Live Rent Free in Multiple Countries

[GlobalWealth]

@GlobalWealth, have you heard about anyone investing in houses in more secluded places to appeal to a different type of a tourist? Do you think it could work or is it crucial to get a place in a central location?

Also, what is your process of looking for a property manager? Do you just go to the top real estate companies and ask? I guess it's key to find somebody you can trust as you can't really control what's happening on a daily basis and a few bad reviews can ruin your profile on Airbnb.

And just curious: do you offer welcome baskets to guests? As a guest, I always think it's a nice touch (and actually started expecting it in each place) but it obviously adds to expenses, plus somebody has to go to the store and buy it.

I have seen remote vacation properties for short term rental. I am sure it can be done but just like in any real estate investment - location is critically important. If you find some property that gets a lot of tourists but remote I am sure it can work.

As for pm's. You do whatever it takes to find someone you trust. That is key. Ask around with locals. Meet some real estate agents. Stay at some airbnbs and talk to other owners. It requires work. No real formula here.

We don't really do baskets but we do leave the place stock with some food essentials like coffee, tea, condiments, etc.

@GlobalWealth, have you heard about anyone investing in houses in more secluded places to appeal to a different type of a tourist? Do you think it could work or is it crucial to get a place in a central location?

Also, what is your process of looking for a property manager? Do you just go to the top real estate companies and ask? I guess it's key to find somebody you can trust as you can't really control what's happening on a daily basis and a few bad reviews can ruin your profile on Airbnb.

And just curious: do you offer welcome baskets to guests? As a guest, I always think it's a nice touch (and actually started expecting it in each place) but it obviously adds to expenses, plus somebody has to go to the store and buy it.

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[GlobalWealth]

@GlobalWealth LOVE this idea! Thank you so much for this post.

I'm from the UK, and have been travelling all over Europe also, learned Spanish, living the laptop lifestyle! However I've been the one renting AirBnbs in different cities from different landlords, and I've seen first hand how crazy the prices can command in different tourist cities.

Even though I'm a single dude and love travelling, I run an information publishing business and create course content / videos. That is my fastlane business where I've generated my capital so far, but I have to admit it's difficult to remain consistent while always on the move, without fundamentals in place.

In travelling so much and experiencing the world, I've still really felt a lack of "structure". Sometimes pieces of paper going missing in transit, even equipment going missing which packing my stuff last minute before a flight, which is not great foundations for building a solid business. So I guess you could amend this strategy how you see fit.

For example, even though I can't stand the climate most of the year, buy a small apartment in my home country in UK in the least expensive way possible where my business is registered, where I speak the language fluently and mum are based. Not for the purpose of renting out, but as the ultra "fail safe" with minimum mortgage possible. Use it as a base with minimal overheads to generate maximum cash flow and start investing overseas, even if it's vacant most of the year.

For example, places like Nottinghamshire, Southampton etc you can buy an apartment for £70k, and still be able to commute to visit family + friends.

Have you considered doing something like this? Or are you perpetually on the move? I've also totally had enough of 6 months blustery winters in the UK, but there's something nice about having something in my home country for the added security and sturdy foundations in a stable market.

I have a home base in Europe where I spend a good amount of time.

I do not rent this one out, for now. However, I am about to rent a new apartment to live in and make my current home a short term rental.

In this market it is much cheaper to rent than to buy. For example, I looked at a new apartment yesterday that I may move to. It's 100m2, 2br/2ba penthouse with a terrace and floor to ceiling windows. It's a brand new renovation. They want €550/m plus utilities for rent, or to buy it would cost €250,000. I'd be crazy to buy at this price.

I have added 2 units this year and about to add 1-2 more (including my current home mentioned above) before the end of the year.



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[JasonR]

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.

 

[GlobalWealth]

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.

@TedM it is possible to get reasonable mortgages. Just a bit more complicated. But certainly doable.

 

[GlobalWealth]

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.

I love Belgrada and Novi Sad. Both great cities.

 

[GlobalWealth]

I think it's a great strategy to beat the " asset rich, cash poor" syndrome that comes with real estate investing usually as you are more cash flow positive .

Just to be clear, this is not what I would consider a fastlane plane.

It is a way to diversify your assets, earn some mostly passive income and live rent free around the world.

If anyone is interested I can post one of the income statements from a property to show actual numbers.

 

[TedM]

If anyone is interested I can post one of the income statements from a property to show actual numbers.

I'm interested in everything you share. You bring great value to this forum (especially since I live in EMEA - it's nice to hear from people on this side of the "pond" also.)

 

[M&A]

I have been considering real estate for a while now, do you think that using short term rentals (air bnb) is more profitable than traditional yearly leases with contracts ?

Id be more interested in buying an apartment building in a foreign country but I don't want headache of dealing with tenants, who's paying rent, maintenance. I just want to get the wire transfers

I lived in the Czech Republic for a year and rented an apartment, turns out the guy is from Italy and owns 20 buildings with about 20 apartments each so about $300,000 a month gross. Turns out a lot of the real estate is owned by foreigners in Europe all making big bank.

