Author Topic: Outside US real-estate question - Is it a good investment?  (Read 585 times)

ricardomtg

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Outside US real-estate question - Is it a good investment?
« on: April 13, 2018, 12:27:20 PM »
I'm currently living in El Salvador. Let me preface my question by saying I think its not a good investment but I keep hearing that I should do it. I'm planning on paying it cash.

A 2,500sq ft apartment is worth $150,000 and the avg monthly rent is about $700. I do all the property management and it costs me about $1,200 a year. Taxes are about $600 a year.

What do you guys think?

 

Jrr85

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Re: Outside US real-estate question - Is it a good investment?
« Reply #1 on: April 13, 2018, 02:04:00 PM »
I'm currently living in El Salvador. Let me preface my question by saying I think its not a good investment but I keep hearing that I should do it. I'm planning on paying it cash.

A 2,500sq ft apartment is worth $150,000 and the avg monthly rent is about $700. I do all the property management and it costs me about $1,200 a year. Taxes are about $600 a year.

What do you guys think?

 

Well, the numbers you are quoting work out to a 4.4% return and require you to manage it.  Not knowing anything about el salvador and how likely the property is to appreciate and how much risk there is, the numbers aren't disqualifying, but it certainly doesn't look compelling. 

kpetar

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Re: Outside US real-estate question - Is it a good investment?
« Reply #2 on: April 15, 2018, 02:16:47 PM »
Residential cap rates generally fall within 4 to 10 percent and your is close to the low end. You can increase ROI by purchasing with a mortgage but still, won't be good ROI in my opinion.

GrayGhost

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Re: Outside US real-estate question - Is it a good investment?
« Reply #3 on: April 15, 2018, 09:25:44 PM »
I'm currently living in El Salvador. Let me preface my question by saying I think its not a good investment but I keep hearing that I should do it. I'm planning on paying it cash.

A 2,500sq ft apartment is worth $150,000 and the avg monthly rent is about $700. I do all the property management and it costs me about $1,200 a year. Taxes are about $600 a year.

What do you guys think?

 

Well, the numbers you are quoting work out to a 4.4% return and require you to manage it.  Not knowing anything about el salvador and how likely the property is to appreciate and how much risk there is, the numbers aren't disqualifying, but it certainly doesn't look compelling.

Let me elaborate just a hair...

You could get better returns, have much more diversification (thus lower risk), spend not even a tenth the time that you do, AND have a virtually liquid investment vehicle if you bought some indexed stock funds instead.

I enjoy real estate investing as much as anyone, but if the numbers are better for stocks... why spend the time and trouble managing an apartment?