Real estate is a challenging field because of the ever-changing oil prices and stock markets. Therefore, you should investigate countries that will get you high rental yields.
It is essential to invest in a property that will generate cash flows. Investing in other countries requires you to navigate financial systems efficiently, as the real estate transactions and financial procedures in other countries work differently compared to those in your country.
10 Best Countries to Invest in Real Estate
We have the criteria of high rental yields and easy financial systems for selecting the right property. According to these criteria, we specified the 10 best countries to invest in. These are Turkey, Uruguay, Panama, Thailand, the Dominican Republic, Mexico, Malaysia, Canada, Portugal, and Australia.
Why Should You Invest in Other Countries?
Investing only in the domestic market can be risky because of the falls. When you have securities in local areas and overseas, your gains fluctuate more since the two markets will not rise and fall at the same time. This will reduce the risk rather than increase it.
If you want to know about how to invest in Turkey, check out our blog post.
What Are the Advantages of Investing in Real Estate?
Real estate investment requires a great amount of money to start. Then, you need to afford maintenance costs for the property. However, if you clear these steps, real estate investment is one of the best kinds of investment since it creates an ongoing passive income and maybe a huge profit because properties may gain value over time. Besides, shelter is still one of the basic human needs to survive. Thus there is always a demand for it. Hence, this market shows no clue of dying out within the next decades.
It is recommended that you should invest in real estate overseas. This will generate broader market exposure with investment opportunities and higher profits due to the benefits and different market policies of other countries. Your portfolio will not be dependent on only one market. That will lower the risk of loss-making. Moreover, if the currency in your home country loses its value, you will be in a better place than most since you have solid investments overseas.
Cash Flow for Real Estate Investments
General income from real estate investment after mortgage and operating expenses are mostly the second source of income for foreign investors. A real estate investment can provide you with a 6% and greater cash flow.
Tax Breaks and Deductions
Investors can save money at tax time by taking advantage of numerous tax breaks and deductions. The cost of buying and improving an investment property is depreciated over its life. For residential properties, it is 27.5 years, and for commercial properties, 39 years. Your taxed income is lowered by decades of deductions.
Real estate values increase over time, and by making suitable investments, you can gain profit when you decide to sell the property. Rents also increase every year, leading to more cash flow.
Real Estate Leverage
The borrowed capital can be used to increase the investment return; leverage occurs when the mortgage is used to reduce the amount of investor capital required for property purchases.
Once you build an equity position in an investment property, you can leverage this investment to cash in two ways. First, secure a second loan against the increased equity or refinance the original loan amount plus the raised equity, which frees up money to invest in other property.
In Which Countries Should You Invest in Real Estate?
Here's a list of the top 10 countries for real estate investment with high capital appreciation opportunities.
Turkey connects two continents, Asia and Europe, through the Bosphorus Strait. Turkey attracts foreign real estate investors with its strong economy and various real estate options. Turkey has become one of the most desirable countries for real estate investment by foreigners, thanks to the new law of getting Turkish citizenship by real estate investment.
Real Estate Investments in the Republic of Turkey
In 2012, the government made investing easier for foreigners in Turkish properties. Since then, there has been an increase in buying real estate properties in the top tourist destinations to capitalize on the tourist and property market boom.
Unlike most of Europe, property prices in Turkey are increasing every year. It used to rise approximately by 14.9%. From May 2021 to May 2022, it escalated by 42% as dollar-based. That is to say that the real estate market is the safest market to invest in for the long-term future.
The Republic of Turkey is an unmissable option among countries for real estate investment, with an almost guaranteed appreciation of property prices, never-ending demand in the sector, and affordability for foreign investors.
By 2021, thirty million foreigners had invested in holiday homes in Turkey. Turkish Statistical Institute's data states that 7,841 houses were sold to foreigners in December 2021, showing a 77.1% increase to December 2020. Foreign investors worldwide are coming to Turkey to loan in buy-to-let homes with high rental incomes and high capital growth potential because of the boom in finance and tourism.
According to the Central Bank, it is easy to see why investors are interested in Turkey. Its economy is in second place for its influence, following China.
The country is profitable for investors who purchase high-end property in Turkey and buy-to-lets in Kalkan, Bodrum, Fethiye, and Antalya, providing 6% per annum in the peak rental periods.
