What International Markets Are American Real Estate Investors Targeting?

A new report from Ronan McMahon’s Real Estate Trend Alert, a source of information for investors on real estate deals, has found that Portugal is the preferred destination when deciding to invest in an international property, taking into consideration quality of healthcare, safety, and crime rates among the most important criteria considered.

Following Portugal in second and third place among those polled were Costa Rica and Mexico, respectively.

Investing in property abroad is no longer an option only available to affluent investors, but has gradually become more popular with middle-class families over the last decade. Through the survey that was conducted with the readers of International Living, Real Estate Trend Alert set out to understand the preferences of American investors in terms of where they want to invest, how much they want to invest, and what they are looking to achieve with their investments.

“The picture we got from the survey is very clear. Americans want to live close to the beach in a country where there is plenty of sun. They also want to feel safe and have high-quality healthcare,” said Ronan McMahon, Founder and Editor of Real Estate Trend Alert. “When Americans look to invest in property abroad, they do so for many different reasons with relocation being the most important one. People want to move to Portugal, Costa Rica, and Mexico first and foremost. Panama takes the third place with retired Americans. When we look at the budgets that people have available to spend on property abroad, with a large majority not planning to spend more than $500,000, it is no surprise that we see Central American countries so prominently represented in the top three most favored countries.”

The first question to those polled pertained to the amount people planning to invest in international properties.

What is the total amount of investment(s) you are planning to make?

A large majority (79.54%) of respondents plan to invest less than $500,000, while 38.14% plan to invest less than 250,000. The numbers look very similar across retired and employed respondents. While the investment amounts may seem modest, it is important to note that in many foreign countries, the price of real estate is considerably lower than it is in the U.S. In Mexico, for example, it is possible to acquire a luxury condo on a five-star beach and golf resort for $250,000.

Respondents were also asked about the objectives they seek to realize with their investment(s).

What are your primary objectives with your planned purchase(s)?

The top reason cited for investments in properties abroad was that they want to relocate. In second place, comes the search for temporary residence, and in third place, follows the search for a property that can be used as a rental. With only a few exceptions, the way respondents ranked their objectives are the same for people who are retired versus people who are employed.

Respondents were also asked where they plan to purchase real estate.

In what countries are you considering purchasing properties?

Portugal came out as the clear winner here, followed by Costa Rica. Mexico, Panama, and Spain complete the top five (but the order in which they do so is different for retired Americans versus Americans who are employed).

Investors were also asked in what type of areas they would like to invest.

In what type of area(s) are you considering purchasing properties?

Beach property is the number one category of property purchased by Americans abroad. The city and suburbs follow in second and third place, respectively.

Finally, respondents were asked what criteria matter most to them when selecting a place to invest. For every country of the top five most popular countries, the three most important criteria were listed for the people who selected that specific country.

View on what people consider important when buying property abroad who selected one of the top five countries.

Safety and crime rates and quality of healthcare are predominantly present in the top three criteria for people who considered any of the top five countries to invest in. Both Costa Rica and Mexico have market conditions (perceived potential for appreciation) in their top three. For people who selected Panama, quality of governance was (on third place) an important factor to consider and Americans who want to invest in Spain attach (on third place) great importance to cultural affinity with the place.