The five best countries for high rental property yields

Written by Andrew Henderson

Last updated April 7, 2017

Dateline: Kuala Lumpur, Malaysia

Here at Nomad Capitalist, we continue to stress how important it is to internationalize your assets with offshore bank accounts, trusts, companies and other tools that help you keep the results of your achievements safe from the hands of any one country.

Foreign real estate is one of the best offshore assets to hold because it is one of the few non-reportable offshore asset classes. Whether you own a home, an apartment, land or other property outside of the United States, you don’t have to tell the government about it.

While rising property prices in places like the United States and many Asian countries are signs of housing bubbles that are ready to pop at any minute, there are several countries across the world with good fundamentals and huge opportunities.

Beyond the smart investment decision and luxury of owning your own property overseas, in many of these countries, you can enjoy much higher rental property yields (the rate of income return over the cost associated with the investment property) than you would be able to gain at home.

Let’s take a look at five of my favorite countries for renting property.

Panama

best options for rental property yields

With its stable government and a free market, Panama is at the top of the countries for high rental property yields.

Panama is a top expat destination for many reasons. Property rights are strong, the location is easy to get to for Americans, and Panama is one of the most free-market countries in Latin America. They also have attractive second residency options.

Aside from being a growing expat destination for American retirees, the country is positioning itself to become the “Singapore of Central America” with serious infrastructure projects and business-friendly initiatives. In 2015, the gross rental property yields for Panama were 9%, coming in at 6th in the world. But unlike other countries at the top of the list — like Ukraine — Panama is one that I would bet on due to its stable government and other attractive elements.

Jordan

best options for rental property yields

Not too many people remember Jordan when thinking about investing in, then renting real estate, but in truth, this country has a lot to offer, especially because rents are paid in advance.

Number one on the Global Property Guide lists for both “long term investment rating” and gross rental property yields per annum is Jordan. Best in the world, the country has a 10.65% gross rental yield. Rents are paid one year in advance, which makes your job as a property owner much easier and stress-free, and property prices are relatively low.

For someone looking for an international base, Jordan is situated at the convergence of Europe, Asia and Africa and is one of the most stable countries in the region. If you’re interested in starting a business, the country has much better infrastructure, talent and more favorable laws than many countries that are more popular with expats.

Colombia

best options for rental property yields

if you’re looking to obtain a second passport, and for a place to invest, Colombia might be a good fit for you.

Colombia is a highly underrated, yet increasingly popular country for expats and investment. I recently traveled there with the Nomad Society to take advantage of investment deals that won’t be available for much longer as the country continues to grow.

Colombia is the second freest economy in South America after Chile and is becoming an ever more popular tourist destination for Americans. While property in Colombia may have low valuations now, it won’t for long. Plus, Colombia has a great second passport program for real estate investors.

The rental property yields in Colombia range from 6.5% to 9.6%, depending on where you are in the country. And if you’re looking for a place to move to, Colombia would be one of the top places on my list.

Georgia

best options for rental property yields

Georgia is becoming more westernized with each passing day, but you can still find great investment opportunities if you know where to look.

Georgia is an unheralded country that is attractive for myriad reasons, most prominent of which is having one of the most pro-business economies in the world. Foreigners can invest in any type of real estate in Georgia except for property with an agricultural deed. Construction and land are incredibly cheap in the country; for example, I was able to buy a city center apartment for $13,700 and a huge cattle ranch for about the same price.

The country is rapidly westernizing and rentals are just one of many accessible opportunities for entrepreneurs and international investors. Using some creativity in marketing your rental property in Georgia could lead to huge returns.

Moldova

best options for rental property yields

Though they may not be very wealthy, when it comes to investment, Moldova still has high yields to offer to any experienced entrepreneur who isn’t afraid to experiment.

The poorest country in Europe, Moldova is the type of place that often gets overlooked by international investors. This is a huge mistake as average rental property yields for medium size apartments in Chisinau, its capital city, are as high as 13%. In many cases, the numbers rise to 20%.

