Top 10 Best countries to invest in real estate
We’re going to be looking at countries that hold the greatest promise to an American investor.
Had we done this from the standpoint of a European or Japanese investor, the list might look quite a bit different (but then again, maybe it wouldn’t!).
We’re also going to consider several criteria for each selection, the advantages that country specifically holds. It could be geography, climate, culture, economy and finances, investment opportunities, safe haven status in the event of a global meltdown, or the state of the local real estate market.
1. Puerto Rico
Skyline of San Juan, Puerto Rico
We’re getting off on the wrong foot here, right? After all, Puerto Rico is part of the US, and technically not a foreign country. Or maybe not. Yes, Puerto Rico is part of the US, but it’s a territory and not the state. That gives it special status to operate under its own system, while still enjoying many of the benefits of being part of the US.
As a US territory, Puerto Rico enjoys cultural, economic, and financial integration with the US proper. That includes the US postal system, as well as Internet and phone access. Most of the population speak English, and you will have very little difficulty navigating the highway system.
As an independent territory, there are pronounced differences. One of the biggest is on the income tax front. While the maximum tax rate in the US is 39.6% for federal purposes (plus individual state income taxes), Puerto Rico has an income tax of just 4% on earned income.
Puerto Rico is an island country, with the Atlantic Ocean to the north, and the Caribbean Sea to the south. It is thus surrounded by some of the most beautiful tropical beaches in the world, with an average daytime high of 83° in January, and 89° in the summer months.
Median property value on the island is $119,600, which makes it more affordable than many states on the US mainland.
Panama City by Night
Panama has become a haven for expatriates from all over the world, but particularly from the US. Puerto Rico, it’s located in the tropics, it has beaches on both the Caribbean Sea and the Pacific Ocean.
The fact that it has coasts on the two major oceans, and is home to the Panama Canal, making it some of the most strategically located real estate in the world.
Location is important to Panama on other fronts as well. Since the country joins North and South America, it represents a bridge between two major continents. That also makes it a link between the United States and South America. The country has been virtually safe from foreign invasion by virtue of this location.
Panama is the richest country in Latin America per capita income, a situation that is practically guaranteed by its strategic location and by the canal.
These advantages are not lost on American retirees, who have been flocking to the country by the thousands for the past several years, in search of a tropical paradise with a relatively low cost of living so that their American incomes will go farther.
On the real estate front, it’s also worth noting that Panama was largely unaffected by the global real estate meltdown that began 2007. It’s real estate market is at least somewhat insolated by its safe haven status.
Downtown Singapore at night
Asia has been on the forefront of global economic growth for at least the past 20 years. Singapore has benefited from this development in that it represents the gateway to the Asian continent.
A former British colony, Singapore has inherited much of the highly successful British system of law, economics, trade, and finances. For this reason, the country is rapidly becoming the banker nation to much in the Asian market.
Singapore has the fourth highest per capita gross domestic product in the world, and is rapidly becoming one of the leading financial centers in the world, on a par with New York, London, and Tokyo.
Wealthy Asians, and Asian companies, are managing their finances through Singapore banks and brokerage firms. At the same time, non-Asian firms are increasingly doing business in Singaporeas the best way to get a foothold in the Asian market.
From an investment standpoint, Singapore is pricey. That can make it a location primarily for the very well-to-do and the outright wealthy.
However, since the country has attained the status as the safe haven for wealth in Asia, it is ly that money will continue to pour into the island nation at an even greater rate in the event of economic or financial difficulties sweeping the rest of the world.
4. Costa Rica
Aerial view of the city of San Jose, in Costa Rica
Costa Rica is a safe, stable country with a growing economy and a government that is encouraging foreign investment. It enjoys many of the same advantages of Panama, except that it is not as wealthy, and therefore the cost of living is a bit lower.
It’s also attracting a large number of US retirees, and even some non-retirees who are drawn by both low cost of living and the tropical climate.
It is a small but bicoastal nation, that fronts on both the Pacific Ocean in the Caribbean Sea. The weather is among the most pleasant and predictable on the planet, with the consistent year-round high of 81°, and a low of 64°.
The New Economics Foundation ranked Costa Rica first in its Happy Planet Index in both 2009 and in 2012.
You do not have to be a citizen of Costa Rica to own property there, and you will be entitled to the same constitutional protections as a local citizen. It is also not necessary to purchase property through a trust or any other type of legal or corporate shell.
Beach at Punta del Este, Uruguay.
