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Live Rent Free in Multiple Countries

GlobalWealth

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Actually, @GlobalWealth had a property in Medellin - he should be able to chime in here.

I was thinking about buying there as their property market seems to be booming. If you're seriously interested I can connect you with a friend of mine who is in the RE industry in Medellin.

You need to be wiling to pay all cash, as I'm pretty sure Foreigners cannot get financing there.

If buying in Medellin, look for a place that has a hotel license. Daily rentals should ROI a bit better than buildings that don't allow short term rentals.
Good point.

This is an all cash marketplace.

As a foreigner you will never get any mortgage.


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ericaung

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Thailand:
Foreigners can have 100% ownership of condos.

I have a friend who lives and owns a real estate company on Koh Samui and his clients set up a limited corporation with a Thai owning 51% and the foreigner 49%. The trick is the foreigner has voting shares and the Thai no voting shares. Therefore, the foreigner controls the land, house, etc...

All of this can change tomorrow... After all it is SE Asia....


Yes, it is true. Even airbnb is illegal in some SE Asian countries. non-US person can buy properties in Europe?
 

GlobalWealth

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Yes, it is true. Even airbnb is illegal in some SE Asian countries. non-US person can buy properties in Europe?
Yes, no problem with foreign ownership in Europe.

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GlobalWealth

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Any updates on emerging markets?
Looks like Medellin and Lisbon has grown a lot and most likely too late to invest now.
What do you think of Argentina / Buenos Aires?
I owned a place in Medellin and sold it about 1.5 years ago for a nice profit.

I've shipped in Lisbon but that's a difficult market as local Portuguese rarely sell their good properties that have been in the family 3 generations. Just my opinion.

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Ocean Man

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Very interesting @GlobalWealth. Sucks that here in South Korea, it's extremely, if not, impossible for foreigners to own a place. I was thinking of sub-leasing, however, South Korea is extremely strict on visa's and if I sub-lease on a Tourist Visa, I could get deported.
 

JamesQB8

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After reading @G_Alexander post here - GOLD! - STOP Paying Rent: Live For Free - 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.

I was seriously considering this and buying a 1/2br in Medellin Colombia, However how did you find all the paperwork and legal considerations for purchasing property. A lot of people have been ripped off in the contract process.

Do you currently own any property in Colombia?
 
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Angal Faria

New Contributor
May 1, 2019
34
18
Dubai
Hey, Global, excellent strategy. Hope it may be helpful for those people who continue their business living in multiple countries. Like me, I am a real estate broker, and my business was UAE, USA, UK, and so more countries. I have three houses in a different zone of the UAE and two in the USA. But in the UK I have no house, and twenty agents see my business there. So now I think to buy a home in the UK for business purposes.
 

tommichael

New Contributor
Mar 13, 2019
5
2
dellin for investment? Looking at a few 3BR properties in the laureles/pablado
After reading @G_Alexander post here - GOLD! - STOP Paying Rent: Live For Free - 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.
Dear GlobalWealth,

Amazing article you wrote here. Based in Europe I am a real estate investor on my own but never had the guts to invest outside my home country. As ROI's have come down significantly due to dramatic increases in property prices here I start considering to go international. Two of my favorite destinations where I have stayed already and where I could imagine to buy are Medellin or Bangkok. My biggest concern when investing abroad in Emerging Markets is political risk (e.g. dispossession of one's property by government). What are your thoughts about political risk and how to you integrate this factor in your decision making process?

Best wishes,
Tom
 
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lunga ngcobo

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Mar 29, 2019
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After reading @G_Alexander post here - GOLD! - STOP Paying Rent: Live For Free - 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.
You have nailed it dude... Ive been thinking of how i would make it possible for me to travel the world cost free. And this thread nails it.

Im also into property rental business which is even better. F*ck year... im definitely implementing this strategy... Thanks for the advice bro!!! ;) ;) ;)
 

GlobalWealth

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I was seriously considering this and buying a 1/2br in Medellin Colombia, However how did you find all the paperwork and legal considerations for purchasing property. A lot of people have been ripped off in the contract process.

