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NOTABLE! Live Rent Free in Multiple Countries

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GlobalWealth

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After reading @G_Alexander post here - https://www.thefastlaneforum.com/community/threads/stop-paying-rent-live-for-free.51893/ - I thought I would share with you a similar strategy that can be implemented on a more global scale.

First of all, this is not for everyone. This is for people who are interested in living in multiple countries and have the ability to work from anywhere.

This is not a get-rich-quick or even a business strategy. This is only for people who have a bit of money to invest and a virtual type income allowing them to work from anywhere in the world.

If this appeals to you however, I can teach you how to earn 7-10% net cash yield on multiple properties in multiple countries allowing you to live rent free and make a pretty good return at the same time.

Let me explain....

First of all, ideally you need cash. It is possible to get loans, but getting a mortgage outside of your home country can be a bit more difficult. Not impossible, but more difficult.

Secondly, you need the ability to travel to the place that interests you and spend some time on the ground meeting with real estate agents, contractors, property managers, etc. This is not passive getting started. It can be once set up, but requires real work on the front end.

The lazy need not apply.

Third, you need to open your mind a bit and get out of your comfort zone. You have have had dreams since you were a kid to live in London, but I can tell you - London is a horrible option for this strategy because you won't get any reasonable rate of return doing what I am suggesting.

You need to consider places off the beaten path that you may not have previously considered or have been negatively swayed due to mainstream media - Colombia, Serbia, Portugal, Brazil, Lithuania, Hungary, etc are all great option - but not places most have considered.

And lastly, be prepared for your friends and family to criticized this new life you have created flying to different countries every couple of weeks living in cool locations and experiencing things they would never have the courage or dreams to experience.

Let's get started.

First of all, you need to be aware of airbnb(dot)com and booking(dot)com. These are your platforms (there are others as well, but if done properly you won't need others). Also recognize this violates @MJ DeMarco's book's rule of control. Yes, you are somewhat in the hands of these marketplaces, but many of you running Amazon, Etsy, Ebay, Shopify, etc stores are in the same situation. And this is not your primary business model either. This is a way for you to invest in international real estate, live like Richard Branson, and earn some cash in the investment.

What you are looking for are cities with low wage and cost of living. You can research this on sites like numbeo(dot)com and others. I like numbeo because it allows you to research all aspects of cost of living and compare to other cities. It is very useful.

You want a a low cost of living city because these cities tend to attract tourists - your target audience. For example, British tourists tend to travel to various Eastern European cities for holiday because their money goes much, much further.

Anything in Switerland, UK, Norway, Finland, Sweden won't likely be candidates as they are typically very costly locales.

Next you want to find cities that have relatively high tourist traffic. These places need to have something of interest for visitors. Festivals, arts, architecture, Unesco World Heritage sites, beaches, food culture, etc.

One way you can check that is to go to airbnb(dot)com and look up your city of interest. Look up 15-20 properties for rent and look at their calendars for the next 2-3 months. Do they have a lot of vacancies, or are they rented out 15+ days per month? You can also get a feel for the pricing in the market for what a 1br, 2br, etc apartment may rent for per night/week/month.

If craigslist(dot)org is in the city, it is also a good resource to check the rental rates. But typically airbnb is good enough.

As is the case with much real estate investment advice, location is key. It is especially key in short term rentals. I would pay 2x as much for a center city apartment that is walking distance to local attractions than for an apartment that is 5km away that forces guests to drive or use public transport. Of course yield is key here, but the center city apartment will rent out much easier and will also be an easily saleable asset if you decide to unload the property in the future.

Next do some research on the local market prices for apartment sales. You can find real estate agent sites or other sites that aggregate real estate for sale in every medium+ sized city in the world (thanks Al Gore for the internet...).

Start building a spreadsheet to analyze pricing. Depending on where you are in the world will determine the unit, but for argument sake here let's just discuss euro/m2.

Create a spreadsheet and start analyzing similar properties in the city where you are interested. You will get a feel for the euro/m2 to give you some baseline for measurement.

Now look at airbnb and see what the average rental rate is per night and the average number of nights those apartments rent for.

For example, let's say you can buy a 50m2 apartment for eur75,000. That is 1500 eur/m2. If that apartment can rent for 80 eur/night and the average for those type apartments is 15 nights/month then....

