Building a real estate money system in USA or Latvia [Comparison]

[baltais]

OK, so my main idea of this topic is to compare which is better real estate investing market - USA or Europe, specifically Riga, Latvia (that is where I am from and is basically among the most promising real estate markets around Europe).

So let's compare:

I will share my story about investing in the city of Riga which is the capital of Latvia (population ~800'000).

So I have bought two apartments in the past 9 months and these are my only ones so far.

First one was a foreclosure and I got it for 25.4k EUR without bank financing - 440 square feet 2-room apartment.
Second one was bought in a just renovated apartment house for 36.5k EUR with 15% down payment - a 390 square feet 2-room apartment in the outer city centre.
Both of them needed a complete inside fixing.

So far I have spent 4500 EUR for fixing the first one but the total will sum up to around ~7500 EUR.
The second one will probably be the same.

For the first one I can get around 240 EUR/month. Tax is around 70 EUR/yearly.
That makes around 8.5% ROI yearly for this apartment.

For the second one I can get around 300 EUR/month with tax being around the same 70 EUR/yearly. So that makes around 6.8% ROI yearly but it has a better potential for appreciation as the apartment is located near to city centre.

When adding also the appreciation for small apartments in Riga which has been 9.5% during the past 12 months and 7.3% during 2016 then this adds up to around 14-17% ROI yearly.

When speaking of real estate investing in USA it all comes down to what city are you investing in.
If we look at biggest cities in USA for example New York City or Los Angeles or even Vancouver, Canada - we hear ROI of around 3-6% yearly (not including appreciation). That's a pretty big difference. Though there are much better examples like Detroit, Cleveland, Pittsburgh, Indianapolis.

What are your thoughts?

 

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[DustinH]

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