Buying rental property in tourist areas as a retirement plan?

rusvik

rusvik

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Jan 21, 2011
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Just thinking out loud. I don't have much faith in nationstates to be able to not confiscate private pensions eventually in some way. Either by taxation or by using it as collateral in some way.

So I was thinking as a retirement plan, how about buying property in popular or emerging tourist markets or developing countries?

The reason for this of course is to pay off the property over say 20 years which coincides with me being 50 something and then having a debt free property to either rent out or live in myself rent free once I get closer to retirement? If you rent out for the entire period, then you would get a good portion of the payments covered.

So essentially your mortgage payment would be your saving. If you paid it off fast or it appreciated in value, maybe because you bought it in a growing market like Nigeria/Indonesia/Burma, then you could use the free equity to buy another one.

What do you think?
 


rusvik said:
Just thinking out loud. I don't have much faith in nationstates to be able to not confiscate private pensions eventually in some way. Either by taxation or by using it as collateral in some way.

So I was thinking as a retirement plan, how about buying property in popular or emerging tourist markets or developing countries?

The reason for this of course is to pay off the property over say 20 years which coincides with me being 50 something and then having a debt free property to either rent out or live in myself rent free once I get closer to retirement? If you rent out for the entire period, then you would get a good portion of the payments covered.

So essentially your mortgage payment would be your saving. If you paid it off fast or it appreciated in value, maybe because you bought it in a growing market like Nigeria/Indonesia/Burma, then you could use the free equity to buy another one.

What do you think?
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You honestly think they won't just come and take your property when the shit hits the fan?
 
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20figures said:
You honestly think they won't just come and take your property when the shit hits the fan?
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How? A local company owned by a Hong Kong company or Seychelles trust in a developing nation? Good luck for the tax people trying to find that.

Or are you thinking that the that the local government would do that? There are risks with everything off course.
 
I've thought of doing that with a checkbook controlled IRA or Solo 401k. However, I'd pay cash. Maybe get something in the $50k-100k range. The US gov't would have a hard time seizing something thousands of miles away in a country where English isn't an official language. BTW, you might have trouble getting a mortgage in a foreign country.

BTW, anyone have property in Bulgaria? I found some pretty decent looking places online near Varna in the $60k+ range.
 
rusvik said:
Or are you thinking that the that the local government would do that? There are risks with everything off course.
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Wouldn't be the first time it's happened in history. Some shitty government gets into power, and decided to "fix" things for the people. Or maybe the govt decides they want to increase tourism, and thinks a highway going through your property would come in handy.
 
Don't hesitate to take action just because you can rationalize some fear about how it's impermanent. Everything is impermanent. That's why you gotta be able to pivot, bounce back, stay non-attached, etc. You just have to be winning at the end.
 
A client of mine does this. She buys up land/builds villas or vacation homes in Belize and sells them investors. The property is maintained and attached to an already active well known spa/resort. The resort rents out your property to vacationers when you are not there and you get a check. The occupancy is something like 75% year round and the return is 8-18% (tied to occupancy not even including the increasing value of your property). She arranges offshore discovery tours to Belize and sets up fun stuff for people to do over 7 days. Stuff like ATV, catamaran, snorkeling, mayan ruins exploration etc. Then she shows you the projects oceanfront/beachfront and jungle residences and and leaves you alone to enjoy your vacation.

If anyone is curious pm me. I'm not sure about WF's rules about promotion but she is pretty well known up north in the real estate investment community and I'd be happy to post her link if allowed.
 
Second said:
A client of mine does this. She buys up land/builds villas or vacation homes in Belize and sells them investors. The property is maintained and attached to an already active well known spa/resort. The resort rents out your property to vacationers when you are not there and you get a check. The occupancy is something like 75% year round and the return is 8-18% (tied to occupancy not even including the increasing value of your property). She arranges offshore discovery tours to Belize and sets up fun stuff for people to do over 7 days. Stuff like ATV, catamaran, snorkeling, mayan ruins exploration etc. Then she shows you the projects oceanfront/beachfront and jungle residences and and leaves you alone to enjoy your vacation.

If anyone is curious pm me. I'm not sure about WF's rules about promotion but she is pretty well known up north in the real estate investment community and I'd be happy to post her link if allowed.
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Yes, I know some people who do the same in Thailand, but I am very wary of these people. For example, the guys I know doing it in Thailand will talke a good game, but when you look at where their property is, it is pretty far outside the hot spots and I very much doubt they can keep their promises of renting it out long term as the supply increases. It is a pretty good investment strategy, but you really need to do your homework and understand where the market is going to be in 15-20 years. I am personally thinking about places like Indonesia and Burma. Both are going to grow faster once China becomes to expensive to produce in and with economic growth comes infrastructure and then tourists. For Burma, there is obviously a problem of political instability, but the country has mile after mile of coastline with beaches.
 
rusvik said:
Yes, I know some people who do the same in Thailand, but I am very wary of these people. For example, the guys I know doing it in Thailand will talke a good game, but when you look at where their property is, it is pretty far outside the hot spots and I very much doubt they can keep their promises of renting it out long term as the supply increases. It is a pretty good investment strategy, but you really need to do your homework and understand where the market is going to be in 15-20 years. I am personally thinking about places like Indonesia and Burma. Both are going to grow faster once China becomes to expensive to produce in and with economic growth comes infrastructure and then tourists. For Burma, there is obviously a problem of political instability, but the country has mile after mile of coastline with beaches.
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Yeah Thailand is a bad choice. Belize has clear ownership, is a tax haven and is English speaking. Big difference. I'v seen most of her property and its prime beachfront in Ambergris Caye or prime jungle 15 min from the main city. Indonesia is interesting though. Any idea what their ownership laws for foreigners are like?


EDIT: Pictures were wayyyy to large
 
charlesmartel said:
BTW, anyone have property in Bulgaria? I found some pretty decent looking places online near Varna in the $60k+ range.
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Instead of looking online, grab your shit and fly over there to see yourself. I just spent a week near Varna the last month. The worst post-Soviet trash you can imagine.
 
charlesmartel said:
I've thought of doing that with a checkbook controlled IRA or Solo 401k. However, I'd pay cash. Maybe get something in the $50k-100k range. The US gov't would have a hard time seizing something thousands of miles away in a country where English isn't an official language. BTW, you might have trouble getting a mortgage in a foreign country.
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Wouldn't you be more worried about the foreign country seizing your property?

A lot of people (rightly) knock the US for not being free, but most of these developing countries are far more corrupt and have far less respect for property rights.

Respect for constitutional provisions securing property rights and providing for an independent judiciary is somewhat lax. The judicial system does not enforce property rights effectively, and inconsistent application of laws discourages private investment. A government anti-corruption agency (BORCOR) set up in 2011 is not operational. Government corruption and organized crime are threats to border security.
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Source: http://www.heritage.org/index/country/bulgaria
 
Rent a big villa in Tuscany. Hire a chef and host a week long retreat for couples to learn how to cook Tuscan dishes. They can day trip out of there and come back and cook a great meal together every night. This way you easily cover your rent, get to eat great chow and maybe bang a few drunk chicks hanging with beta dudes. Profit.
 
Interesting..however a lot of pitfalls

#1 - There is no such thing as living free. There are almost always taxes and expenses. Sometimes the mortgage isnt nearly as bad as the taxes/fees

#2 - What if your hot vacation place becomes an undesireable place, like Mexico did. Now your investment is worth a whole lot less.

#3 - Corrupt foreign governments

I can probably think of more issues. I like the concept so much that I looked at a similar concept at the Atlantis in the bahamas and it seems like the only one making money is The resort.
 
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