Looking to invest in property overseas? Based on significant financial indicators, including gross rental yields, monthly rent, and rental tax rates, we present an overview of the best places in the world in which to invest in property.
Singapore has the 4th highest per-capita GDP in the world and is quickly transitioning to become one of the world’s most prominent financial centers. Investors who are seeking to buy property in this island nation will need to have a robust bank balance because property is extremely expensive. However, in light of the fact that Singapore has earned a reputation for being a safe investment prospect, there is a strong likelihood that the financial strength of Singapore will go from strength to strength and it will withstand any financial shocks that impact other areas of the world.
With an average rent of $4,379, France has an effective rental income of 10% and a yield of 2.79%. The high rents in France, which were the highest of the properties assessed for this study, mean that it is one of the best places in the world in which to own property, despite the low yield. Furthermore, those who invest in properties in France will benefit from a lower rental income tax in this country than they would in areas such as Ireland and Spain.
Although the cost of living in the Philippines is relatively low, rental yields in the country maintain a steady rate of around 6.13 percent. Furthermore, the effective rental income tax rate in the Philippines is one of the lowest in the world, meaning that this country ranks the highest in terms of overseas investment potential.
Portugal is one of the few countries in the world in which non-residents can secure a local mortgage. However, investors will need to do their homework to identify the best areas in which to buy a property. Property in some areas—for example, regions of Lisbon—have risen to levels that no longer represent a sound investment. However, other areas continue to offer a solid return and strong future potential, especially for buyers who are prepared to invest in renovations. In 2019, the Algarve and the Porto region, north of Lisbon, represent strong investment choices.
Based on per capita income, Panama is the most affluent country in Latin America and is set to maintain this status due to its strategic location. Due to its affluence, Panama is undoubtedly one of the best places in which to invest in property, and this is further boosted due to its agricultural opportunities and a strong rental market. Panama City, which has exhibited a decline in resale transactions in recent years, is set to be a strong buyer’s market in the year ahead.
10. Costa Rica
Costa Rica is a politically stable country that benefits from a safe living environment and a government that is actively encouraging investment from overseas. While it is not as wealthy as Panama, this entails that the cost of living is lower and, as such, it attracts a large number of expats and retirees from the United States who are seeking a low cost of living in a pleasant climate. A further draw is that investors can purchase property in Costa Rica without being a resident and will be afforded the same constitutional rights as local citizens.
Brazil is another very interesting market. The Fortaleza area, in particular, is an attractive investment potential due to its popularity with Brazilian tourists. Rental properties in this coastal area consistently earn an excess of 8% yield. Investors will find the beachfront areas particularly lucrative due to the availability of lots at cut-price rates. A further draw is that the Brazilian real continues to remain stable against the U.S. dollar at a relatively weak rate. As such, the combination of high yields and a weak currency mean that Brazil will remain a promising prospect beyond 2019.
8. United Arab Emirates
With an average rent of $3,070, the UAE has an effective rental income of 5% and a yield of 5.19%. As such, it represents an attractive investment proposition. The low rent to income ratio in combination with low-income taxes entails that residents of the UAE have cash available to rent properties and this helps to increase investors’ yields.
Although the economic strength of Spain has declined significantly since the Global Recession, it still represents an attractive investment destination. For example, it is home to some of the most attractive beachfront locations in Europe and has a strong tourist market. Most appealing of all, many of the properties that were once priced at the high end of the market are going for a song, meaning that the return on investment will ultimately be high.
Australia is another vast country in which investors can benefit from access to a wealth of property types, from low-price rural areas to luxury properties in city locations. However, while beach-side living undoubtedly has its merits, there are some downsides to investing in property in Australia. Given its remote location, investors will not be able to readily travel back and forth to Australia. Also, the seasons are the exact oppostie of those in the United States, which can take time to get used to.
If you have strong Spanish-speaking skills, Mexico can be the ideal place in which to invest in property. One of the biggest advantages of investing in Mexico is that non-residents are permitted to buy property. However, to do so, you will need to use a mechanism known as a fideicomiso, which is a form of real estate trust through which overseas buyers can buy property that is located near beaches or the Mexican border. The price of real estate in Mexico can vary significantly. In some regions, the price of property is comparable to that on offer in the United States. However, in other areas, you can secure property for a very low price.
With an average rent of $2,029, Thailand has an effective rental income of 2.73% and a yield of 5.13%-8% (depending on location). As such, it represents an attractive investment proposition. Combine the strong yields with the low rental tax rate and relatively high rental values, and Thailand becomes particularly attractive to investors.
Turkey is currently benefiting from strong growth in terms of both economy and tourism and an increase in the middle-class population. Investors have a range of markets to choose from including tourism rentals and student rentals. What’s more, the cost of entry in Istanbul is very low. As such, it represents an investment prospect for investors of all levels.
Uruguay is open to investment from overseas; in fact, it bestows foreigners with comparable rights to its local citizens. Foreigners do not encounter any type of restriction in terms of land ownership and are not weighed down by any currency restrictions or exchange controls. A further draw of Uruguay is that it represents a relatively safe haven in the event of global economic issues. Due to the country’s reliance on agriculture, you have the option of purchasing agricultural land and subsequently riding it out while the global economy recovers.
While real estate in Canada is far from cheap, some bargains can be found if you do your research. The pure scale of Canada means that there are opportunities abound to invest in previously untapped markets. A further advantage of Canada as investment potential for overseas buyers is that it is well-developed, safe, and politically stable. Furthermore, US residents who are seeking an opportunity to relocate to Canada will find their academic qualifications and business skills are readily transferable to this area of the world.