So 80 eur/n X 15 n/m X 12 m = eur14,400 per year. That is your gross income.

eur14,400 / eur75,000 = 19.2% gross cap rate.

Of course you will have expenses associated with that but you can count on 40-50% expenses.

I pay my property manager 25% of gross rents. She handles meeting guests, dealing with any questions, checking them out, checking for damage, collecting deposits, cleaning, all communication, everything. The only extras are hard costs of paper products, soaps, lightbulbs, etc.

After you factor in utilities, property tax, insurance and holdback funds for future repairs, you can expect to have a total expenditure of around 40-50%.

Based on 50%, that leaves you with eur7,200 income, or a 9.6% net cash yield.

That is not uncommon.

In some cases you won't do that well, in some cases better.

For example, you may find a place in Florence, Italy you really love and would love to spend time there. After analyzing the numbers you realize you may only get a 6% net cash yield. But if it enhances your quality of life by spending a week per month in Florence, go for it. There is more to life than just money.
But getting a net cash yield of 6% and a free place to live in Florence is still pretty damn sweet.

Using your airbnb(dot) come platform, you can basically just block off the days on the calendar as unavailable for when you want to be at your apartment in Florence (or wherever). It takes a bit of preplanning but still pretty simple.

You can play around with the rates and charge more during holidays or certain events. For example, if you owned an apartment in New Orleans around Bourbon St, I would raise rates significantly during Mardi Gras.

Of course this is a strategy that cannot be completed overnight, but if it appeals to you I would start researching some place that appeals to you. Maybe it can be a good opportunity.

One last point to make. I truly believe people nowadays need to consider investing some of their wealth outside of their home country. This strategy is a multifaceted diversification approach allowing you to diversify outside your home currency, diversify into hard assets (real estate), and diversity outside your home country.

If this lifestyle fits you or inspires you, then you can buy apartment #2, #3, etc and live rent free around the world.

Feel free to ask me questions.
 

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GlobalWealth

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Just made offer on a deal today. Will follow up tomorrow with numbers if anyone is interested.
Ok, here's the deal.

66m2 (710ft2) 1br/1ba apartment in center city (european city). Purchase price of eur97,000 ($107,000). I will spend around eur3000 ($3300) to renovate.

Based on comparables (and my experience) in the area, I can rent for 15-18 nights per month year round. Average rent will be eur70/night ($77).

Based on 15 n/m, that is eur70 X 15 nights X 12 months = eur12,600 ($13,900) in gross cap rate.

My pm fee is 25% and bills, prop insurance, prop tax, and maintenance is another 15%.

eur12,600 - 40% = eur7,560 ($8,300).

Based on the purchase price plus renovations my net cash yield is eur7,560 ($8300) / eur100,000 ($110,000) = 7.5%

Keep in mind that is using a low estimate on my rented nights per month and a low nightly rental. I used eur70/n as the base, but we charge more during holidays and events (eur100-120/n) on these properties and I frequently get more than 15 n/m.

Also keep in mind that this allows me to stay in my own property several days per month and still get a 7.5% net cash yield.

Basically I am able to earn a great passive cash yield AND have a free place to live.

Hope that helps.
 

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Jill

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Damn, I didn't think of that. I need to find someone to do this as well. Great idea. I suppose you gave the person a list of cities and a framework then told them to search numbeo to find the best combo?
Yup. Basically. I gave him the countries/regions in which I'm interested. Then I told him to find the 200 largest towns/cities in those regions. So for $12 ($3/hr x 4), I have a spreadsheet of those 200 places with "Buy Apartment" averages in both city center, out-of-city-center, 1 br and 3 br, as well as their monthly rental averages. A simple formula in Excel tell me which ones are the best deal (at first glance).

Now I have him going thru airbnb to find nightly rental rate averages/occupancy rate approximations for those that look promising.

Next step will be to comb thru Mondinion to find prospective properties for sale in those places. I have someone else looking up realtors, MLS-type search engines in those areas.

I guess it's true what they say: "Laziness is the mother of resourcefulness." Well, that may be a slightly bastardized version of the quote. But you get the idea. ;-)
 

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What do you for school? Home school I'm guessing? Or are your kids grown?
Now my daughter is 19 (almost 20). But when she was younger she was in an online school.

Previously my youngest son was also in an online school when he was living solely with me (divorced).

Now my 2 sons (16 and 8) live with their mother in the states.

