If you’re an investor who has ever wondered whether it makes sense to invest in real estate outside the United States, you’re not alone. It’s a question that comes up more often than you might think, especially for investors who already feel confident in their process here and are looking for something new.
Recently, I had a conversation with an investor who decided to do exactly that. He was a hardcore flipper in the U.S., had done plenty of deals, and felt comfortable with the numbers, the process, and the risks. His thought was simple: he would take what he already knew, move somewhere warmer, and apply the same strategy in another country.
On the surface, it sounded like a great idea. In reality, it turned out to be much more complicated.
Culture Shock
One of the biggest challenges with international investing has nothing to do with real estate fundamentals – but has everything to do with culture.
In this case, the investor bought a house in Mexico with the intention of flipping it. He knew that contractors could already be difficult to manage in the United States. Getting people to show up on time and stay on schedule is a challenge here.
In another country, that challenge was amplified. He found that contractors were far more laid back, afternoon breaks were the norm, and reliability became a serious issue. For a flip, where timing is critical, that made the process frustrating and inefficient.
Different Tenants
The cultural differences didn’t stop with construction. When the conversation shifted to properties he planned to hold long term, the tenant base was very different from what he was used to in the U.S.
Tenant expectations, communication styles, and overall behavior did not line up with his prior experience. That doesn’t make international tenants better or worse, but it does mean you cannot assume things will work the same way they do at home.
Being surprised by those differences can create management issues if you are not prepared for them.
The Same Rule Still Applies
Even with all of these challenges, the most important rule of real estate still applies. Location matters.
If you know the country, understand the market, and have done your homework, investing internationally can make sense. Familiarity is key. Knowing where you are buying and why you are buying there is just as important outside the U.S. as it is inside it.
If you are comfortable with the market and confident that you are choosing a strong location, investing abroad could be a good opportunity. If you are not, the risks increase quickly.
The Bigger Picture
Beyond the local market, it’s also critical to analyze the macroeconomics. That means stepping back and asking larger questions before you invest.
You need to think about the stability of the government and the stability of the currency. Are there signs of unrest? Is there political or economic uncertainty that could affect property values or rental income? These are real risks that investors need to account for when investing outside the U.S.
Landlord-tenant laws are another important factor. Some countries have clear systems in place. Others do not. Understanding how friendly those laws are to property owners can make a big difference in how comfortable you feel owning property long term.
Small Things, Big Problems
Some of the challenges of international investing are surprisingly basic. In this example, the investor talked about something as simple as cabinets.
In the U.S., if you need cabinets, you go to Lowe’s or IKEA, buy prebuilt cabinets, assemble them, and move on. In this case, the supply chain in another country did not work the same way. He could not get prebuilt cabinets at all.
What would have been an easy task in the U.S. turned into a major struggle. These small logistical differences can add time, cost, and frustration to a project if you are not prepared for them.
Final Thoughts
At the end of the day, if you know your market and the numbers work, investing internationally can be very lucrative. But it requires more than just confidence in your real estate skills. It requires comfort with the country, the culture, and the systems you’ll be working within.
International real estate investing can offer real opportunity, but it also comes with risks that many investors underestimate. Cultural differences, contractor reliability, tenant expectations, and everyday logistics can all look very different from what you are used to in the U.S.
Many investors we work with appreciate taking the time to fully evaluate whether investing outside the U.S. truly fits their goals and experience level. If you are exploring real estate investment opportunities, contact us to talk through how different markets compare – we are always happy to help you think it through.
