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Npl9

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Is there a big language barrier with all of this? Is it possible to do this in a country where you don't know the language?
 
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Is there a big language barrier with all of this? Is it possible to do this in a country where you don't know the language?
Depends on country. In Latin America, I suggest learning Spanish. You can survive, but it will help.

In southern Europe, it would help to learn some local language, but less critical than Latin America.

In Eastern Europe (my preference ) everyone speaks English fairly well. You may run into a plumber or electrician who isn't fluent but I've never had issues.

For me Language would never be a barrier though.
 
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Is there a big language barrier with all of this? Is it possible to do this in a country where you don't know the language?
@Npl9. I wouldn't hesitate to fly into Budapest for 2 weeks to make a deal. And I don't speak a word of Hungarian.
 

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Voice to text + google translate = travel!
 
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Global - you aren't getting enough likes for the massive value - Rep$ sent.
@Get Right , it is a niche topic. Many people have not interest in this. And many don't think it is achievable as it sounds to outlandish. I can tell you that it is not that hard for someone who has a location independent business and a little cash.
 

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The one on your site ... Just like the lady you talked about : Big house by herself
 

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Bila

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( post deleted ) A bit Too much personal info for a public forum
 
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Global, thanks for the wealth of information that you already posted.

There's 3 questions that keep brewing up reading this tread.

1. Out of my own - limited - experience with renting out RE I know how important it is to have good property management.

On top of that this is the way to scale.

You mentioned that in almost every case you appoint a property manager for your rentals and I'm wondering how do you attract them? Especially since you seem to be active in various countries and markets. Do you attract professional property managers or do you just hire someone by putting an ad somewhere? What tasks do they take out of your hands?

2. I presume 20 nights pm per apartment requires a lot of back and forth emailing with possible renters. Do you handle that yourself, could you outsource this to a property manager or are you hiring a VA to do that for you?

3. In your spreadsheet example there's a loan on the books, increasing your leverage and ROI.

I'm wondering what the bank wanted as collateral for the loan. Is that purely the property as in Loan To Value loan or did they also need proof of your income or was the collateral both the property AND your income?

Thanks for your answers!
 
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Great post! I am looking into adding short-term vacation rentals to my portfolio, but only looking in the US so far. I am curious about your 15% operating expenses line item. Are you including utilities in that figure? It seems a bit low to me if you include all utilities (water/trash, gas, electric, internet/tv) as well as property taxes and insurance, not to mention regular maintenance and deferred maintenance on eventual big ticket items (furnace/ac, roof, water heater, etc). I do realize you are talking about houses outside the US so you might have fewer amenities? (no internet/tv, ac, etc) and repair costs may be cheaper as well. I reserve 10% yearly for maintenance alone on my rentals and people say that is low. Another cost to consider is the initial furnishings and decorations, as the house needs to be fully furnished and looking good. Also lawn care/snow removal if applicable.

I have included an example of a property I am looking at with overly conservative numbers imo, but similar gross rent and half your purchase price but very similar return:
vacay.png

I may be way overestimating and being too conservative, but I like to play it safe with my houses. ;)
 

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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.
 

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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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1. Out of my own - limited - experience with renting out RE I know how important it is to have good property management.

On top of that this is the way to scale.

You mentioned that in almost every case you appoint a property manager for your rentals and I'm wondering how do you attract them? Especially since you seem to be active in various countries and markets. Do you attract professional property managers or do you just hire someone by putting an ad somewhere? What tasks do they take out of your hands?
Yes, the pm is very, very important. My pm in one location is great. She is my 2nd one. The first one was ok, but not great. I upgraded. She was a friend of a friend and was used to working outside of an office environment.

You can also use real estate agencies in those towns too. Many are used to working with short term rentals.

My pm handles everything. All communication with guests, check in and out, cleaning, buying supplies, dealing with plumber/electrician/etc.

2. I presume 20 nights pm per apartment requires a lot of back and forth emailing with possible renters. Do you handle that yourself, could you outsource this to a property manager or are you hiring a VA to do that for you?
My pm does it all. I am completely out of the loop in communication.

