% + IRR (which is where I would personally begin to get interested) when there are plentiful projects in North America from very experienced teams that have delivered 20% IRR.
 

Martin1968

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Would agree with what everyone else says. I would think investing in your local or nearby market would be the wisest decision. If you do wish to spend more time abroad for extended period it would be easier to find Property management for your local RE assets. And then go and enjoy your time away without spreading yourself thin.

There are plenty of listings abroad in country's you named. When purchasing resort condo's incl property management/rental pool opportunities, it's a highly competitive market, and any (possible) profits are usually eaten by HOA and PM cost. More often then not it will end up costing you money per month. SFH could pose an even greater risk of which some have been named in posts above.

Now, having said all that, you might find that property that's been neglected by someone that maybe had the same idea as you, ending up not being able to look after it, dump it and it could be your luck.
There are always opportunities so never say never. But in general..........
 

Rickson9

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All my “foreign” rentals are in the US so I’m of little help for advice in SE Asia, Europe and the Caribbean.

I’m sure that you could do it if you really wanted to.
 

Rehab Depot

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Of course, you could do it if you wanted. You have to ensure the individuals you work with are a reputable company and are trustworthy!

We provide services to individuals that have an interest in a guaranteed passive income from properties of purchase. We understand that owners do not want to manage the properties themselves, we will manage your property! We will assist you in finding great properties for long-term tenants and we also renovate the properties as needed to ensure your income stability! We are a complete turnkey system! This is in simpler terms but we stand out because we relieve the pressure of the owners and guarantee their monthly profit!

We are not located in any of your of place of interest but we are located in Jacksonville, FL
 

Allison P

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Thank you so much everyone for all of your responses.

Most of your warnings come from the same things I am weary of, most notably the fact that I would have to learn the crazy ins and outs of each and every country. Which is why I'm trying to find a network of people doing something similar who I could maybe learn from and even leverage their already curated networks. Thats why I'm casting such a large net for locations, because its my hope to find someone or a group of people already investing in a particular location who might be able to introduce me to trustworthy local real estate agents, property managers, etc.

Also, maybe I misrepresented my intensions. With respect to buy/flip, that isn't really what I'm interested in. I'd actually like to keep each property even after I move away and hopefully rent it out as either short term vacation rental or long term local rental.

I will check out International living magazine as was suggested. Anyone else have any ideas where I might find Canadians investing in foreign real estate to be used as Airbnb, VRBO, or long term rentals?

So here it is 2 years later... have you followed your Caribbean Dreams??

I am looking to purchase in high money tourist countries (ie. British Commonwealth countries like Turks and Caicos, Bermuda etc ) and do short term rentals there. I am Bermudian myself ((so I can buy there) and own land in TCI; BUT I am looking for investors and other like-minded people to expand my portfolio.

As rents in Turks run between $500 - $3000 PER NIGHT, I am sure this is financially do-able once up and running.

So, let me know if anyone has had any progress in their personal Belize :)
 

Thomas Beyer

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With a sufficiently large asset base in Calgary you can hire folks to run the show while you’re away. 4 is likely too small. Get bigger first, then go elsewhere.

Any market needs deep DEEP local understanding so what works in the Bahamas may not work in Belize or Costa Rica. Foreign locations especially have a lot of unwritten rules ie customs you have to understand ie where to go to, how to work with gov officials, regulators or police, ie who & how to grease (read bribe or pay off), how the law is interpreted, what works in theory but not in practice etc

So if there is a certain location you love, hang there and pretend you own and get lots of local intel before you actually buy something. Understand not only the real estate market, but also management thereof AND financing thereof incl taxation and bringing money in AND OUT. There are likely tax implications while holding property as a non-local, more tax implications after selling, exchange rate issues and capital transfer restrictions. Understand all those laws BEFORE your money goes in.