Do you currently own any property in Colombia?

You can find the answer above.

In Colombia, just make sure you have a good real estate agent and good lawyer.
 

GlobalWealth

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Dear GlobalWealth,

Amazing article you wrote here. Based in Europe I am a real estate investor on my own but never had the guts to invest outside my home country. As ROI's have come down significantly due to dramatic increases in property prices here I start considering to go international. Two of my favorite destinations where I have stayed already and where I could imagine to buy are Medellin or Bangkok. My biggest concern when investing abroad in Emerging Markets is political risk (e.g. dispossession of one's property by government). What are your thoughts about political risk and how to you integrate this factor in your decision making process?

Best wishes,
Tom

I wouldn't invest if there was any political risk. Thailand is practically impossible as a foreigner but Colombia is easy.
 
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MTF

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Question, @GlobalWealth: how important of a factor for you are the local regulations regarding vacation rentals?

In some countries the level of the pain in the a$$ is incredible. I recently researched the Canary Islands and learned about the high property taxes and rental income taxes as well as having to apply for a license, which is a bureaucratic nightmare carrying a risk that you won't even be able to rent your place if the government doesn't feel like giving it to you.

Do you generally avoid such places or hire a local expert and let this person deal with all this stuff as long as you can find a decent opportunity?
 

FierceRacoon

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Jun 1, 2019
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Ukraine has good investment opportunities, so I was told, due to the crisis. I know some Ukrainian people who are taking advantage of it. But they are essentially betting on the country's future, that the economy will recover and the properties will appreciate 10X.

It's really a big deal if you live there, though. Can be an opportunity of a lifetime, particularly for buying land as opposed to a house: Ukrainian lawmakers vote to lift ban on sale of farmland by 2020
 
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Last edited:
D

Deleted78083

Guest
I understand the strategy, but I wouldn't do it this way, and certainly not with Airbnb. The thing about Airbnb is that you make more money per night, but you don't rent every night either and at the end of the month, the difference between a long-term tenant and a short-term tenant is minimal, but the hours invested aren't. I was reading that many airbnb landlords in Paris were disappointed with Airbnb and switched back to long-term rentals. So, here's what I'd do instead:

I'd buy a 4 bedrooms apartment, would rent out three rooms and keep one empty for myself. Why? Because a three rooms apartment is not enough, the 2 rooms rent you will make won't cover your loan. A 4 bedrooms apartment is perfect though because you will make enough with rents to cover the loan and you'll probably even make a bit of pocket money off it. Also you'll be able to rent the place for a slightly higher price because you'll have three people living in a 4 people space most of the time (when you're not there). Your tenants will take care of the apartment for you and if you trust them (and you better if they'll pay you money each month), they'll water the plants and open your mail. Also, big apartments are today cheaper per m2 because there is less demand due to people having smaller families or being single.

Let's make some maths. I can buy in Brussels a 4 bedrooms apartment for more or less 380 000€. Let's admit I borrow 95% (the maximum) to buy the apartment at a 5% rate and that I take a 30-year loan.

380 000*0.95= 361 000 is what I borrow. With the 5% loan, that makes 379 050 that I need to refund over a period of 30 years, which makes 360 monthly payments: 379 050/360 payments = 1 052€ a month. Since I can easily rent the three bedrooms for 450€ (excluding water, gaz, internet etc), that makes me 1350€ of rent per month. 1350-1052 = 298€ of free cash per month, 3576€ per year. A part of it will have to go for insurance, and the other, for taxes. And that's how I can live rent free in Brussels, or in any city I want!

We can make a similar calculation with a 5 bedrooms apartment I have just spotted for 465 000.

465 000*0.95= 441 750 that I borrow. 441 750*1.05 of loan interest=463 837. If the loan is spread over 30 years, that's 463 837/360= 1 288 per month. Here, I'd probably rent a bit cheaper, like 430€/month, that's 430*4 bedrooms= 1720€/month. 1720-1288 = 432€ of free cash per month. Over a year, that's 432*12=5 184, minus taxes and insurance. And voila!