I am not a huge fan of home school as I don't want to be the teacher. But there are many online schools that work great.

Last year my 8 year old spent an average of 2 hours per day with his online school. He could work at his own pace. Some days we had a busy day and he didn't do school at all. Then he would work longer days to get caught up.

But he got a much more valuable education. Just in the past year he spent time in Latvia, Estonia, Hungary, Panama, St Martin, Anguilla, Canada, and several parts of the US.

That education is priceless and can never be duplicated in a classroom.

All 3 of my kids have been in 25-30 countries in total.

My daughter now lives in London on her own. Without her earlier experiences I doubt she would have been confident enough to buy that one way ticket to London almost 2 years ago.




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Just a quick update for those interested. I just came back from Medellin, Colombia. My impressions of Medellin are very good.

Perfect weather, great food, great energy/vibe, big entrepreneurial community, huge digital nomad community, friendly people, beautiful women, and ridiculously low cost of living.

My 45 minute Uber ride from the airport to my apartment cost $21. The next morning a buddy and I went to breakfast, egg omelets, coffee, bottled water for both of us - $7 total. Uber ride in the city 10 minutes to a buddy's place - $2. Coffee (Colombia has the best coffee in the world) at a high end cafe - $1.50. Normal price dinner at mid price restaurant - $10-12.

Real estate prices are seriously low. One year ago 1800 COP (Colombian pesos) = $1usd. Now it is 3400 COP = $1. Colombian economy, and thus COP is closely correlated to the price of oil as they are a fairly large producer. When oil prices return to anywhere close to $40 or $50, the COP will correct up towards 1800/$ again.

In other words, if you buy a place for COP340,000,000 ($100,000), and the COP returns to 1800/$, your place is now worth $190,000, even if the Colombian property market stayed flat in COP terms.

I looked at a few apartments while there to get a feel for the market. For example, a really nice 2BR/2BA 1500ft2 penthouse apartment in the center of the city in the best neighborhood was selling for $115,000. It could easily rent for $1500/month. That is a 16% cap rate. Even if you rented short term, stayed there yourself part time, and rented the rest, you could easily manage a NCY (net cash yield) of 8%, which big upside and a really cool place to spend time.

Downsides for Medellin. The biggest one I can see is the (wrong) negative media perception as being an unsafe place. I was out late at night alone and saw many single women walking alone on the streets as well. If it were unsafe, I seriously doubt I would have seen that many single women walking alone at night (enter your jokes here). Seriously, I had no issues and felt perfectly safe. Safer in fact than many big US cities.

Language. You will need to learn Spanish. Only 4% of all Colombians speak English. Traffic sucks. It really sucks. If I needed to commute to a job, this may be enough to make me less interested. Luckily, like me, most of you interested in this lifestyle or foreign investment aren't looking for local jobs.

Feel free to ask questions.
 
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GlobalWealth

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I thought I would update anyone interested in recent developments.

I was working with my next door neighbor to possibly buy his apartment when suddenly he sold it to someone else. The funny thing is the new owner came to me and asked if I would be interested in renting it.

Long story short, I worked out a deal to rent his apartment for eur470/m plus utilities. Total utilities average around eur100/m. That is eur570, or around usd630/m.

The apartment is 83m2 (~90ft2), 2br/2ba. It is in the very center of the city in a fantastic location (I should know, I live next door). Everything is walking distance with dozens of restaurants, shopping, coffee shops, bars, clubs, theaters, museums, etc. all within a short walk.

I spent around eur600 fixing the place up with new linens, some decorations, new paint, etc. The place really looks incredible.

I am starting out very low on the daily rent price (around eur60/n) as the listing services (airbnb, booking, vrbo, etc) like to see some reviews and lower prices help get guests. Once I have some reviews I will up the base rent to eur80/n.

In the first 10 days since listing, I have gotten 10 reservations for an average of 4 nights per visit. I am nearly full for April, half booked for May, and reservations for June and July already.

Based on my estimates at eur60/n, I should net at least eur300/m. Once I am up to eur80/n, I will net a minimum of eur600/m.

All hands off with my PM.

Not huge money, but millionaires are usually made 100 euros (or dollars) at a time.
 
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GlobalWealth

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Another update on the foreign properties.

This week I am installing keyless entry for all of the properties.

I fired my PM due to some ongoing issues and conflicts with her.