Go not only in prime tourist season but also off season and decide if you like the boredom, the many closed restaurants or attractions, the mosquitoes, the crime, the arbitrariness of law enforcement, the poor healthcare, the poor hygiene, the weather, the humidity, the hurricanes or the local language.

Belize is an overpriced dump in my opinion. Worse than Mexico but twice as expensive. But hey, they speak English plus a weekly flight from YYC now. Learn Spanish instead and thrive in almost all countries around it at a quarter to half price !!

Loads of cheap European locations, too, and as part of the more regulated EU, for example Madeira, Greece, Portugal, Canary Islands, Croatia, MonteNegro, Spain, Romania etc

How’s your Spanish btw ? If not good to very good then start there.

Vamos a la playa !! Bien viaje !!
 
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Saurabh9204

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Great advice Tomas . Thanks as always for your expert & honest comments.


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Colin Forrest

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From someone that has owned property in Thailand (because we lived there), I’ll add a couple more things to consider. There’s been so much good advice that if you’re not scared off by now then you might be after I’m done with you. when you invest in a country outside of Canada you are entering a much different world. Especially, if you are considering a second or third world country. Once you start iinvesting in places like Thailand, Vietnam and the like, your money is locked tighter than Fort Knox. The secondhand market in many of these countries is immature at best and illiquid at worst. When you want to sell, you have to be prepared for a very difficult and long process. Besides the legal implications of selling, which are many, taking your money out of many of these countries is challenging and expensive. If you plan on remaining a resident of Canada then you will have to declare the income that you make from these properties. Another consideration you’ll have to give is the exchange rate. This can make or break your profitability. All this said, I’m not saying you shouldn’t do this, but like the many good people on this forum we just want you to go in with your eyes wide open. Oh and yes, while you might see yourself single forever...


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XavierCP

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Locations I'm hoping for would be:
- Latin America (Colombia, Belize, Ecuador)
- Caribbean (Dominican Republic)
- SE Asia (Thailand, Vietnam)
- Europe (Portugal, Greece)

Benjamin it's a really great project but you will face many challenges. I am a French Canadian expatriate in Bali, Indonesia for the last 5 years and I am planning to go back in Québec to invest in real estate. :p

Like ThomasBeyer explained it, investing in a different country especially a developing country it's a whole different game. Here in Indonesia, foreigners cannot own a land or property, they must find an Indonesian nominee to put their names on the contract and with a special document made by the notary, foreigners can somehow claim their ownerships but in front of Justice it's not guarantee.

It's all about trust but unfortunately there's a lot of scams. I have been scamed more than once and in general if you don't have the contacts/network you'll have to pay extra money for every legal documents.

I am in love with the island of Bali, the beaches, the perfect weather every day, the food, the language etc.
but for business, they have lower standards compared with Canada. If you don't speak the local language you will always have issues with all levels of doing business transactions.

Just for instance, they don't have employees speaking English at the official tax office in Denpasar (the capital of Bali) so you cannot take care of your own tax, you don't have choice to hire a firm to fill up your tax, same for your VISA, and all other legal matters. It's important also to know that the professionals Indonesians who speak English are normally the best and work for big companies and are very expensive. The exception is for the Global Power Elite, the very rich investors/corporations who are willing to invest few millions USD in Indonesia, these people won't have issues for the registration of their business, the tax etc. because they will have the best Indonesians taking care of their investments.

I could share a lot of experiences about living in Bali, Indonesia and doing business as I started to registered a Real Estate Agency in Bali with my Indonesian partner (in life and in business) but long story short, in every aspects of doing business it's really really different compared to Canada. This is why I decided lately to return in Canada to invest in Real Estate hehe. When you truly think about it, investing in real estate is a privilege, as a foreigner I was not able to do it in Bali.

Good luck and let me know if you have any questions.
P.S. Thailand will be quite the same challenge compared to Indonesia, I have Canadian friends living there and they rent a villa in Bangkok but have decided to invest in Real Estate in Canada.
 
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