All you need to do is see if you can rent out the room for more money than the cost of your loan. If a three bedrooms apartment costs 300 000€ and you rent out two rooms, that's 150 000€ (admitting we borrow 100% here) per room to refund over 30 years, which makes 416€. If you rent out for 450€ net, that works, but the earning you make is quite small.

To make it as efficient as possible, you should maximize the number of bedrooms for a minimum m2 price. With a bit of research, you can uncover real gems and managed to get paid...to live in your own place.

When I living in Melbourne, I had visited a house where you had 20 backpackers living there, each paying about 200 AUD a week, if my memory is correct. When I asked the owner what his job was, he said he didn't have any.
 

Eddie E

New Contributor
Jan 3, 2019
13
13
I understand the strategy, but I wouldn't do it this way, and certainly not with Airbnb. The thing about Airbnb is that you make more money per night, but you don't rent every night either and at the end of the month, the difference between a long-term tenant and a short-term tenant is minimal, but the hours invested aren't. I was reading that many airbnb landlords in Paris were disappointed with Airbnb and switched back to long-term rentals. So, here's what I'd do instead:

I'd buy a 4 bedrooms apartment, would rent out three rooms and keep one empty for myself. Why? Because a three rooms apartment is not enough, the 2 rooms rent you will make won't cover your loan. A 4 bedrooms apartment is perfect though because you will make enough with rents to cover the loan and you'll probably even make a bit of pocket money off it. Also you'll be able to rent the place for a slightly higher price because you'll have three people living in a 4 people space most of the time (when you're not there). Your tenants will take care of the apartment for you and if you trust them (and you better if they'll pay you money each month), they'll water the plants and open your mail. Also, big apartments are today cheaper per m2 because there is less demand due to people having smaller families or being single.

Let's make some maths. I can buy in Brussels a 4 bedrooms apartment for more or less 380 000€. Let's admit I borrow 95% (the maximum) to buy the apartment at a 5% rate and that I take a 30-year loan.

380 000*0.95= 361 000 is what I borrow. With the 5% loan, that makes 379 050 that I need to refund over a period of 30 years, which makes 360 monthly payments: 379 050/360 payments = 1 052€ a month. Since I can easily rent the three bedrooms for 450€ (excluding water, gaz, internet etc), that makes me 1350€ of rent per month. 1350-1052 = 298€ of free cash per month, 3576€ per year. A part of it will have to go for insurance, and the other, for taxes. And that's how I can live rent free in Brussels, or in any city I want!

We can make a similar calculation with a 5 bedrooms apartment I have just spotted for 465 000.

465 000*0.95= 441 750 that I borrow. 441 750*1.05 of loan interest=463 837. If the loan is spread over 30 years, that's 463 837/360= 1 288 per month. Here, I'd probably rent a bit cheaper, like 430€/month, that's 430*4 bedrooms= 1720€/month. 1720-1288 = 432€ of free cash per month. Over a year, that's 432*12=5 184, minus taxes and insurance. And voila!

All you need to do is see if you can rent out the room for more money than the cost of your loan. If a three bedrooms apartment costs 300 000€ and you rent out two rooms, that's 150 000€ (admitting we borrow 100% here) per room to refund over 30 years, which makes 416€. If you rent out for 450€ net, that works, but the earning you make is quite small.

To make it as efficient as possible, you should maximize the number of bedrooms for a minimum m2 price. With a bit of research, you can uncover real gems and managed to get paid...to live in your own place.

When I living in Melbourne, I had visited a house where you had 20 backpackers living there, each paying about 200 AUD a week, if my memory is correct. When I asked the owner what his job was, he said he didn't have any.
So this in reality is a house hack strategy?
It might be a good strategy if you lived in the property full time and the tenants payed down your mortgage for you and you live for free basically minus bills and maintenance maybe. But not too sure how it would work long distance if your not going to spend much time there and travel the world.
How long would you be staying at the property? If only a few weeks per year would it not feel weird landing and staying in your apartment with people you don’t really know who live there full time? Could you not just rent the last room for your 450 pm that’s €5,400py you could travel the world with and spend as you want on nice hotels or apartments and live I comfort on your own, I know I would.
Also I’ve lived in Sydney before with backpackers in a house It was crazy lol I definitely wouldn’t want to do that again.
 
D

Deleted78083

Guest
If only a few weeks per year would it not feel weird landing and staying in your apartment with people you don’t really know who live there full time?

From this, I can see you don't have much experience living with roommates...I've lived in 6 different countries on three continents, always with "random people". The apartment I'm living in at the moment is my 18th shared house. So yeah, I don't see what is wrong with my strategy. If i live with people (and I wouldn't want to live alone), I'd rather have them paying me rent than paying the landlord.
 
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MTF

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I'd buy a 4 bedrooms apartment, would rent out three rooms and keep one empty for myself.

You're missing the point of this strategy. The point is to have a nice place where you can hang out and rent it while you're not there. What's the point of having a 4-bedroom apartment and sharing your apartment with other people as if you were a broke-a$$ student? IMO this doesn't make sense as long as you have the entire place for yourself and just rent it whenever you're not there. Maximum ROI is not necessarily the main goal here; lifestyle optimization is.
 
D

Deleted78083

Guest
You're missing the point of this strategy. The point is to have a nice place where you can hang out and rent it while you're not there. What's the point of having a 4-bedroom apartment and sharing your apartment with other people as if you were a broke-a$$ student? IMO this doesn't make sense as long as you have the entire place for yourself and just rent it whenever you're not there. Maximum ROI is not necessarily the main goal here; lifestyle optimization is.

As i said, i wouldn't want to live alone and find the strategy of renting out rooms long-term much simpler, cost effective, time effective and much safer too. I used to know this girl, her job was to take care of one airbnb apartment. One. Full-time. Ofc, it wasn't a sh*tt 20 bucks a night place, but i think one underestimates the time it takes to do airbnb as well as the marginal benefit.
 

MTF

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i think one underestimates the time it takes to do airbnb as well as the marginal benefit

That's why hiring a property manager needs to be included in your calculations (and was mentioned throughout the thread).
 
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JasonR

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I'm thinking of doing this in Scottsdale, AZ but I'm waiting for the RE market to collapse a bit.

This whole pandemic has me valuing owning a place of my own. Tired of bouncing around at AIR BNBs at the moment
 

Eddie E

New Contributor
Jan 3, 2019
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From this, I can see you don't have much experience living with roommates...I've lived in 6 different countries on three continents, always with "random people". The apartment I'm living in at the moment is my 18th shared house. So yeah, I don't see what is wrong with my strategy. If i live with people (and I wouldn't want to live alone), I'd rather have them paying me rent than paying the landlord.
I’ve I bit of experience lived in 5 countries on 3 continents. nothing wrong with your strategy many people do it, I just found living with roommates very cumbersome sometimes, roommates come and go and you have to find new ones these things happen even in the nicest appartements.
me personally I didn’t always like living with new people just to fill a room for rent fast.
Don’t get me wrong I love the strategy and will likely do something like this in the future when I stop traveling and Settle somewhere but I would only do if I lived there full time.
if I buy a holiday let it would be just that for short term rental and just let a manager deal with it and I just stay there when I want with people I want. Simple
 

Majy

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Apr 4, 2021
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I live in Serbia and my parents have a side gig with real-estate.
I personally don't know the prices of the properties, I reckon a single room apartment is around 50k in Belgrade, but what I can offer as advice is that the only places of interest are small apartments in Belgrade, Novi Sad, Nis, and maybe a few other cities. A lot of people from smaller towns come there to study, so a small apartment near a decent college is what you're aiming for. Also, If I recall correctly, the rent is around 500 euros.
If anyone has questions, ask away.
Are you interested in maldives ?
 
