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Seeking advice on foreign real estate rentals

Discussion in 'Real Estate Discussion' started by Benjamin Dupuis, Oct 11, 2017 at 3:26 PM.

  1. Benjamin Dupuis
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    Benjamin Dupuis New Member Registered

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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
     
  2. ThomasBeyer
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    ThomasBeyer Well-Known Member REIN Member

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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.
     
    Last edited: Oct 12, 2017 at 8:21 AM
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  3. CalvinTruong
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    CalvinTruong Member Registered

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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.
     
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  4. Alvaro Sanchez
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    Alvaro Sanchez Ottawa-Gatineau Investor REIN Member

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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.
     
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  5. Matt Crowley
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    Matt Crowley Active Member Registered

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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.
     
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  6. Benjamin Dupuis
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    Benjamin Dupuis New Member Registered

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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?
     
  7. Matt Crowley
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    Matt Crowley Active Member Registered

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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.
     
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  8. Martin1968
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    Martin1968 Member Registered

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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..........
     
  9. Rickson9
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    Rickson9 Well-Known Member Registered

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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.
     

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