Ironically I likely wouldn't have fired her if it weren't for these issues but it motivated me to automate this process - which is great.

I have hired 3 cleaners to do the cleaning and they will have their own code to enter and exit the properties. Guests will get check in and out procedures by email. We will not meet guests personally once the keyless entry are installed.

It will cost about €300/property for the locks but the cost savings on the PM will yield €300 - 700 /month /property.

That's a pretty decent ROI.


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GlobalWealth

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Hey @GlobalWealth, any updates, conclusions, new tips? Anything you'd add today, one and a half years after starting this thread, for a person who wants to follow this strategy?
Great timing.

2 days ago I made a deal to rent my neighbor's apartment. He lives in another country and doesn't come here very often anymore.

He was in town and I invited him over for tea and he told me his situation that he will receive the his place to students.

I told him to just rent to me for the same price. I was clear it would be to sublet for short term and that I would take care of the place. He said no problem.

So we are signing a one year lease for €450 per month plus utilities (average €100 per moth). I have the option to renew at the end of the year for another year for the same price.

The apartment is 2br 3ba 83m2 right in the center of the city.

At a very conservative estimate of €80 per night and 15 nights per month, after paying all bills and property manager I still net a minimum of €600 per month.

Not big money but it's very little work for me and another small stream of income.

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I read the first couple of paragraphs without checking to see who the poster was. I then scrolled up to check on the poster was to see if the rest of the post was worth reading. Since the poster is @GlobalWealth and I know that he has actually done what he has written about, I then went on to read the rest of the post. Interesting topic.
 
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GlobalWealth

GlobalWealth

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I read the first couple of paragraphs without checking to see who the poster was. I then scrolled up to check on the poster was to see if the rest of the post was worth reading. Since the poster is @GlobalWealth and I know that he has actually done what he has written about, I then went on to read the rest of the post. Interesting topic.
LOL, I was expecting, "I went to see who wrote it and then moved on to another topic...."
 
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I spoke to a man who's wife is a real estate agent and he is a home inspector. It is how they met lol perfect. anyway. They had a house and an upscale type ranch condo thingy they were renting out as a venue. Well they downsized. Put BOTH on air Bandb and the house that was at the time being rented in a standard rent/lease thing was making him about 1k a month in profit. It now makes him 10K IN PROFIT! a MONTH. and the ranch thing with land a horses RENTS FOR THE NIGHT IN THE thousands! he says he won't rent it unless it meets x night requirements and y occupant requirements. He says he has it set up so that it is cleaned easily and the doors are all automated no key to key swap, Just a code to get in and bam it is yours. He says they all have to put up a solid security deposit so there goes really all the land lord burden that comes with your average tenants. He says its about 95% passive income. THE only real gripe is he pays a hotel tax. but still. nice clean income, less land lord burden, and its grosses 150K to 200k in PROFIT a YEAR from TWO locations.

https://www.thefastlaneforum.com/community/threads/golden-nuggets-tips-processes-how-tos.35110/page-8#post-433458

from the golden nuggets thread around January
.
2 things

A) you do not need to do this in foreign or crazy locations. Many people have been doing it apparently in the US of A. Dallas is a great hub cause of all the business

B) This does not seem to be that new.

Cash is king
 
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GlobalWealth

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Page 2 of the spreadsheet has an amortization schedule that it pulls the mortgage data from. I do run the spreadsheet on every deal before making any offer.

While the ROI is always better with mortgage properties, my priority now is more on cash flow, not leveraging up to acquire more assets.

From my experience playing around with the spreadsheet, you get your best combination of ROI and FCF/NI at around 30%.

Obviously the FCF increases as you increase your equity, as your ROI will also decline.

And obviously your FCF is maximized when you pay cash.

Considering US 10y treasuries yield under 2% and the S&P500 dividend yield is around 2%, I see no reason to keep a lot of cash parked there now as there doesn't appear to be much upside.

You could argue that the ECB is monetizing debt now and thus the Euro markets will go up (and they have), but it seems precarious to me at the moment.

To get 6-10% nearly passive yield, diversify outside of the equity markets, diversify into hard assets, diversify geographically, and diversify across currencies just makes sense.

Getting to live there rent free is just the icing.
 
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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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Sorry for offending you, that was not my intention. I just tried to help by showing that living in the place you own often isnt financially the best choice. You disagree and thats fine
I'm not offended. You came across as argumentative. There is no point in me restating the premise of the thread. You even make a statement here that "living in the place you own isn't the best...".