In 2022, house prices in Istanbul rose by 209.46%. In January 2022, 88.306 houses were sold in Turkey. This is 25.1% more than the number of houses sold in the previous January. The devaluation of currency makes the property market attractive for foreigners.
Turkish law and the rental market favor its tenants. Rent can be decided at the beginning of the contract, and there are no other forms of rent control in Turkey. Tenants can specify any duration they wish. And it is automatically extended for another year unless the tenant informs the landlord 15 days before that they want to leave.
They are welcoming foreign investment in Uruguay. There is no restriction for foreigners on owning lands. They have the same procedure for foreigners and citizens.
Uruguay is located in South America between Brazil and Argentina; It is a peaceful environment that is not affected by military conflicts. Since it is a small country that can survive by itself, the global economic meltdown does not strike them.
Panama has a location with great significance. It has coasts near the Caribbean Sea and the Pacific Ocean, not to mention the Panama Canal. It also connects the USA and South America, as well as joining the two continents. This location makes Panama the richest country in Latin America.
For the real estate sector, Panama is a secure country. Even the global meltdown did not create a big issue for Panama.
Thailand has expanding tourism thanks to its temples, rivers, islands, and diverse ethnicities with peaceful traditions. So it is not a bad idea to invest in Thailand.
Thailand’s average monthly rent is $2,029 with a 5.13% rental yield. Investments in the condominium market are suggested because condominiums are easier to keep track of and provide the most profit.
5. The Dominican Republic
The Dominican Republic has one of the fastest economies thanks to its construction, manufacturing, and tourism activities. It has an extremely low inflation rate.
The tourism market is rising even after the Pandemic. Investing in it will not let you down. Both business travelers and holiday-goers are good choices to invest in. If you want to play your cards right, you should go for pre-construction for businesspeople. They tend to stay in apartments over hotels.
Both Canadians and Americans like to stay in Mexico for their holidays and retirement, making Mexico a great country to invest in.
Puerto Vallarta on the Pacific coast and Playa del Carmen on the Riviera Maya are excellent choices for property rental investment since they are the top locations preferred for tourism. Mexico also has offers for investors with no Mexican residency.
Malaysia is a good place both to live and invest in. English is widely spoken, the cost of living is low, and banks operate by Western traditions. These make life easier for foreigners.
Malaysia has a tropical climate and beaches on its two coasts. These make Malaysia a good place for holiday travelers and a great spot for investing. Also, if you are looking for an Asian destination, the affordability of properties makes Malaysia a good choice compared to many countries for real estate investment.
Canada attracts investors as one of the largest economies in the world. Its high-quality living standards make it one of the ideal countries for investments.
Canada is a global commerce hub. The aviation transport system is world-class, and coastline ports provide direct maritime access to Asia, Europe, and South America. The Great Lakes also offers easy access to the United States.
Portugal has been gaining significance in the property market for 8 years now. Properties in popular locations such as some neighborhoods in Lisbon are overpriced for investing in. We suggest the investors look for opportunities in other areas of this city like the Porto region in the north of Lisbon. We can also recommend Algarve Coast in Portugal since these areas are to gain importance in the property market.
Portugal offers mortgages to non-residents, so it is easier for foreigners to invest.
Foreign investors are interested in investing in Australia because of its vibrant economy and well-developed living standards.
They are well-rated for offering one of the highest rates of prosperity to the residents. Wildlife areas and other tourist options are also some of the reasons that attract investors. Australia has various property options, from high-end to affordable.
Frequently Asked Questions
1. Why is real estate important in the economy?
The strength of the real estate sector has a significant impact on consumer sentiment, and housing, and has socioeconomic ramifications.
2. Which country is best for real estate investment?
Turkey, the USA, Canada, Australia, Germany, and Morocco are among the best options for real estate investments.
3. What should I invest in?
The real estate market is one of the best options to invest in with high-value incomes.
4. Is Turkey a good place to buy a property?
Turkey outperforms in pricing, making it an excellent alternative for bargain hunters or those seeking a long-term to midterm investment.
5. How do I get Turkish citizenship through property investment?
You can become a Turkish citizen by acquiring a property in Turkey worth at least $400,000. The spouse and children under the age of 18 will also be granted Turkish citizenship.
6. How important is real estate?
Real estate provides cash flow, tax benefits, equity building, competitive risk-adjusted returns, and an inflation hedge on its own.