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GlobalWealth

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Fair enough. I've thought deeper due to your insight, so I will try to offer some value myself. Reykjavik has to be the #1 city in Europe for this!

The Icelandic Krona to USD has a very good exchange rate. Very high tourist numbers due to Icelandair giving free 1 week layover stays in Reykjavik connecting Europe to North America. I am not sure how property costs are. I will dig into this and provide some numbers but surface level it seems like it would be an ideal fit. Seeing that tourism is a big industry there (not nearly as large as their fishing industry though), you'd hope the locals aren't already oversaturating this opportunity. I'll do some research and come back with some numbers.
I would be very interested to see that.
 
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GlobalWealth

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Thread update. I just ran the numbers ytd on one of my short term rentals discussed in this thread.

For property #1 on annualized basis, my cap rate (gross rental income / total cost) is 13.12%; my roi (return on investment - gross rental income - all expenses inc. interest expense) is 23.38%; my ncy (net cash yield = roi - mortgage principle) is 10.41%.

I am renting this apartment short term and pay a PM 25% plus expenses. My expenses are property insurance, misc expenses, utilities, hoa and mort interest. I deduct the mort principle to get ncy. It is a 15 year mortgage and I put 30% down.

Considering I can use this property at least a week per month and STILL get 10.41% net cash AFTER a mortgage, I'd say that's a pretty decent return.
 

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Great thread! has given me an idea to purchase a cottage or condo nearby for this purpose.
 

mustang1

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Hello @GlobalWealth. Thank you very much for this thread!

I've got a question for you.
From what I understand, apartment near beach in some resort city is more prone to seasonality, but you could be paid much more during high season.
On the other hand, with apartment in some other city (not a resort) you get less income increases during high season, but the income should be more steady throughout the year.
Do you think one of the above scenarios outweigh the other?
I understand you prefer the second option with your investments - is that down to personal preference or do you think this is just a better option?

Also, I really liked your spreadsheets. Would you consider sharing them (in editable files), or is this too much to ask?
 
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Kevin Peter

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Super interesting thread. Way to live life! But, yeah! you need to be extra cautious dealing with many at the same time.
 

GlobalWealth

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Hello @GlobalWealth. Thank you very much for this thread!

No problemo.

I've got a question for you.
From what I understand, apartment near beach in some resort city is more prone to seasonality, but you could be paid much more during high season.
On the other hand, with apartment in some other city (not a resort) you get less income increases during high season, but the income should be more steady throughout the year.
Do you think one of the above scenarios outweigh the other?
I understand you prefer the second option with your investments - is that down to personal preference or do you think this is just a better option?

I would say the answer to your question lies in the numbers.

If I can buy a beach condo for $100k and it generates $20k in gross income in 3 months, that his a better option than a city condo that costs $100k and generates $15k throughout the year. Actually, even if the city condo generates $20k during the year, I would still say the beach condo offers you a better option since it is vacant for your personal use 75% of the year and generates equal income.

Of course there are other factors to consider. For example, Milan, Italy is a very business oriented city and gets a lot of business travelers while Florence, Italy is almost exclusively tourists. Tourism rises and falls with the overall economy whereas business travel tends to be more stable. People don't completely stop traveling for business if the economy is not good, but they will cut out vacations.

And you can always mix and match for your own personal reasons. For example, maybe you own a downtown condo in Denver because you like living there and enjoy the lifestyle. Denver doesn't get a lot of tourism traffic, but it does get a reasonable amount of business travelers. Maybe you also want to have a beach condo for personal reasons, but are willing to take a lower net income because it suits your lifestyle so you buy a condo in Tulum, Mexico. Maybe you could have gotten a better yield on a city apartment in Milan, but for personal reasons you are willing to take a lesser income for the ability to go to Tulum 2 month per year.

This strategy is partly about making money, but more about a lifestyle choice.
 
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GlobalWealth

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Also, I really liked your spreadsheets. Would you consider sharing them (in editable files), or is this too much to ask?

Sorry, but I don't put this out for the public. I make this information available to our premium members so it would not be fair to give it away.
 
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GlobalWealth

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Super interesting thread. Way to live life! But, yeah! you need to be extra cautious dealing with many at the same time.

Kevin,
I agree. Finding excellent property managers is the key here. This strategy does not work well when you are 10k miles away from your property if you don't have good people to rely on.
 

Kevin Peter

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Kevin,
I agree. Finding excellent property managers is the key here. This strategy does not work well when you are 10k miles away from your property if you don't have good people to rely on.