You cannot say this is true for all people. In fact, I personally live in multiple apartments. And all of them make me money. Is that the best choice for you? I don't know. It's none of my business. But it is the best choice for me at this point in my life.

The world is not black and white. Best to learn that early.

can you tell me why you think its dumb to buy RE in the hopes of future appreciation? Because its impossible to forsee the future or its better to focus on short term yields?

It is impossible to know the future. You should never buy a property at 100k with the expectation it will appreciate to 150k in X# of years.

However, if you buy the property at 100k and it earns 10k, then you know you can earn 10k in cashflow. If the property falls to 80k, you are not terribly concerned. If it goes to 150k, maybe you sell, maybe you keep earning 10k.

I have never met a smart real estate investor that buys a property hoping for future appreciation. The clowns in the 90's and early 00's bought "knowing" property would appreciate 5-10% per year so they were willing to take break even or negative cashflow. Those clowns now work at Starbucks making my coffee.
 
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What if you could buy properties overseas, have a place to crash when you visit, and just rent it out 95% of the time when you're not there?
yes, this is exactly what I am proposing. for example, own 3 properties; Lisbon, Budapest, Denver (just examples). spend a week in Lisbon, then to Budapest, then to Denver. Mix in other travels, business trips, play, etc.

The strategy you describe is a practical one, realistic locations that make great starting points. But when we discuss pure fantasy (or rather, long-term future goals), it's funner to speculate on owning expensive properties and what Airbnb will fetch on those.
those may be fun speculations and could possibly work, but not sure airbnb is the right venue.

For example, a beachfront home in Hawaii can run between $1-3 million. It could easily fetch $300-400 per day, but of course can you actually rent it out consistently, find a property manager you trust, etc etc
for example, I can easily find 1-2 bedroom apartments in various spots in europe for less than eur150k that I can easily rent for eur100-150/n. that will give you a much better return than spending 1mm and renting for 300-400/n.

Nonetheless, definitely a liberating thought. After all, without properties across the globe, how would one justify owning a jet?
for sure that is a great goal and excellent plan. but you don't need to be of the jetsetting variety to implement the strategy I laid out. not exactly for the $9/h stockboy either, but no need for big wealth to live this way.
 

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Somwehere in Costa Brava or Costa Del Sol ....I am not sure yet....I just know that i am done with the 6 months winters here ...looking to relocate.

My friends bought 2 appartments ( at these prices , why not ? ...ther pay Spanish taxes on the rent but not Canadian )
 
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What do you think, wise friend? Should I look into making a real estate investment outside the Toronto core with a 5%? I currently rent-free with my parents and am not under pressure to leave. I might be able to just transition straight into renting. Or should I look outwards?
I cannot give you specific advice. As you told me you are young. I assume 18-21. There are a lot of variables to consider. I can only tell you what I would do if I were 20 years younger.

Focus.

Focus on what makes you money and start your own business as soon as humanly possible. Save as much cash as you can. Keep a rainy day fund. Get free from the job slavery.

If investing in real estate will distract you from getting your own business up and running, don't do it yet. It may not be your time.

If investing in real estate IS the vehicle you choose to get out of that job slavery, they do not delay.

I don't know enough about the Toronto market to tell you if it is a good deal though.

Isn't there a certain feeling that real estate is a way to "park" your wealth, rather than grow it? Should I really do the mortgage thing?
Some people do in fact use real estate as a way to "park" wealth. Some people start out with leverage though and use real estate as a way to create wealth.
 
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Just a quick update.

I fired my old PM that handled some of my properties. She started to fall apart in the past couple of months so I replaced her.

The new PM is doing great and profits are actually increasing month vs month.

My ROI runs around 20% average.

I am looking to add one more, maybe two properties this year.
 

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@GlobalWealth love your articles.

Since Airbnb became a thing, this has been a topic that has been tossed around with my fellow freedom-minded friends.

What if you could buy properties overseas, have a place to crash when you visit, and just rent it out 95% of the time when you're not there?

The strategy you describe is a practical one, realistic locations that make great starting points. But when we discuss pure fantasy (or rather, long-term future goals), it's funner to speculate on owning expensive properties and what Airbnb will fetch on those.