Uruguay has much the same relationship with South America as Panama and Costa Rica do with North America. It is a small but stable country, attracting an increasing number of foreigners and foreign money. In fact, the country is rapidly becoming the international banking center of South America.
Uruguay welcomes foreign investment money, and treats foreigners in much the same way that it does its own citizens. There are no restrictions on foreign ownership of land, nor are the any exchange controls or currency restrictions.
It can also be one of the very best havens in the event of a global economic meltdown. Since it is located in South America – nestled between Brazil to the north and Argentina to the south – it is virtually free of the usual military conflicts that tend to engulf rest of the world.
And since the country is largely agricultural, it’s a place where you could buy productive farmland to wait out a global disturbance.
Downtown of Kuala Lumpur in KLCC district.
Malaysia enjoys at least some of the advantages that Singapore is known for. In fact, geographically it is the peninsula upon which Singapore is mounted. It enjoys a tropical climate, and is surrounded by beaches on both the east and west coasts.
And again Singapore, English is widely spoken in Malaysia, and Western banking customs are typical.
Malaysia’s big advantage over Singapore though is cost. Both the cost of living and real estate prices are significantly lower than what they are in more prosperous Singapore.
That creates more opportunities to find a place to live and to invest in, particularly in the part of the country nearest Singapore.
Montreal over river at sunset with city lights and urban buildings
Not only is Canada similar to the United States to the point of being almost indistinguishable on a day-to-day basis (English-language, English law, time zones, etc.) but it’s also one of the most prosperous countries in the world.
As a supplier nation (oil, food, raw materials) it is less subject to the economic ups and downs than the US and Europe are.
This point is not lost on wealthy internationals, particularly the Chinese. They are flocking to Canada, particularly to the Vancouver area, seeing it as a safe haven from potential troubles at home.
The downside to Canada is the cost of real estate. There are few bargains in high-priced metropolitan areas Toronto and Vancouver. However Canada is a vast country, slightly larger than the US, that provides opportunities to find property in a variety of market areas.
The fact that it’s a well-developed country, and close to the US, means that there are an abundance of suitable places to buy property across the country.
In addition, as a US citizen, your business and career skills are generally readily transferable from the US to Canada to a greater degree than anywhere else.
An aerial view of Mexico City and the Palace of Fine Arts
Though it will be considerably more difficult to earn a living in Mexico than it would be in Canada, Mexico still offers similar advantages to Canada. It’s a bicoastal nation, fronting on both Pacific Ocean in the Caribbean Sea (actually the Gulf of Mexico for the most part).
It is right across the border from the US, and there are thousands of miles of beachfront that could represent real estate investment opportunities. If you can speak Spanish fluently, it could be the perfect country to buy real estate in.
You can buy real estate in Mexico without being a citizen or qualifying as a resident. You must do this through what’s called a fideicomiso, which is something a real estate trust that allows foreigners to own property near either the country’s beaches or borders.
Under it, the trust is the legal owner of the property, and you – as creator of the trust – are its beneficiary and given full control over the property. The trust is established through a Mexican bank and gives you the right to sell, rent or redevelop the property.
Real estate prices in Mexico run the gamut. In some areas property values are comparable to the US, particularly in popular beachfront locations. But in more remote areas, property is relatively inexpensive.
Australia has certain similarities to Canada from a real estate investment standpoint. Everyone speaks English there, and laws and customs are very similar to what they are throughout the English-speaking world.
The country offers a full range of property types, from high-priced urban locations, to inexpensive rural areas. And the entire country surrounded by some of the best beaches in the world.
There are some negatives to Australia however. The country is located thousands of miles from the US, making back and forth travel not only expensive, but also time-consuming.
And being in the southern hemisphere, the seasons are the exact opposite of what they are in North America. It can take some getting used to.
View of Peniscola port Valencia Spain
Up until the property crash in 2007, Spain – and it’s real estate – was booming. It wasn’t merely that the world had suddenly discovered Spain as a good place to own property, but also because the country was making tremendous economic strides. The resulting building boom was evident nationwide, the result of an economic boom that had spread across nearly every industry in the country.
While Spain has seen a major decline in its economic fortunes since the meltdown, many of the basic reasons why you would invest in real estate there still exist. It has some of the finest – and the most extensive – beachfront property in Europe. And it has become a haven for investors throughout Europe.
Ironically, the real estate bust has only made Spain more attractive. Many once high-priced properties are now going for just pennies on the dollar, creating an excellent opportunity not only to find a good place to live, but also excellent investments.
On the downside, Spain is still struggling to come the economic doldrums, and it may be years before there’s a full recovery. If you can wait it out, Spain could represent a once-in-a-lifetime investment opportunity.
Why Rich Americans Are Fleeing To The Caribbean This Winter
Getty Images for The Capri Hotel & NAIA Hamptons
Rich Europeans and Americans are flocking to the Caribbean, but not for the usual winter sun. More and more wealthy individuals are moving for longer periods than usual.
Citizenship advisers, government agencies and real estate developers say they have seen a rapid increase in business over the past few months. Even luxury hotels say they are booking in guests for long-term stays.
The increase in American arrivals has been most stark, they say. Mohammed Asaria, whose Range Developments is working on a new Six Senses resort, says U.S. citizens are coming to “hide it out.
“You've got the election coming. That's number one. You've had Covid and certain places in the U.S. have been challenged through that, and more working remotely.”
U.S. inquiries for residential villas at Secret Bay in Dominica have jumped 66%. “It’s the first time the U.S. has gone through a period this and it's not just the Covid-19 situation,” says Gregor Nassief, its proprietor. “It is the fear of what an extreme outcome on the left or right may look after the presidential election.”
Secret Bay in Dominica
Others are keen to escape with new-found working from home freedoms. “Digital nomad is not a new thing,” says Petra Roach, head of Global Markets for Visit Barbados. “Before we didn't really think about it.”
But then in July Barbados launched a new 12 month “Welcome Stamp” designed to attract remote workers to the country. Since its launch there have been around 1,100 applications, 42% of which are from the U.S. British and Canadians are the next largest nationalities to apply.
Hotels Run Rooms
Barbados's new temporary residents are checking into Airbnbs while real estate agents rush to find rental properties. Hotels are even offering long stays. Both the Hilton and Marriott in Barbados have announced month-long packages.
But the wealthier clients want something more than just a hotel room. Many want actual citizenship of the islands where they are staying. Barbados does not offer this but Grenada, Dominica and other Caribbean nations do.
“Citizenship By Investment,” or CBI as it is known, first started in St Kitts and Nevis in 1984. Traditionally it attracts Chinese and Middle Easterners who want a passport with more travel freedoms.
But in the past few months it too has seen an increase in U.S. inquiries. “We have seen an uptick in applications from the U.S. for people who want an alternative passport,” says Les Khan, chief executive of the St Kitts and Nevis Citizenship by Investment Unit.
Normally the two-island nation hands out passports to investors who never visit their country. This year is different: Its new citizens actually want to come to the islands. Some want to stay.
A house on St. Kitts
This is putting a strain on the supply of government approved real estate projects that qualify for citizenship. A minimum of $200,000 must be spent on real estate to access citizenship, but currently only approved developments count and most of these are linked to hotels.
“We're looking at alternatives outside of our hotels,” says Khan. “Individuals are looking for opportunities outside of those hotels and get access to our citizenship through private homes. It’s something that we're exploring.”
This is largely due to a change of lifestyle, he says: “Individuals who are from the U.S. apply for St Kitts passport are doing so to want to come and change their lifestyles and live on the island.”
Six Senses Residential Villas
Grenada is also having to come up with more room. Range Developments Six Senses resort will include a branded residential component in Grenada. “People want a second or third home in a place where they're not going to be affected by any of this should a second or third wave come,” says Asaria.
More Americans Renounce Citizenship
Real estate is not the only path to Caribbean citizenship. St Kitts and Nevis, Dominica and Grenada allow a contribution to a sovereign fund as an cheaper route. Citizenship advisers tout Caribbean passports for their visa-free travel freedoms, or, in Nassief's words, “A useful insurance policy” should things at home go awry.
However, more and more dual national Americans are renouncing their U.S. citizenship. A total of 5,816 Americans gave up their citizenship in the first half of this year, a 1,210% jump on the previous six months and more than double 2019's total says Bambridge Accountants.
“The huge increase in U.S. expats renouncing from our experience is that the current pandemic has allowed individuals the time to review their ties to the U.S. and decide that the current political climate and annual US tax reporting is just too much to bear,” says Alistair Bambridge, partner at Bambridge Accountants New York.
Tax reporting plays a large part in this: The U.S. is unique in requiring its citizens to pay tax wherever they are domiciled. Most of those renouncing are ly to have moved abroad several years previously. However, some now armed with a Caribbean passport and the power to work from wherever they want may have decided to take the leap.