Yup, coming to the point! Do you have a list of such property managers that we people in the forum can get in-touch with?
 

GlobalWealth

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Yup, coming to the point! Do you have a list of such property managers that we people in the forum can get in-touch with?

That is purely location dependent. I don't have a list per se. Unless you are investing in exactly the same town as me, it wouldn't be usable for you anyway.
 
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GlobalWealth

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Am currently look at Ontario, Canada. How can you help me
Read the thread. Lots of info there.

Not sure what else is your question.

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Rawr

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Dude, maybe you can chime in here, but I haven't seen anything resembling cheap in barcelona or palma (at least not far from center) 1BR is like 100-130k Euros to start.
 
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GlobalWealth

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Dude, maybe you can chime in here, but I haven't seen anything resembling cheap in barcelona or palma (at least not far from center) 1BR is like 100-130k Euros to start.
I have no idea if that's cheaper or expensive without looking at rental rates and occupancy rates.

If occupancy is 80% and rental rates are eur120 per night then that sounds cheap to me. Thats a 26% cap rate at eur130k.

If the occupancy is 50% and rental rates are eur40 per night then it's expensive at a cap rate of 5%.

If Barcelona is not a good return then look elsewhere.



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This thread is awesome. Thanks for posting it!

I've been considering doing this in Spain, Portugal, Czech Republic for quite some time. As well as Nicaragua and Colombia. I'm Canadian and currently live in Costa Rica. I recently spent about 6 weeks in Spain, and couldn't believe how cheap it was. I was in Barcelona and then south in Costa del Sol.
 

GlobalWealth

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This thread is awesome. Thanks for posting it!

I've been considering doing this in Spain, Portugal, Czech Republic for quite some time. As well as Nicaragua and Colombia. I'm Canadian and currently live in Costa Rica. I recently spent about 6 weeks in Spain, and couldn't believe how cheap it was. I was in Barcelona and then south in Costa del Sol.
Seems we have similar idea. Spain, Portugal, and Colombia are on my radar.

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EmperorPear

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Hey, I'm hearing Greece has some cheap apartments for sale, with the whole bankruptcy thing, and I wanted to ask you guys if it's wise to buy one for the purpose of renting it. Will it pay itself out?
There is a specific one in Agia Triada, 1br, pretty near the shore. It goes for around €18k. I doubt it is in pristine condition.
 

GlobalWealth

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Hey, I'm hearing Greece has some cheap apartments for sale, with the whole bankruptcy thing, and I wanted to ask you guys if it's wise to buy one for the purpose of renting it. Will it pay itself out?
There is a specific one in Agia Triada, 1br, pretty near the shore. It goes for around €18k. I doubt it is in pristine condition.
Possibly. You need to research market. It all about the math

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GlobalWealth

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Fair enough. I've thought deeper due to your insight, so I will try to offer some value myself. Reykjavik has to be the #1 city in Europe for this!

The Icelandic Krona to USD has a very good exchange rate. Very high tourist numbers due to Icelandair giving free 1 week layover stays in Reykjavik connecting Europe to North America. I am not sure how property costs are. I will dig into this and provide some numbers but surface level it seems like it would be an ideal fit. Seeing that tourism is a big industry there (not nearly as large as their fishing industry though), you'd hope the locals aren't already oversaturating this opportunity. I'll do some research and come back with some numbers.
Did you ever do the numbers on Reykjavik? Looks like I'm going there in a couple of weeks.

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The Duc

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Hey, I'm hearing Greece has some cheap apartments for sale, with the whole bankruptcy thing, and I wanted to ask you guys if it's wise to buy one for the purpose of renting it. Will it pay itself out?
There is a specific one in Agia Triada, 1br, pretty near the shore. It goes for around €18k. I doubt it is in pristine condition.

I would be VERY cautious purchasing property in Greece right now. I have family and friends there and spend around 3 months there every year. They have done some very screwy things with property taxes over the last couple of years. It wouldn't surprise me at all to wake up one morning and find out your property taxes had doubled.

Long term rental rates are really cheap. Signing a long term rental contract and working out some sort of kickback to the owner to let you sublease would be a viable option. Cash is king there right now as they still have withdrawal limits on the banks.
 

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Hi Global Wealth. Great thread. I live in the US and own a 4 plex in Tofino, British Columbia that I have owned for 13 years. Always had it rented long term, but this summer, spent a MONTH there getting 2 of the 2 bedroom units prepared for short term vacation rentals. I have a property manager there, and the company handles all bookings, guests, etc. Its been working out so far, but I haven't seen what happens in the winter yet.