The country is relatively stable and for someone considering other options in Eastern Europe, Moldova is definitely a place to look at. For someone willing to buy offshore property in a less conventional place, renting out an apartment in Moldova could lead to an enormous payoff, rather easily.

This list is not comprehensive by any means and is more meant to introduce you to the massive returns on investment that you could achieve with a little effort, especially if you’re willing to look outside your home country and more traditional places to invest.

These five countries are just a few of my favorites, but to find the location that’s right for your needs and desires, I recommend purchasing my Foreign Real Estate Guide.

Of course, the less money you can pay in taxes, the more you can invest at high yields. The first step to increasing your property yields is often increasing the amount of investable cash – including through legal offshore tax reduction – rather than seeking the absolute highest yield.

Andrew Henderson
Last updated: Dec 27, 2019 at 7:13PM

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8 Comments

  1. PeacefulLife

    Love your articles but ALL those places are not worth risking my life or my money on. Crooks and people out to get the gringos.

    Reply
  2. Steve

    This post really get you excited about offshore investing when you only get 2-3% yeild in most major city in North America. BUT — here is the problem – no one ever talks about the adminstrative work that goes into operating a rental property like — finding & screening good tenants, dealing with tradesmen when something breaks in the appartment, and all the fun stuff. If you hire a professional property managment company, it will eat into your profit. I will love to hear more about the reality of operating an offshore property investment porfolio.

    Reply
  3. Cédric Ballet

    These are certainly not countries where you want to invest; beside Colombia, and i wouldn’t even invest there if i wouldn’t have strong local support.

    I have no doubt you make good money making people think they can build wealth following your advices; But the investment strategies you preach are flawed from the beginning.

    Without financial leverage and competitive and trustful local partners your investment will be at best very poor and most likely extremely risky. You have 90% chance to get swindled and lose your hard earned money following this path.

    In business, leverage and financing is everything and the investments your recommend will never be financed for the reason that

    1- you offer no income, collateral or any kind of garanties against the subject investments in the said country
    2- the investment products you propose are risky and illiquid
    3- the countries you recommend present significant political / corruption risks and most have sketchy judicial systems leaving you vulnerable to corporate and property raids.
    Your profile says you speak russian, then you must know what “рейдерство” means
    4- the currency risks are very high with the countries you recommend and inflation runs high

    My point is that even a poor investment in your home country with high taxes will yield better than those investments. If you borrow say 90% of the equity needed for a RE investment, and that this asset yields a mer 5% in rental income and 6% in appreciation, that would still outperform by at least 30% your Tbilisi investment that yielded an annual 10% rental income and 30% appreciation, because of leverage and depreciation tax deduction. Add to this the 7,1% inflation in Georgia and the currency risk then your investment doesn’t make any sense unless you are building a trump tower in Batumi

    Investing in several countries is a strategy only beneficial to high net worth individuals with enormous financial leverage and political support but not investors buying $15k mountain ranches in Georgia.
    As a small investor you need to build up capital at the same place to gain leverage and trust from financial partners. Spraying your little money in several corrupt countries may be fun but it is not the way to build wealth.

    I mean no disrespect and maybe you are the investment genius nobody knows, but you have yet to prove that your strategy works in the long run with hard evidences and not just words

    Reply
    • Nicholas G

      Nomad Capitalist: Cedric makes some important points – would be great to get a response to this.

      (One minor point is that Panama effectively uses USD thus eliminating currency risk in that particularly country).

      Reply
  4. Travis K

    I wonder why my return on rental properties here in Florida, USA are so much higher and so much easier to buy and sell. Finding good deals that you can keep your eyes on constantly tend to do the best in my opinion. Keep in mind renters can be highly destructive to your property if not inspected regularly. Also, chasing payments is a little easier if they are in your own “back yard” playing by the rules of a country you reside in.

    Reply
  5. Felicia Pondexter

    this was some good information. I have taken notes and will be using all that is mentioned to get the ball rolling. Thanks so much for giving us who wish to do the incentive and ideas of what it takes and what is needed to be done.

    Reply

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