How International Real Estate Investing Works in 2024

International real estate investing has been made popular and accessible due to special programs like the Golden Visa or citizenship by investment schemes that offer real estate purchases as investment options. 

There are a few things to consider before making an international real estate investment. This guide will take you through a step-by-step process of choosing the best property for investment.

We will help you understand market growth rates, rental yield, and price per square meter to know how all of these factors will impact the profitability of your foreign property investment. 

Here is more of what the guide will cover: 

• How to choose the best country for real estate investment
• 14 best countries for international real estate investment
• Benefits of international real estate investments
• Things to know before buying property abroad

How to Choose the Best Country for Real estate Investment

International property investment can be intimidating, but understanding factors like market growth rate, economic stability, and rental yield can guide your decisions and help you see if an investment will meet your goals. This basic knowledge, along with choosing the right location, makes it easier to understand if a property could be profitable.

1. Market growth rate

Market growth rate refers to the annual percentage increase in the value of real estate in a particular area. It’s important for investors because it indicates potential profitability. A higher growth rate suggests a strong demand for property, which leads to increased property values and potential rental income. Therefore, checking the historical and projected growth rates of property values in the country you wish to invest in is crucial.

2. Price per square meter

The price per square meter is important for property investment because it helps investors compare different properties and understand market trends. It also aids in budgeting, as investors can calculate total costs based on the size of the property. Higher prices per square meter often mean more demand, leading to better rental income. Overall, this price helps investors make smarter choices.

3. Rental yield

Rental yield is a key metric used by real estate investors to measure the return on investment from rental properties. It shows how much money you can make from renting out a property compared to how much you paid for it. This means high rental yields can provide a steady income stream and make the investment more attractive. Again, researching the average rental yield in the area you want to invest in will be beneficial when choosing your international real estate investment.

4. Economic stability

Evaluate the country’s economic health, including GDP growth, employment rates, and inflation. A stable economy supports real estate value.

5. Legal framework

Understand the key laws regarding property ownership, foreign investment, and any restrictions. A stable and clear legal framework helps reduce the chances of legal issues and unexpected problems, lowering the risk of losing money. It also makes buying, selling, and renting property easier and safer, giving investors more confidence in their investment over time.

6. Location and demand

Focus on areas with high demand for housing, such as urban centers or tourist destinations. Location significantly impacts rental income and property appreciation.

7. Infrastructure development

Look for countries investing in infrastructure improvements, such as transportation, schools, and healthcare. These developments can enhance property values.

8. Political stability

Consider the political environment and any potential risks. Stable political conditions reduce investment risks and contribute to market confidence.

9. Currency stability

Lastly, consider the stability of the local currency. A stable or appreciating currency can enhance returns when converting back to your home country’s currency.

14 Best Countries for International Real Estate Investment

1. Portugal

• Market growth rate: Approximately 6.5% (2023)
• Rental yield: Around 6-7%
• Price per square meter: €1,483

Portugal is a great choice for real estate investors because of its thriving market, which is boosted by tourism and the demand for rental properties. Although the Portugal Golden Visa program ended the real estate investment option, the property market still grows at about 6.5% yearly. The country also has a stable economy, a good quality of life, and a nice climate, making it appealing for both investment and living.

2. Spain

• Market Growth Rate: About 5.5% (2023).
• Rental yield: Approximately 5-6%
• Price per Square Meter: €1,645

Spain is another great option for international real estate investment because it also has a growing market and high demand from tourists and renters. The average property growth rate is around 7%. Additionally, it is one of the few countries that offer a residency by investment program with a real estate investment option. The Spain Golden Visa requires you to invest at least €500,000 in real estate to get residency and access to the Schengen Area. Another benefit to investing in Spain is the pleasant climate and rich culture, which makes it perfect for buying a holiday home or a rental property. 