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gpetukhov

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Oct 24, 2022
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london , ontario
an interesting mix of places you suggest here. Albania i've heard a lot about recently as well.

When you talk about return on cash - unlike most real estate investors in the US, who look at cash-on-cash return and rely on a mortgage, here you are talking about making an outright purchase! That really means a remarkable return if you can get a mortgage.
Yes - but higher mortgage rates and higher down payment requirements decreases COC return
 

gpetukhov

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Oct 24, 2022
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london , ontario
Absolutely brilliant thread @GlobalWealth. Reps given!

This is the direction I've been wanting to move in for a few years now - this thread really resonates with me. I've been looking at Montenegro, Panama and New Zealand. NZ is a long term plan (buy a farm there for some income diversity, set it up as high-end farmstay accommodation for additional income when I'm not around).

Panama is slipping from my "to buy" list though as it's damn expensive for what it is. Buying an apartment in Panama City could be the pay off of the century if the place does turn into a Central American Singapore, but as it stands prices are ridiculous for the standard of the country (opinion only).

I'm looking for somewhere slightly warmer for when I'm over the mountain Winters, hence Montenegro. Lots to learn and my fear steps in before I get too serious, but this is the year for massive change. If I take a trip to that part of the world, do you recommend checking out Croatia too, anywhere else in the region? I'm not expecting you to do the research for me, just interested in areas to begin looking.
Would recommend Montenegro - has seen crazy appreciation plus very tax friendly locale
 

polaroid22

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Oct 26, 2021
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Looks like prices in Ukraine just kept rising. I thought to myself maybe there are some amazing deals over there atm.

Looked into it some more ==> there’s no lending here, there are no mortgages. And so, as a result, one, the market has a lot of potential to appreciate in value if there was lending. But also, no one has holding costs, no one has mortgage payments to make every month. And as a result, there’s not a strong desire for people to sell their properties, especially individual residential properties, at a significant loss or substantially lower than the market was priced before the current situation. So we’re not seeing a ton of great individual residential deals.
 
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EmperorPear

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I live in Serbia and my parents have a side gig with real-estate.
I personally don't know the prices of the properties, I reckon a single room apartment is around 50k in Belgrade, but what I can offer as advice is that the only places of interest are small apartments in Belgrade, Novi Sad, Nis, and maybe a few other cities. A lot of people from smaller towns come there to study, so a small apartment near a decent college is what you're aiming for. Also, If I recall correctly, the rent is around 500 euros.
If anyone has questions, ask away.
Hello, me again. Here to bring my previous post up to date. The prices are skyrocketing, as you might expect.
Eight years ago, I said in the quoted post of mine that the main target audience are students. Now, one must add in the factor of many Russians and some Ukranians fleeing the war here, and the prices adjusting accordingly. These aren't your regular refugees seeking asylum like the 2016 wave from Syria, these are Russians capable of leasing out good apartments who are either fleeing the draft, or seeking to live and work in a country that doesn't impose sanctions on their country. The main cities of interest seem to be Belgrade and Novi Sad, which have a continued increase in price. Other cities aren't so stable.
A studio apartment previously went for $50k, now you can expect at least a 1.5x increase in price (I see similar studios being sold for $70-100k). As for the rent, it has also experienced a similar increase in price (although I keep my rent more than fair towards the students that lease out my units).
I want to correct my previous statement of the rent being 500 euros for a small studio apartment. It was 250. 500 was the total amount I was raking in. Now, the rent could be expected to go up to 500, depending on the location. Larger units, I've seen go up to 1000 euros, and the deluxe ones for up to 3000.
In conclusion, the expected increase in price from inflation has been boosted by the war in Ukraine. Anyone who obtained an apartment back when I wrote this post, even through a mortgage, is in the green. Right now, though, I'd only suggest Novi Sad and Belgrade in decent locations close to the center, although it is not a cheap investment anymore. Double your budget, and you can get a studio in Rome, which will always be a good place to rent out.
 

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