Is it possible to get a loan with a bank in your own country to purchase property abroad ?

 

[Jill]

I have been considering real estate for a while now, do you think that using short term rentals (air bnb) is more profitable than traditional yearly leases with contracts ?

M&A, GW is definitely the expert on this one. But in the cursory review I did this morning of the Numbeo site he references in an earlier post, I see a lot of properties that rent for an average of $2-300/month. But if you look on airBnB, similar properties rent for $50-60/nt. So in those markets, you would definitely be better off with short-term rentals. That also frees it up for your own use, should you desire that. Like anything in this arena, it will just take some due diligence to slice and dice the numbers.

 

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[GlobalWealth]

Is 50% a realistic occupancy rate ?

If you read my earlier posts, I am getting more than a 50% occupancy rate year round. If you read my opening post, you will see I am very thorough in selecting the location though as it makes a huge difference.

For example, in Prague. If you buy something that is within a 10m walk of those bridges where all the tourists congregate (I forgot the name), you will do exponentially better than if you are just another 20m walk away.

Tourists love being in the center and are willing to pay a premium for their short term stays.

I have a friend who was renting an apartment in Prague (she didn't own it in any way, just a rolling 12 month lease), over the summer when she went back home from college she did airbnb and got about $800 a week for her place to summer tourists. But she was only paying $600 a month in rent

I will give you an even crazier scenario. In most of your former Soviet bloc countries the type of ownership varies greatly due to the USSR occupancy and historical and complicated land records. In some cases you can own a building (or apartment in a building) but not the land underneath and have a land lease to pay annually. Conversely, you can own the land but not the building and everyone must pay you a land lease.

In some cases, people were granted 50-100 year leases by the government as compensation post Soviet Union. They don't own the apartment, but they have use, free and clear, until the lease runs out. That could mean there are another 30-80 years left on the lease.

I have seen these leases selling for less than eur10,000. Of course you don't own the property and must give it up in 30-80 years, but you can renovate and rent out for eur60-80/night. Do THAT math.

Im sure this is illegal but just goes to show the profits involved in short term rentals.

I don't know about in Czech, but here it is quite common to do a long term lease and rent short term. I have one friend here who found 20 apartments in one building owned by the bank. The bank didn't want to sell them because the market was too low and selling them would mean they had to write down asset values for their other foreclosed properties.

The bank also didn't want to be in the rental business, so my friend made a deal to rent them long term (1 year renewable leases) with no limitations on what he does with them. He did some cosmetic repairs and rents them out for around eur30-40/night. He basically runs it like a small hotel.

 

[GlobalWealth]

Just a follow up, we published this article yesterday on the same topic. It adds some perspective to this thread for those interested.

http://www.globalwealthprotection.com/become-an-offshore-real-estate-mogul-and-live-for-free/

 

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[Get Right]

Global - you aren't getting enough likes for the massive value - Rep$ sent.

 

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[GlobalWealth]

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.

 

[Choate]

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.

 

[GuestUser140]

I have a friend who was renting an apartment in Prague (she didn't own it in any way, just a rolling 12 month lease), over the summer when she went back home from college she did airbnb and got about $800 a week for her place to summer tourists. But she was only paying $600 a month in rent .

Im sure this is illegal but just goes to show the profits involved in short term rentals.

I don't know about in Czech, but here it is quite common to do a long term lease and rent short term

Has anyone looked further into this?

I've been comparing Airbnb's rates to long term rentals in Eastern-Europe.

Interesting stuff.

Pay 3-500/month for a good location, you won't need a high occupancy rate to be profitable.

And you can still live there when you want.

Providing it's allowed in the lease you sign, why not rent an apt. for a year instead of buying it?

Reduces capital exposure. With market experience, you could sign 30 leases instead of owning 3 apts.
What's the ROI on that?

It's like going to a flea market where few people are internet savvy and then reselling on eBay for a large profit, but with real estate rentals.

What am I missing?

 

[HyperFocus]

@GlobalWealth ...what do you think of Spain ( South ) as an investment right now ? i am seeing crazy prices ( a 2 bedroom, 5mn from the beach for 45 000 EUROS !!) .and it makes it very appealing

Spain is a great place. South near Malaga (South of Malaga). If its under 100k.
But I suggest Madrid or Barcelona because it will be easier to rent out.

The prices are growing tho, so be fast

Ukraine and Greece are also still good investments.

 

[GlobalWealth]

I like your idea and I have some friends who yield 15-20% by using Airbnb while still living in the apartment.

I would like to see the REAL numbers to prove 15-20%. Not saying it is impossible, but highly unlikely. I have seen how people measure their return and unless they know what they are doing, they frequently leave out some expenses thus skewing the results.

I have seen airbnb owners who rent a room in their house/flat. I have also seen where people rent their place and just go to a friend's place while their guests are there. Personally I think those are both bad options, but that is my personal preference as both a guest and a host.

