Investors Should Consider Properties in These Countries, Study Says

These five countries represent the cream of the crop.

If you’re looking to invest in property, you want to make sure your investment will pay off. A recent GOBankingRates study looked at the 25 best countries to own investment property in to see where you should be putting your money.

Although some of the top 25 have been included in previous studies, such as the “50 Cheapest Countries to Live or Retire,” this one looks at a different set of metrics to determine which countries have the combination of characteristics most likely to earn healthy returns for individuals investing in rental property. Two of the top five locations are in Central America, but overall, the best countries to own investment property span the globe and rank highly for different reasons.

Here is a look at the top five countries to own investment property in and some details about why they top the list:

1. Philippines

The Philippines earns the title of the best country to own investment property for having a high average rent — $2,422 — coupled with a low effective rental income tax rate of just over 4 percent.

2. United Arab Emirates

The UAE boasts one of the highest rents of the 25 best countries to invest in real estate — $3,070, exceeded only by Canada and France — and an affordable 5 percent effective rental income tax rate.

3. Costa Rica

Whereas the Philippines’ and UAE’s top positions are driven by high rent, Costa Rica’s average rent is a far more modest $1,450, but its rental yield is an impressive 7.48 percent — which ranks second on the list of the top 25 countries.

4. Panama

Costa Rica’s eastern neighbor fares well by all three measures evaluated in the study. The $2,075 average rent ranks in the top 10, which makes the 5.75 percent rental yield slightly more palatable. And Panama’s effective rental income tax is the study’s second lowest — 2.08 percent.

5. Indonesia

That Indonesia made the top five is no surprise considering that its 8.61 percent rental yield is the highest of the countries included in the study.

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Here’s a complete list of the top 25 countries to own investment property in:

Top 25 Countries to Own Investment Property In
RankCountryRental YieldEffective Rental Income TaxRent (USD/month)
1Philippines6.13%4.06%$2,422
2UAE5.19%5%$3,070
3Costa Rica7.48%5.16%$1,450
4Panama5.75%2.08%$2,075
5Indonesia8.61%20%$2,486
6Barbados5.48%7.50%$2,501
7Thailand5.13%2.73%$2,029
8Ireland6.64%10.05%$2,077
9France2.79%10%$4,379
10Cyprus5.12%0%$966
11Germany3.99%2.71%$1,769
12Croatia5.43%8.4%$1,320
13Bulgaria6.24%10%$997
14Hungary5.24%13.5%$1,621
15Greece4.17%7.5%$1,460
16Spain4.7%19%$2,531
17Canada3.98%25%$3,740
18Morocco5.52%10.7%$854
19South Africa3.88%12.8%$1,636
20Argentina4.48%14.7%$1,490
21Colombia6.51%24.75%$1,548
22Malta4.35%23.33%$2,229
23Portugal5.45%26.44%$1,939
24Latvia3.8%17.25%$1,074
25Turkey3.62%21.94%$1,128

Click through to read more about the best and worst countries for taxes.

Methodology: GOBankingRates determined the best countries to own investment property based on the following factors: (1) rental yield; (2) average monthly rent; and (3) rental income tax rate.