3. Greece

• Market Growth Rate: Approximately 8.7% (2023)
• Rental yield: Approximately 5-7%
• Price per Square Meter: €1,176

Greece has seen a rise in property values, especially in tourist hotspots like Athens and the islands. The average growth rate is about 7%, fueled by high rental demand. The Greece Golden Visa program allows you to gain residency by buying property for at least €250,000. Outside of its low investment requirement, Greece is also attractive to investors because of its stunning scenery and warm climate. It’s another great destination for a vacation home that can function as a getaway while still generating rental income.

4. Italy

• Market Growth Rate: Around 7.2% (2023)
• Rental yield: About 4-6%
• Price per Square Meter: €2,335

Italy’s real estate market is also popular due to strong tourism and a unique lifestyle. The country’s diverse market and cultural appeal attract real estate investors, particularly in cities like Milan and Rome. The average growth rate is around 3.5%. It is also possible to invest through the Italy Golden Visa, which needs an investment of at least €500,000 in real estate. 

5. Hungary

• Market Growth Rate: About 4.5% (2023)
• Rental yield: About 6-8% (particularly in Budapest)
• Price per Square Meter: €1,084

Hungary offers an attractive real estate market with lower property prices and good rental income potential, especially in Budapest. The average growth rate is about 5%. Fortunately, Hungary just reintroduced its Golden Visa and offers options to invest €250,000 in a state-approved real estate investment fund. The purchase of residential properties will be introduced on 1 January 2025. 

6. Antigua and Barbuda

• Market Growth Rate: Approximately 5% (2023)
• Rental yield: Generally 5-8%
• Price per Square Meter: $1,542

Antigua and Barbuda offer a strong real estate market, especially for investors interested in citizenship through investment. The minimum investment for the Antigua and Barbuda citizenship by investment program is $300,000 in real estate. The country has a steady growth rate of about 5%, driven by its appeal as a tourist destination. The beautiful beaches and relaxed lifestyle are attractive for investors and retirees looking into international real estate investing. 

7. Dominica

• Market Growth Rate: About 3% (2023)
• Rental yield: Approximately 6-8%
• Price per Square Meter: $900

Dominica is known for its affordable real estate options and strong citizenship by investment program. The minimum investment required is $200,000 in real estate for the Dominica citizenship by investment, with a growth rate of approximately 4%. Dominica’s focus on eco-tourism and natural beauty makes it an attractive option for potential buyers looking to find a second home in a serene environment. 

8. St. Kitts and Nevis

• Market Growth Rate: Approximately 4.2% (2023)
• Rental yield: Around 5-7%
• Price per Square Meter: $1,200

St. Kitts and Nevis citizenship by investment program is well-established and requires a minimum real estate investment of $400,000. The real estate market has a growth rate of around 5%. The country is particularly attractive to investors because of its popular luxury resorts, which makes it a great country for buying a multi-functional property to enjoy as a holiday home and an investment yielding profit.  

9. Grenada

• Market Growth Rate: About 5.2% (2023)
• Rental yield: About 5-6%
• Price per Square Meter: $1,100

Grenada’s real estate market is also appealing because of the Grenada citizenship by investment program, which requires a minimum investment of $270,000 in real estate shares and $350,000 as a sole owner. The real estate market in Grenada has an average growth rate of about 4%, but the country’s beautiful beaches and welcoming community also make it a good option for those looking for citizenship benefits and a pleasant lifestyle.

10. St. Lucia

• Market Growth Rate: Approximately 4% (2023)
• Rental yield: Approximately 6-8%
• Price per Square Meter: $1,150.

St. Lucia’s citizenship by investment program offers a minimum real estate investment of $300,000. The market has an average growth rate of around 5%. It is another attractive Caribbean country with beautiful landscapes and amazing weather, perfect for investors who want to diversify their portfolio while taking advantage of the visa-free travel that comes with a St. Lucian passport. 

