Investing at Home vs. Abroad: Your Questions Answered

◼ Barbara says: Hi Ronan, I love all the beautiful places where you recommend real estate. But why would I put my money in another country when I can invest it here at home?

◼ Ronan says: Hi Barbara, first of all, there’s nothing wrong with investing at home. I’ve got some real estate investments in my home country of Ireland right now. If the numbers add up, a good real estate investment is a good real estate investment—it doesn’t matter where it is.

Indeed, many members of my Real Estate Trend Alert group started out with real estate investing in the U.S. Once they’ve dipped their toes in the water, they’re happy to look further afield for the best opportunities.

To make money, you need to ensure you don’t lose any. If your retirement account is almost 100% allocated to U.S.-and dollar-denominated assets, that’s a bet that the U.S. will continue unchallenged.

As all of us saw after the last financial crisis, that can be a risky bet. If there’s a big problem at home, your portfolio is going to take a pounding, maybe with no chance of recovery. Knowing this alone makes it prudent to look beyond borders.

Having a strong stable of foreign real estate in your portfolio can help insulate you against market changes—and reduce your exposure to your home market. I’m 100% invested in real estate. No stocks, bonds, nor crypto. Yet I still consider myself diversified across countries, markets, and real estate asset classes. For example, I own property in Mexico (Caribbean and Pacific), the U.K., Brazil, Portugal, and Ireland. This means I am tapping into very different markets. Middle-class renters in Brazil, Spanish and Dutch vacationers in Portugal, Americans in Cabo… and so on.

But the number one reason to own international real estate is this: real estate fortunes, large and small, are made at moments of big transformation. (I talk about this in detail on page 20…) I’m talking about exceptional changes that happen infrequently in your own backyard. Once in a lifetime events… massive national infrastructure projects… seismic social shifts… the likes of which are getting rarer in the U.S. But they’re happening right now in places like Mexico’s Riviera Maya and Portugal’s Algarve. Huge numbers of people are flocking to these places, and by owning the real estate before they get there, you can see phenomenal profit.

Plus, buying and holding real estate in most countries on my beat is just as easy as buying the house next door. Some folks will tell you it’s even easier.

Here’s an example: A member of my Real Estate Trend Alert group bought a condo in Spain’s Costa del Sol after I recommended a deal there in June 2015. She did the whole transaction by email. All remotely. She bought a penthouse for €129,000. Then she had it furnished and rented it short term in a hot market—again, all remotely. Finally in 2020, she sold the condo for €254,000, never having set foot in Spain or left her home.

Using my contact on the Costa del Sol, she sold for a gross profit of €125,000, not including the rental income.

And of course, owning a condo somewhere like the Costa del Sol has lifestyle benefits. There’s nothing quite like having a home on the Mediterranean that you can escape to whenever you want. Especially when it can throw off rental income when you’re not using it.

◼ Geoffrey asks: Hi Ronan, I’m interested in buying a home in the Dominican Republic. Is there anywhere in particular there you’d recommend?

◼ Ronan says: Hi Geoffrey. I spent seven days scouting the Dominican Republic last February, and found a number of opportunities.

One place that I love is the stunning beach town of Las Terrenas on the Samaná peninsula. It’s a little slice of paradise, boasting 19 miles of walkable public beach, palm trees, warm breezes, and chic cafés and restaurants run by French and Italian expats.

Las Terrenas is low-rise and low-key. Thirty years ago, it was a rustic fishing village. The town didn’t have an electricity supply until the 1990s. But it attracted thousands of Europeans who came as tourists, fell in love with the town, and started businesses: restaurants, cafés, bakeries, art galleries, small hotels…

The beaches here are stunning and varied. Each with their own character. From sheltered reef-protected bays to golden-sand beaches lapped by waves and backed by lush hills.

I can’t think of a nicer place to have a beach home. You’ll find your dollars stretch here, too. My team and I had lunch and drinks for $6 a head, which left me asking if this place had yet to hear about global inflation.

I’m working on getting a deal for members of my RETA group, but due diligence is tricky. It’s not an easy place to develop. We have been close a few times before, but in the end deals just didn’t pass muster.

However, I’m sending a scout back for an update. I’m also sending a scout to explore another island where I think there could be opportunity. It’s English-speaking and every bit the Caribbean paradise. We’ll see what he finds.