How To Make Money In Real Estate 2017

Owning a piece of real estate in a foreign country doesn't only give you the opportunity to diversify.

Depending on what you buy, your overseas property can help grow your nest egg… or provide you a steady income in your new life overseas.

Today, let's look at three strategies for earning an income from a piece of foreign real estate…

1. Buy A Property With Guest Quarters

A bed and breakfast sign Of our three strategies, this is the most hands on, but it may appeal to expats who are eager to take on a project in their new home. You could buy a ready-made B&B or guesthouse… or look for a property that has separate guest accommodation on-site (this could be offered as a simple self-catering rental—keeping your workload low).

British expats Julie and Peter Thorpe bought three adjacent properties in Italy's Abruzzo region—converting one to a three-bed family home and another to a quiet couple's retreat. The guest villa generates additional income for the Thorpes' early retirement. Julie says, "In summer, our busiest season, we have breakfast, tidy up around the pool, chat with guests. We clean rooms once a week and, occasionally, cook dinner on request. Our schedule is flexible. We can do what we want when we want… it is a very relaxed lifestyle we have here."

Before you buy, be sure you're aware of the local laws related to running a tourist business. In France, for example, you—as the owner—have the right to live in your chambre d'hôte (B&B). But you can't keep personal living quarters in accommodation that's classified as a gîte.

Here are a few guesthouse opportunities I found in some of our favorite havens:

In the south of France, 25 minutes from Perpignan (with airport and TGV links), a four-bed house with lots of character, plus a separate one-bed guesthouse with kitchen, living room, and its own garden. The property is less than an hour to beaches and skiing. Price: 240,000 euros (US$292,300).
In Cayo, Belize, a property with four separate guest units; an owner's house with commercial kitchen, office area, and studio; plus a café with covered seating for 20 people. Located halfway between San Ignacio and Belmopan, attractions in the area include Mayan ruins, cave tubing, horseback riding, zip lining, hiking, and more. Price: US$240,000.
Surrounded by 27 hectares of hillside in Italy's Abruzzo region, a main house, plus additional property needing renovation. The main house itself is divided into two separate living quarters and includes a large commercial space. Near the coastal town of Pescara, this is an ideal location to explore Abruzzo's beaches and mountains. Price: 285,000 euros (US$347,000).

2. Invest In A Short- Or Long-Term Rental

Famous stone paved old streets with colorful houses in Sighisoara, Romania. — Alamy/Ionut David

In this case, you're not going to live on the property. This is primarily an investment—though, you may occasionally use the place for a vacation. If it's a short-term rental, you'll want to avoid staying in high season as that's when you'll make your highest nightly rates.

While you could take on all landlord duties (which may work if you live in the same area as your rental), you can forgo the hassle by engaging the services of a reputable property manager. Even when factoring in a 20% to 30% management fee, it usually works out to your advantage (i.e. a higher net yield) once you choose an experienced company that maintains competitive occupancy levels.

Some of your top options for doing this, right now—all completely turn-key—include:

An apartment in a private beach resort on the shores of the Mediterranean for US$90,000 (projected annual net yield is 8%).
A tiny home in a well-established resort on a stretch of dramatic Pacific coast for US$94,900 (with net returns of between
6% and 9%).
A beach townhouse near a city that's emerging as an international tourist hot spot (and a long-time favorite escape for locals). With beach and ocean views, these townhouses are US$99,000 (with net returns of 18% to 20%).

3 . A Turn-Key Micro-Farm Investment

Thai farmers inspecting leafy greens at a hydroponics farm Agriculture or productive land investments are excellent options for investors looking for above-average returns and/or cash flow. The best part about today's agri investments is that they are completely turn-key. With prices starting from around US$30,000, these farm-in-a-box opportunities are now within reach of the individual investor.

With a farming investment, there's typically a wait time of two to five years (depending on the growth time of the crop) until you have a productive harvest and begin to see returns…

The advantage is that, in the niche markets we've identified here at LIOS, your net yields are typically higher than you'd see with a traditional rental property. One of the most rewarding opportunities on the table right now is in an almond farm in Spain…

Spain, with an ideal growing climate and soil, is the second-largest almond producer in the world. On this plantation, you own your own parcel of land… and all the planting, processing and selling is done on your behalf…

Starting in year 3, your projected return is 2,000 euros (US$2,400). By year 10, that's expected to reach 15,000 euros (US$18,300)… and increase annually until year 45. This makes for a healthy boost to your annual income… and a chance to grow generational wealth… all without lifting a finger.

If you'd like to hear more about this new almond opportunity, get in touch here.

Lynn Mulvihill
Editor, Overseas Property Alert