11. France

• Market Growth Rate: About 5% (2023)
• Rental yield: Around 3-5%
• Price per Square Meter: €4,114

France is another great country to invest in because it has a diverse real estate market, with high demand in major cities like Paris. The average growth rate is around 3%. To invest in real estate, you can apply for a long-term visa, but it doesn’t directly lead to citizenship. However, France’s rich culture, historical sites, and strong economy make it an attractive option for investors.

12. Germany

• Market Growth Rate: Approximately 5.5% (2023)
• Rental yield: Generally 4-6%
• Price per Square Meter: €3,200

Germany’s selling point is a strong and stable real estate market, so it is a good option for those looking to buy property overseas, particularly in cities like Berlin and Munich. The average growth rate is approximately 4%. The country’s high quality of life and central location in Europe make it a prime choice for those looking for real estate investment in foreign countries and high-demand cities. 

13. Netherlands

• Market Growth Rate: Around 6.8% (2023)
• Rental yield: About 4-5%
• Price per Square Meter: €3,215

The Netherlands is another country with a thriving real estate market, especially in Amsterdam. The average growth rate is around 5%. Investors looking to buy property in the country can rely on the country’s strong economy, high quality of life, and growing rental market to ensure they get a return on their investment.

14. Turkey

• Market Growth Rate: Around 10% (2023).
• Rental yield: About 4-6%.
• Price per Square Meter: €1,000

Turkey offers a dynamic real estate market, attracting foreign investors with its citizenship by investment program. Through the Turkey citizenship by investment program, you can get citizenship through a minimum real estate investment of $400,000. For those looking to earn in a foreign currency, profit is very likely since the average growth rate is approximately 10%, making Turkey one of the fastest-growing markets in Europe and a top contender when looking for investment opportunities. 

Benefits of International Real Estate Investments

Investing in international real estate offers a variety of benefits that can enhance your financial portfolio and lifestyle. Here are some key advantages:

Diversification of investment portfolio

Buying overseas property allows investors to diversify their portfolios geographically, reducing the risk of investing in a single country. This diversification can help mitigate the impact of local economic downturns, political instability, or market volatility.

Potential for high returns

Certain international markets offer high rental yields and significant appreciation potential. Emerging markets, in particular, can provide substantial returns due to their growing economies, increasing foreign investments, and rising property values.

Hedge against inflation

Real estate often serves as a hedge against inflation. Property values and rental incomes tend to rise with inflation, preserving the real value of your investment. Investing in countries with high inflation rates can amplify this effect, providing better returns compared to domestic investments.

Currency diversification

Investing in properties in different currencies can help protect you if your home currency loses value. When converting back, the value of your international properties might increase, balancing out the loss from your home currency’s depreciation.

Residency and citizenship opportunities

Many countries offer residency or citizenship programs in exchange for real estate investments. These programs can provide valuable benefits such as visa-free travel, tax advantages, and the ability to live in a new country. Popular programs include the Golden Visa in Portugal and Spain and the Citizenship by Investment programs in the Caribbean.

Things to Know Before Buying Property Abroad

Property taxes

Tax obligations and foreign real estate investment tax are unavoidable. You will also need to pay some other annual taxes, so it is important to check all the tax requirements in the country where you are buying before making your big purchase.

Some countries calculate property tax as a percentage of the property’s assessed value, while others may apply fixed rates based on location or use. Generally, taxes can be very complicated, especially for international real estate. For instance, if a property generates income, investors may be subject to taxes on that income under a country’s territorial tax system. Many countries apply taxes only to income earned within their borders, meaning rental or business income from real estate would be taxed locally.

On the other hand, many European countries may offer special tax regimes for foreign investors. This means investors may pay a flat tax rate on rental income, which is generally lower than the rates for local residents. Regardless, this investment will impact the taxes you’ll be required to pay, and it’s important to leave no stone unturned and get advice from a local lawyer.

