GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
These brands compensate us to advertise their products in ads across our site.
This compensation may impact how and where products appear on this site.
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information.
you’re able to read more about oureditorial guidelinesand our products and servicesreview methodology.
In the real world, it rarely works out that way.
That one word says it all: its a business, and one you probably dont know well.
Landlords dont pocket the rent minus the mortgage.
In any given year, non-mortgage expenses typically eat up around 50% of the rental income.
In the industry, we refer to this (not so creatively) as the 50% Rule.
Seasonality and higher property management costs add even more wrinkles among short-term rentals.
Dont justify it as an investment.
Tax Complications
Buying real estate in a foreign country makes you subject to their tax laws.
These hidden costs can make your overseas investment a lot less appealing than it seemed at first glance.
Or in Venezuela in the 1990s?
Or even in Lebanon after the economic collapse of the late 2010s?
Some countries arent as stable as they appear, notes Ryan Hess of title companyCapstone Land Transfer.
If the political climate changes or the economy takes a nosedive, your propertys value could drop fast.
Or even worse, you could end up losing ownership entirely.
That doesnt require the state to seize assets (although it can).
I spent a month traveling Patagonia in Argentina in late 2022 with my wife and daughter.
Good luck getting a mortgage in Argentina.
That in turn meansfewer prospective buyersand lower inflation-adjusted prices.
Runaway inflation also leads to economic instability, as Argentina has suffered over the last three years.
Which, again, drives down real estate values.
And currency risk cuts the other way too.
Long-Distance Headaches
Seamus Nally, CEO of landlord softwareTurboTenant, notes that long-distance ownership comes with plenty of challenges.
Having a house overseas makes things tricky if something happens to the property if you arent there.
Most regret it in the end.
If you want an overseas home as a status symbol, fine.
But realize that, for the vast majority of people, this is not a good investment.
It will be atime and energy drain, and you will likely lose money.
More From GOBankingRates
Share This Article:
