Have you ever dreamed of buying a house—for cheap—in a foreign country and moving there to live the ex-pat life? Or buying an investment property and renting it out? Or getting a fixer-upper and flipping it for big bucks down the road? This could be your moment. While the coronavirus pandemic has been devastating, it has also had a silver lining by creating real estate bargains around the globe at a time of unprecedented low-interest rates. “Nothing like the coronavirus crisis has come along before,” says Ronan McMahon of Real Estate Trend Alert, a publication from InternationalLiving.com, a site that tracks the best places in the world to live, retire, travel and invest.
Real Estate Trend Alert recently released a report on the five best places to find bargains around the globe. According to McMahon, the idea is to take strong US dollars or borrow money at historically low rates, and put it all to work in overseas markets by buying undervalued assets and locking in the potential for income and appreciation. “Many people feel powerless in the face of this chaos, but my feeling is that if you play this crisis right, it can prove to be quite lucrative over the long term,” says McMahon.
Add to this a work revolution—with companies pioneering remote employment—and you have the recipe for ex-pat success.“The world is not going back to how it used to be,” says McMahon. “This is either scary or exhilarating—either way it’s happening. And for opportunity-focused folks, it’s a gift.”
When looking for real estate, McMahon says it’s important to focus on three different kinds of places. “That means looking to internationalized markets, like Mexico’s Riviera Maya. Or to places where the middle class is exploding, like Colombia. Or to downward-trending spots like parts of Europe where the population is older and innovation is limited, but where offerings have historic appeal, like Italy, for instance,” says McMahon.
McMahon also emphasizes that while buying in a crisis can appear easy in hindsight, it’s not as simple as it seems. His advice: “Buying right in any crisis requires cold sober thinking. You start with your personal criteria for an investment. Then you ruthlessly adhere to those criteria. You need to be unemotional and clear-headed. Step out what you consider the value and do not be fearful when you find a deal that matches your criteria. Don’t be greedy. Don’t hesitate because you think a deal might be better if you wait. If it matches your criteria, act.”
Read on for the lowdown on five cheap—and amazing—places to get real estate deals right now.
RIVIERA MAYA, MEXICO
The Scoop: Mexico’s Riviera Maya has been transformed over the years from a sleepy backwater into a world-class vacation destination. And along with the tourism growth, mobile professionals and digital nomads have flooded to towns like Playa del Carmen and Tulum. “Tulum has cornered the market for being eco-chic,” says McMahon. “It’s the kind of place where stars who fly in private jets can feel virtuous by spending a few nights off-the-grid on the beach. It’s as fashionable a destination as St. Barts, St. Tropez and the Greek island of Mykonos.”
Until now, a 1,000-square-foot oceanfront condo in Playa del Carmen could set you back $600,000, but things are about to change—for a brief moment. “Thanks to the crisis, a buying moment exists today—a pause in the mammoth growth trajectory of the Riviera Maya, which can be turned to an investor’s advantage,” says McMahon. “The goal is to buy the right real estate to be set up for income and appreciation.”
Insider Tips: McMahon’s advice is to move fast. “The Riviera Maya is in the midst of a multi-decade transformation and this current crisis is going to be a short sharp shock and then it’s back to the races,” says McMahon, who thinks buying pre-construction is a smart idea. That means: “By the time a person takes delivery of a condo, millions of vacationers will have long ago returned to enjoy the beaches, cenotes, international dining, and tropical weather.” You can rent your new vacation home to just those people.
McMahon says he has seen spacious townhouses in Tulum for $149,000 that he figures will be worth $76,000 more within a year of delivery and could throw off a 13% yield or more on rentals. “Thanks to the crisis I was able to get a free pool thrown in with each home,” says McMahon. “The developer’s construction costs are in pesos but we are buying in dollars, so as his costs dropped, I was able to get him to concede more.”
He has also seen deals on two-bedroom condos just steps from the beach. Currently priced at $174,800, he predicts that they will be worth in the region of $260,000 within five years.
ITALY
The Scoop: Due to the economic impacts of coronavirus, McMahon is predicting that prices in Italy will drop to historic lows. “We will see big falls in the value of the best-in-class real estate. I’m figuring on 30% in Italy on prices that have been already been falling for 15 years,” says McMahon. “The value of the marginal real estate in the hills and empty villages will go to zero.” And when tourism bounces back in blue-chip locations like Venice and Rome, it will open up a new market for vacation rentals—meaning you can rent out that apartment you just bought. If you don’t want to live there yourself, that is.
URUGUAY
The Scoop: “In uncertain times smart investors look for a safe haven. They look to assets like real estate—in places where they can park themselves and their money,” says McMahon. “Uruguay is one of those places. This little country rarely makes the news headlines. It’s a beacon of stability in an uncertain world. So much so, it’s almost dull.”
PANAMA
The Scoop: Just like London, New York, Singapore, and Hong Kong, Panama City has become a global center of finance and commerce. Plus it’s safe and stable—a rarity in a turbulent world. “Panama’s robust economy weathered the 2008 crisis and Panama will withstand the current global crisis just fine, too,” says McMahon. “Panama is one of those safe havens that sucks in resources when things in the world get volatile.”
MEDELLÍN, COLOMBIA
The Scoop: McMahon says that Colombia is another solid bet. It has emerged from its troubled past to become a major regional player, with a steadying political environment, market-friendly policies, rich natural resources, strengthening trade ties, and a modernizing economy. But its currency has tanked and like everywhere else in the world, the real estate market has stalled due to the current crisis.