I'm so glad you posted this. I am considering staring a PM company that will handle only short term rentals. No, it is not passive. But it is a company that I could sell in the future.
 

NickS

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Maybe I'm just paranoid but what is stopping your property manager from cutting you out completely? You'd be none the wiser, thinking there is no one renting while your pm collects all the money under the table.
 
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Maybe I'm just paranoid but what is stopping your property manager from cutting you out completely? You'd be none the wiser, thinking there is no one renting while your pm collects all the money under the table.
I assume the tenant books and pays online via Airbnb?
 

Superwoman

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I assume the tenant books and pays online via Airbnb?
I can not speak for GlobalWealth, but my PM in Tofino uses VRBO, AirBNB, as well as his own website for bookings. I can see the availability calendar there. I have not gone through and kept track of days and matched them up to his detailed statement I get every month. (My statement shoes each guest, which unit they booked, days, rate, etc). I have to have a level of trust/comfort with him. I will say, that it is a small community, and if he were less than honest, the word could spread quickly and squash his business.
 

Superwoman

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I also wanted to add that we financed our house in British Columbia 12 years ago. As an American, it is not any more difficult to obtain financing in Canada. And their paperwork to do so is much less than here. The banks write and keep the loans. You DO need to file taxes every year, and there are some funny tax regulations for being a foreign landlord. We use a Canadian accountant, because I would not know the proper tax info to complete a return. I'm not an accountant, and I don't want to be.
 
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GIlman

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@GlobalWealth sorry if I missed it, but can/do you depreciate foreign properties on your taxes? Certainly that would make it even more appealing as your depreciation would shield a significant portion of your revenues from taxes.

Based on the US 39 1/2 year cycle that comes out to essentially 2.5 percent of the purchase price in tax deduction each year. But this assumes you file in the US.

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Natural

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Thanks for a great thread.

The criterias seems to fit me pretty good. I make money location independent, have a bit of cash saved up (50.000€+) etc. but I have never invested in properies before.. I'm 24 and from Denmark. I have been thinking about buying an apartment in central Budapest to rent out funny enough. Just never had the balls to follow through. Any advice for first timers?

I've been looking at the numbers as well and I think 80€+ per night is pretty high in locations such as Budapest. I can see most decent apartments for 2 people rents out for 35-50 USD per night, but again I guess it all comes down to the math? Which I am not so good at, hmm. Feels a bit overwhelming. Guess I'll have to do some more reading :)
 
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GuestUser140

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I've been looking at the numbers as well and I think 80€+ per night is pretty high in locations such as Budapest. I can see most decent apartments for 2 people rents out for 35-50 USD per night, but again I guess it all comes down to the math? Which I am not so good at, hmm. Feels a bit overwhelming. Guess I'll have to do some more reading :)
I have a similar feeling when it comes to Airbnb at times.
For a solo traveller, finding a hotel deal on Trivago often comes out cheaper, especially in the third world.

Have you looked at specific rentals (1BR/2BR/...) in specific areas (centre)? Otherwise it can get overwhelming and it might look like prices are all over the place, while good looking centrally located units fetch the best rates. Compare with purchase prices of said aptmnts.
 
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Jinxus

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Global, you're American, right?

What kind of visa do you have for the countries you own property in? Surely you can't do this on a tourist visa, can you?

edit: found your reply on page 2 ;) thanks for the thread
 
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Thank you for the inspirational thread, GlobalWealth :) It sounds like a very appealing lifestyle. I'm not at the point where I'm location independent for work, but it would be possible. It also seems like a more accessible way to start building a (global!) real estate portfolio with nearly passive income, giving the option to step up to larger dollar figures over time.

I spent a few hours going through Numbeo and Airbnb data for some of the countries mentioned in here, dumping it into a spreadsheet. Since outright buying is far off, I assumed I'd be going the 30% route. I just looked at the larger cities and used the Numbeo's average apartment price assuming 80m2. All 20 cities I looked at gave me negative 3-4 figures per year, but without actual purchase price it's not a very meaningful number. I was just trying to be able to get a high level filter for desirable places.

If I understand it right, you look for countries with low wage, low consumer price index, but closer to 100 on the local purchasing power. Do you then look for top tourist towns within the country, or stick with a popular location within the capital city? I imagine this would involve a fair bit of research about the country, its economy and attractions.

I feel like I'd need to do a lot of traveling to see where I'd want to visit regularly, before even looking at specific properties.
 

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