Real estate is one of the oldest ways to invest and generate income, and that isn’t changing any time soon. However, the real estate market has been a bit chaotic in the U.S. since the start of the pandemic, and it has Americans searching far and wide to find the best real estate markets — including what you might call second-tier and third-tier American markets.
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Another option, though, is to consider other countries for real estate investment. While there could be regulatory hurdles and complex tax scenarios to navigate, it might be worth considering other countries if the price is right.
For instance, some foreign countries may have rental yields much higher than the U.S., which has an average yield of 2.91% (though that varies by market). Read on for some of the best foreign countries for Americans to consider buying property, along with a few of the worst.
- Rental yield: 10.0%
- Rent: $365
Sandwiched between Ukraine and Romania in Eastern Europe, Moldova is an interesting case. It has some of the highest rental yields you will find anywhere, yet rents are very low. This may be explained in part by the collapse in housing values around the Great Recession in Moldova. While they aren’t falling like they once were, they aren’t really increasing, either.
- Rental yield: 9.40%
- Rent: $332
Egypt has a rental yield that is almost equally high, and its rent is even lower than Moldova’s. Unlike Moldova, though, housing prices increased 28.25% in Egypt before inflation; things there are blowing up. Prices declined in the last two quarters of 2021, however.
- Rental yield: 8.82%
- Rent: $377
The typical rental yield is nearly 9% in Jordan, making it yet another great place for Americans to invest. Rents are under $400, so the country is still affordable. However, its real estate market has been struggling; it had declines across the board for all types of real estate in 2019.
- Rental yield: 8.81%
- Rent: $307
Rent in Ghana is among the lowest on this list, yet Ghana still maintains a high rental yield. That being said, its high-end housing market is struggling, although Ghana’s economy is being bolstered by much higher GDP forecasts for 2021 and 2022.
- Rental yield: 7.53%
- Rent: $682
Montenegro sits across the Adriatic Sea from Italy and to the north of Albania. You may notice that Montenegro’s rent, while still relatively affordable, is much higher than the other rents mentioned so far. Still, it maintains a high yield, and its housing prices increased by more than 36% in 2021.
Best: Costa Rica
- Rental yield: 7.48%
- Rent: $556
Costa Rica has drawn a lot of attention in recent years due to its environmental stewardship, but it also happens to be an excellent place to invest. Rental yields are around 7.50%, and monthly rent is reasonable.
- Rental yield: 2.68%
- Rent: $1,441
The average rent for a 3-bedroom apartment outside the city center in Israel costs about $1,441. Despite this, Israel has lower yields than the U.S. on average. Housing prices are increasing there at a modest rate of 9.21% in 2021.
- Rental yield: 2.45%
- Rent: $325
Argentina is a beautiful country, and rents there are quite affordable. However, you may want to steer clear if you are looking for places to buy investment properties. The average yield is under 2.5%, and property prices are on the decline.
- Rental yield: 2.32%
- Rent: $215
One thing to India’s credit is that rents are incredibly low there; a 3-bedroom apartment outside the city center is just $215 per month. But that doesn’t leave much room for rental yields, which are just above 2.3%. Plus, housing prices increased by just 1.1% in 2021.
- Rental yield: 2.25%
- Rent: $1,197
Austria has beautiful architecture and rich history, but it isn’t quite so good for real estate investors. Rents in the city are only slightly less than what you might expect, and the rental yield is just 2.25%. Housing prices did increase by more than 10% in 2021, however.
- Rental yield: 2.10%
- Rent: $1,691
China is among the worst places to buy a rental property for American investors. The typical yield is just above 2%, and a 3-bedroom apartment is nearly $1,700 in Shanghai — even outside the city center. Home prices did increase by nearly 10% in 2021.
- Rental yield: 1.93%
- Rent: $368
If you want a great place to buy a property as an American investor, you may want to look somewhere other than Turkey. The typical rent for a 3-bedroom apartment outside Istanbul’s city center is quite affordable, but the yield is well below anything you might call acceptable. There is one potential upside, though: housing prices increased by more than 35% in Turkey in 2021.
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