3. In your spreadsheet example there's a loan on the books, increasing your leverage and ROI.

I'm wondering what the bank wanted as collateral for the loan. Is that purely the property as in Loan To Value loan or did they also need proof of your income or was the collateral both the property AND your income?
On this property I got a mortgage with 30% down. I showed them my bank and brokerage statements and my last year tax return from US. I also put down 30% which further minimized their risk. Showing my financial position just showed that I had the ability to pay. They didn't blink an eye. No issue. But no collateral aside from the property itself.
 
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Great post! I am looking into adding short-term vacation rentals to my portfolio, but only looking in the US so far. I am curious about your 15% operating expenses line item. Are you including utilities in that figure? It seems a bit low to me if you include all utilities (water/trash, gas, electric, internet/tv) as well as property taxes and insurance, not to mention regular maintenance and deferred maintenance on eventual big ticket items (furnace/ac, roof, water heater, etc). I do realize you are talking about houses outside the US so you might have fewer amenities? (no internet/tv, ac, etc) and repair costs may be cheaper as well. I reserve 10% yearly for maintenance alone on my rentals and people say that is low. Another cost to consider is the initial furnishings and decorations, as the house needs to be fully furnished and looking good. Also lawn care/snow removal if applicable.
You are comparing apples to oranges. For example, my property tax is less than .2% of assessed value. WAY lower than in the US. Secondly, I only do apartments, so no exterior maintenance issues whatsover. My insurance costs are less than $15/month. My "hoa" includes trash and cam and runs about $40/m (very cheap). My utilities are water, heat, and internet. No tv's in any of my apartments, only internet (who goes on vacation to watch tv?). I do consider deferred maintenance, but it is much lower where I own property and apartments are much lower as well.

Of course, you need to consider your expenses based on location.

Personally I would never consider a house. Too many variables to go wrong with me on the other side of the world.
 
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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.
I would never consider Germany. Go back and reread my original post. For me, I want low cost of living areas that attract tourists. Germany is high cost of living. That means less outside tourism.

But a German would spend a lot of money on vacation in Croatia (low cost of living) because his money goes much further there.

I wouldn't consider any of the expensive countries to invest in because of this. Also they are already expensive.

For example, in Munich you are looking at a minimum of eur4000/m2 in purchase cost. In Latvia I can buy for less than eur2000/m2. But the nightly rental rates are not much different and you get a lot more travelers visiting Riga than Munich in relative terms.

I am only considering the yield. Less upfront cost + same income = greater profits.
 
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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.)
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?
 

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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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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. ;-)
Are you getting on the members webinar in 1h? If so, I would love your input or questions.
 

masterneme

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What do you think about Romania? Low expenses and one of the top Internet connections in the world.
 
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What do you think about Romania? Low expenses and one of the top Internet connections in the world.
I haven't researched it but cost of living is quite low. Would need to see how much tourist traffic it brings. Would probably only consider Bucharest though.
 

Jill

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Are you getting on the members webinar in 1h? If so, I would love your input or questions.
Yes, I am. But I will be on the client site. (i.e. at work!) So I probably will not be able to participate. Will you have a "chat" set up somewhere for questions? (I've never used that webinar utility before.)​
 

Bila

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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. ;-)
You are one smart cookie ;)
 

Dark Water

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I would never consider Germany. Go back and reread my original post. For me, I want low cost of living areas that attract tourists. Germany is high cost of living. That means less outside tourism.

But a German would spend a lot of money on vacation in Croatia (low cost of living) because his money goes much further there.

I wouldn't consider any of the expensive countries to invest in because of this. Also they are already expensive.

For example, in Munich you are looking at a minimum of eur4000/m2 in purchase cost. In Latvia I can buy for less than eur2000/m2. But the nightly rental rates are not much different and you get a lot more travelers visiting Riga than Munich in relative terms.

I am only considering the yield. Less upfront cost + same income = greater profits.
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.
 

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