Six Places to Buy Real Estate Overseas
The best – and in some cases, very unexpected – places for real estate investment in 2017
Live and Invest Overseas, led by Kathleen Peddicord, has released their ranking of the top nine best places to buy real estate overseas in 2017. The top four ranked destinations reside in Portugal and Colombia, while other places on the list include the Dominican Republic, Mexico, Brazil and Cape Verde in Africa.
“Our best places to buy real estate overseas list is part of a new series of New Year rankings that the editors of Live and Invest Overseas have put together,” said Kathleen Peddicord, author and publisher of Live and Invest Overseas. “For this list, we’ve uncovered the best – and in some cases, very unexpected – places for real estate investment in 2017.”
Here is the firm's top six locations to buy real estate outside of the United States in 2017.
Ranked number one on the list is Algarve, Portugal, which is the home to some of Europe’s greatest bargains in real estate. Known for its Mediterranean beaches, Algarve’s coastal property comes with prices that are now discounted further for buyers with U.S. dollars to spend. Also, thanks to restriction of coastal construction, this property will surely maintain its value long term.
Leverage is possible for foreign buyers and the average cost in the Algarve is 118 euros per square foot. At today’s current exchange rate, that computes to $125 per square foot…a 25% currency discount from 2014 prices in U.S. dollar terms.
Coming in second, Lisbon, Portugal is a large area made up of a variety of neighborhoods, each with its own unique look, feel, and character. Each neighborhood is interesting as both a location for a short-term tourist rental or a long-term rental for the local market.
Though this city hasn’t been a considerably elite tourist destination in the past compared to other European capitals, Lisbon is changing rapidly and has much to offer its visitors. Compared with other West European capitals, Lisbon generally offers better weather and property prices, along with a lower cost of living.
Per-square-foot prices in Lisbon range from a low of 182 euros ($193) to as much as 638 euros ($676). This means a 538-square-foot apartment in one of the lowest-cost neighborhoods could sell for 75,000 euros ($78,000). In comparison to an apartment of the same size in Chiado, the Lisbon location would be four times cheaper.
Like Algarve, given the current strength of the U.S. dollar against the euro, dollar holders have the ability to capitalize on as much as a 25 percent currency discount from 2014 prices. Some areas of Lisbon have seen appreciation of as much as 20 percent in the last year. Areas outside the “best” neighborhoods are more optimum to look at for a greater value.
Third on the Live and Invest Overseas’ list is Cali, Colombia. Cali is one of the fastest-growing tourist markets in Colombia and its property values are considered a global bargain. The U.S. dollar is at a record high against the Colombian peso, making this undervalued market irresistible.
In the prime areas of Cali (strata 5 to 6), depending on the age of the unit, the price-per-square foot can range from 139,354 to 464,515 Colombian pesos ($47 to $158). For older units, between 10 and 20 years old, investors should expect to spend between 139,354 to 232,258 Colombian pesos ($47 to $79).
For newer units (less than 10 years old), price per square foot can range from 232,258 pesos to 325,161 pesos ($79 to $111). For new upscale luxury projects, the price will range from 325,161 to 464,515 pesos ($111 to $158).
Ranked fourth on the list, Bogota, Colombia is prime location for Latin American business, meaning it’s a strong business traveler rental market. Because Bogota is Colombia’s most popular tourism destination, international travel to Bogota is increasing, which means their tourist rental market is only growing.
In the principle areas of Bogota (strata 5 to 6), the price per square foot, depending on the age of the unit, will range from 464,515 to 1 million Colombian pesos ($47 to $340). While older units range from 464,515 to 836,128 pesos ($47 to $284), newer construction units in the most exclusive areas can go from 836,128 to 1 million pesos.
Las Terrenas, Dominican Republic
Ranked fifth on the list is Las Terrenas, Dominican Republic. Las Terrenas is more accessible than ever and the cost of its Caribbean real estate is a bargain compared with the rest of the region. Numbers of both international and domestic tourists in this coastal town are multiplying, which means the expanding of rental demand–and that foreigners can finance.
Depending on proximity to the water, prices range from as little as $93 per square foot to a high of $232 (right on the beach), which means a one-bedroom apartment costing as little as $100,000.
Playa del Carmen, Mexico
Following Las Terrenas on the list is Playa del Carmen, Mexico, another market with an increasing rental demand due to numbers of both foreign and domestic tourists being better than ever. Although Playa del Carmen’s property prices aren’t outstandingly cheap, the yields are strong and the coastal resort town’s average occupancy rates are as high as 80 percent per year, above the regional average.
Playa del Carmen, Mexico Real estate is traded in U.S. dollars in Playa, but expenses as a rental owner are in pesos. This offers a great advantage, as the Mexican peso, like the Colombian peso, is at an all-time low against the U.S. dollar. As the fastest-growing city in Latin America, Playa enjoys an active resale market, which is a crucial advantage upon the decision to liquidate.
For properties located closest to the beach and 5th Avenue, the average price per square foot in Playa del Carmen is over $279. It is possible to find units for just under $186 per square foot further away from the beach, however, it will not command the highest rental rates.
For more overseas real estate recommendations, visit www.liveandinvestoverseas.com.