I don't want to share the space with either a guest or a host. Nor would l like the idea of being kicked out of my home on short notice.

But I dont understand your connection to living for free. Its not free as you cant rent it out then. Its also much easier to just rent wherever u want to live.

You are missing the point. It seems you are reading this from your personal frame of reference.

Consider this. You own 3 apartments. One in Barcelona. Once in Lisbon. One in Denver.

You plan your life around times in these 3 apartments. Two weeks in Barcelona. Traveling around in Europe for 2 weeks. Two weeks in Lisbon. Traveling around for 2-4 weeks. One month in Denver.

You block off your times in each of the 3 apartments making them unavailable while you are staying there. But you make them available for rent while you are away.

The rental income from your 3 apartments when you are not using them covers the cost of your apartments, all expenses, your personal expenses and travel, plus you earn some additional income from it.

This is the idea behind living rent free in multiple countries. Is that more clear?

 

[GlobalWealth]

@GlobalWealth such a beautiful dream. Expect some PMs in a year or two

@ilrein . It really is not as difficult as you may imagine. Many people on this forum already live the virtual nomad life due to their businesses being location independent.

If you can put a down payment down on a house/apartment in your hometown, you can do the same thing in Barcelona. Like anything else, it starts with just one step.

 

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[GlobalWealth]

My question to you is what percentage of your investments do you have in these apartments?

Let's just say I'm heavily invested and still shopping.

 

[Phones]

While I think rents and property prices are still too high for the living standard of the population here in Lisbon (1 bedroom in a shared house takes half of the minimum wage), the rest is really really cheap.

I just stockpiled my kitchen with 90 EUR, home delivery included: 8 boxes of cereal, 5 packs of cookies, 5Kg of Spaguetti, 1.5 Kg of Bag Fries, 60 Litters of bottled water, 24 litters of milk, 3 frozen pizzas, 1Kg of frozen meatballs, 6 litters of pepsi and some bathroom stuff

Conclusion: it is really that cheap, and my diet sucks

 

[QDF]

@GlobalWealth I recently had the idea of doing the same thing you talk about in the OP within the U.S. by renting several apartments across the country (negotiating permission with the landlords of course), and then renting them out on Airbnb.

I ran the numbers and don't see any reason why it wouldn't work out to where you could have several apartments across the country and not pay a penny for any of them (and more likely make 20-50% annual ROI's with them). After running the numbers, I fully plan on doing this in the near future within the U.S.

I see that you've done this (rented out apartments on Airbnb that you yourself are renting from a landlord), but it seems it's been in other countries so far. Do you have any experience doing so strictly in the U.S.?

Do you have any tips that you would give for negotiating permission from landlords to sublease the apartments? Or any advice for using Airbnb - increasing nightly rates, fill rates, etc. using their platform?

My plan is offer to pay a large (50-100%) of the full 12 month lease upfront as necessary to help gain permission to list the apartments on Airbnb. From there, achieving a nightly rate of 9-10% of the monthly rent/expenses and a 50% fill rate on Airbnb seems doable, leaving rough profit before cleaning services, etc. at about 50% of the monthly rent I'd be paying.

I see other people have mentioned related stuff in this thread too, so I hope it's not repetitive. I guess my question is, if you were to go this route, given your experience and knowledge, what general advice would you give, i.e. how would you approach this starting out?

Thanks so much for the thread btw - no clue how I've missed it before.

 

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[Azure]

I just read through this entire thread, and I wanted to thank you GlobalWealth for openly sharing your knowledge with us. It's an awesome gift.

Do you have an opinion on properties in Tallinn?

I have family in Finland, and they love taking the Ferry from Helsinki to Tallinn. They say it's a little bit sunnier in Tallinn, and the cost of living is much more reasonable over there.

Talinn property prices have gone through a bit of a boom in the last 3 years - its no longer as good of a value as it used to be.

 

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[GlobalWealth]

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....

Ummmm, so in other words foreigners CANNOT have 100% ownership.

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[GlobalWealth]

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]

hmmm. i have 8 kids. i'll need to look for dilapidated-yet-charming castles, i suppose.

One of my better properties is a large 4 bedroom city center apartment.

 

[TedM]

Colombia, Serbia, Portugal, Brazil, Lithuania, Hungary,

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.

 

[Bila]

For this strategy, i would suggest also Morroco ( Marrakech, Tanger)...prices are still reasonable but a lot of hype tourists wise

 

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[TedM]

@TedM it is possible to get reasonable mortgages. Just a bit more complicated. But certainly doable.

intriguing. i need to focus on what i am doing now. i'll get back to this thread at some point. thanks again for enlightening us to what is possible.

 

[GlobalWealth]

Albania i've heard a lot about recently as well.

Albania is super cheap. One of my biz partner's wife is Albanian. I have never been but he loves it there. I would have to research more to see if it attracts enough tourism to be viable for investment though.

 

[Bila]

Airbnb has liability coverage for guests and any damage they may create.

I did not know that, thanks !! Valuable info !
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