For example, a beachfront home in Hawaii can run between $1-3 million. It could easily fetch $300-400 per day, but of course can you actually rent it out consistently, find a property manager you trust, etc etc

Nonetheless, definitely a liberating thought. After all, without properties across the globe, how would one justify owning a jet?
 
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I measure caprate here using; NOI (net operating income / total cost

I measure ROI (return on investment); NI (net income) / invested capital

I measure FCF/NI (free cash flow / net income); well....fcf / ni
 
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Hi @Jamesdoesmith

Agreed you can do it anywhere. The point of the thread was for those interested in a different lifestyle living in multiple countries and earning money while living rent free.

I like the keyless entry. I have one with the same thing. No key exchange and no need to meet guests. You can even see when people enter and exit using an app on your phone. If you are not local then you only need a good cleaning person who is reliable and will show up when guests leave.

I definitely have a minimum number of nights and also take a reasonable deposit. But that takes some balance. While it seems like it would be easier to have a 14 night minimum, you will lose a lot of potential renters. I typically have a 3 night minimum. I also charge a cleaning fee in addition to the rental rate.
 

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Out of curiosity, do you have any experience in Germany? I see that it wasn't mentioned yet, and I've spent more time there than other EU countries. Cost of living can be high, but it is the richest per capita country in Europe. Many good schools, opportunities, etc.

Would high rent costs offset the high property costs, depending on the city? I personally spent a lot of time in Kassel and being a city of 200,000 with two colleges, it seems like the place I'd check out for with a lot of upside. Spent time in Frankfurt and Berlin as well and being more accessible via airports they may be the better option.
As GW mentioned in the OP, it will require that you do some research. I just took 5 minutes to look at Numbeo and airbnb for you. An apartment in Kassel city center sells for ~ 55% more than in Budapest, for example, but rents out for an average of 11% less per night. These are broad strokes, of course. But as he recommends, I think this would be a good place to start. (I don't have time - or desire - to delve into the minutiae right now. So I have hired a couple of people on Upwork (formerly odesk) to scrape the sites for me so that I can do the analysis at my convenience.)
 
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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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Thanks, @GlobalWealth. It makes a lot of sense. I like the example of an apartment in Lisbon vs P2P lending. However, I think there are other benefits of owning foreign real estate even if you're not going to spend a lot of time in a foreign country, for instance it can be a bolt hole in (an unlikely, but still) case of a local collapse, or just a way to diversify yourself internationally with a real-world asset (vs digital P2P) as well as a way to increase your financial privacy.
@MTF, yes I agree. There can be numerous benefits to real estate if bought properly. A wise re investor once told me you only make money in re at the beginning. My interpretation of that is the price you pay is critically important to your long term gains.

There is a very famous investment book call F Wall Street. He covers it in the realm of stocks as well in his discussion about the price you pay for a stock. For example, a stock at $50/share paying a 4% dividend is good. But the same stock (assuming the business remains functionally the same) at $25/share now would pay an 8% dividend. That gives you a higher cash yield and higher potential gain in capital appreciation, from the exact same asset.

Its the same in re. If you pay 100k for a property that brings in 10k/year that is a 10% yield. But if you can get the same property (again, functionally the same market) for 50k, then you have a 20% yield and higher potential appreciation.

Real estate offers the benefit of a place to live, or a 'bolt-hole' as you call it. I prefer the more positive thought of a place that I enjoying spending part of my life.

This strategy may not be your ONLY strategy for wealth. But it can be a good lifestyle strategy to perpetuate wealth and make it grow while you continue working on your primary cash machine.
 
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If you're coming up with an accurate average occupancy rate, the 10% cushion shouldn't be needed. It might be handy to use it as a worst-case scenario to see if you'll maintain profitability during weak periods.
I agree. I like to be overly pessimistic in my estimates and be happily surprised with the reality.

Sent from my SM-G900FD using Tapatalk
 
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Great thread! If was young, single and didn't have kids, I would be all over this.
@IGP , I am neither young, single or child free. But it works for me.
 

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@GlobalWealth won't that possibly hurt your AirBnB ratings? I usually see most "Superhosts" and high rating listings go overboard with the welcoming.

Maybe add a gift & handwritten card (your cleaners can leave it for you)? A bottle of wine or something. That sort of stuff is always mentioned in the highest ratings listings.

I love automating stuff too, but I'd still have someone close-by in case the locks malfunction (what happens if the powergrid goes down?)
 

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