Inheritance laws

When purchasing real estate, you should ensure you understand the inheritance regulations in place in the country. In many countries, it is recommended to make a will when you buy property in the country. For example, if you own a property in Spain and are a Spanish resident, your assets will automatically be passed on to your children. If you want another beneficiary to receive your inheritance, then you will need to make a Spanish will.

Personal tax liability

If you are buying real estate to live in the property permanently, then you may need to be a tax resident in the country. Depending on the regulations in place, you may have to pay double taxes. Make sure you understand the taxation treaty between the country in which you’ve purchased property and your country of origin.

Limitations

Residency and citizenship by investment programs provide you with residency or citizenship in the country, depending on your choice. Therefore,  you will need to make sure you understand what you want from your investment before committing to a certain program and buying property abroad. It is also a good idea to be aware of currency exchange rates, as purchasing in a foreign currency can be costly. In addition to this, it is important to understand the current interest rates when buying.

How Can Global Citizen Solutions Help You?

Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments. 

We guide you from start to finish, taking you beyond your citizenship or residency by investment application. 

Frequently Asked Questions about International Real Estate Investment

Is it a good idea to invest in real estate overseas?

Investing in real estate overseas can be a good idea if you carefully consider factors like market growth, rental yields, and local laws. It offers the potential for diversification, profit, and even residency or citizenship in some countries. However, it also comes with risks, such as currency fluctuations and different tax implications, so thorough research is essential.

Is international real estate profitable?

Yes, investing in a second residence abroad can be extremely profitable. However, if you buy real estate overseas, the profit you generate will also depend on the place you choose for your international property investment.

What is the 2 percent rule in real estate investing?

The 2 percent rule is a general rule of thumb that is used to determine a base level of rental income a property should generate. Following this rule, an investor can expect to gain gross rental yields if the monthly rent is at least 2 percent of the purchase price of the property. Renting property is an excellent way to secure passive income. 

What is the 1 percent rule in real estate investing?

The 1 percent rule of investing in real estate takes into account the price of the investment property against the gross income that the property will generate. For a potential investment to pass the 1 percent rule, the rent needs to be equal to or more than 1 percent of the purchase price. 

Does the stock market impact property investments?

Real estate is generally less influenced by market fluctuations than other investment options. Consequently, it demonstrates greater resilience during periods of market volatility. Global real estate investment exhibits even weaker correlations, particularly when not directly impacted by trends in the US market.

Are there advatanges of international real estate investing?

Overseas real estate investment offers the potential for high returns, diversification across different markets, access to emerging economies, and protection against currency fluctuations. This kind of investment can significantly impact personal finance by providing income generation and wealth accumulation opportunities, but it also carries inherent risks that require careful consideration and financial planning.

What are considerations for making a foreign property investment?

Key factors to consider for foreign property investment include market research, legal and regulatory framework, financing options, tax implications, and potential risks.

It’s important to pay attention to local laws in the country you are buying in because there are differing requirements. For example, some countries, such as Vietnam, require foreign buyers to purchase life insurance as a condition of owning property.

Is Playa del Carmen a popular investment place?

Playa del Carmen, nestled on Mexico’s Riviera Maya, is a popular investment property destination.

This is due to its thriving tourism industry, stunning beaches, vibrant culture, and growing economy, making it an attractive option for rental income and potential capital appreciation.

Which countries offer the best returns on international real estate investments?

Countries that usually offer great returns on real estate investments include Spain, Greece, Turkey, and Caribbean nations like St. Kitts and Nevis. These places have seen property values rise and provide good rental income, making them attractive to investors. They also offer options for getting residency or citizenship through investment, which adds to their appeal.

How does international property investment affect my taxes?

Investing in international property can affect your taxes in several ways. You may be subject to local property taxes in the country where you invest, as well as income taxes on rental income. Additionally, you might need to report foreign assets on your home country’s tax returns. Understanding local tax laws and any treaties between countries is crucial to avoid double taxation and optimize your tax situation.