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Efficient markets/jurisdictions to put 20-30m in real estate for passive income?

#21
JackAlabama said:
Personally, I stay way clear of this asset class unless I live in it or its so cheap to make not even a rounding error in my portfolio.
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Better buy to rent and then rent what you need as it gives you more return and more flexibility. Unless of course there is no market (which is probably what you are talking about).
 
#22
daniels27 said:
Better buy to rent and then rent what you need as it gives you more return and more flexibility. Unless of course there is no market (which is probably what you are talking about).
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Hmm it can be true ou false. Depend where you are living, where you invest, what is the yield, taxes on it etc etc..

I can see it 'yes' for reasons :

1) You are citizen or resident in a country where you are / were able to make a really cheap fixed loan (example in France or some other western european countries, where until covid, you were able to get real estate mortgage for 20years at 1-1.5%). You make leverage, almost free money ok.

2) You invested early in very cheap market (as I know / experienced : Budapest 10years ago, Bali, Tulum... Dubai?!). No mortgage but you were/are able to have very high yield, who can justify you put your own money.

3) You invest just for diversification in an ultra premium area, as 'safe haven" (some specific streets in Paris, or NYC, or London for example etc..). Yield is fucking ridiculous, but its not the point in that case.

Without (cheap) mortgage to leverage, or high yield without mortgage or not doing it in a specific area as safe haven (ok you can still add one or two just for your personnal pleasure, but then i wouldnt count it as investment. Same for most of cars / supercars), I would also avoid to put more money into.
 
#26
Dubai feels underpresented in this thread. Seems to be checking most of your boxes?
Also short term rental yield can get to 10%+ in some areas for small flats/studios.


Here is some back-up by deepseek :)

2. Example Calculation for a 10%+ Yield​

Assume a AED 800,000 studio in Dubai Marina:

  • Annual Gross Income: AED 500/night × 75% occupancy (274 days) = AED 137,000.
  • Annual Costs:
    • Tourism Dirham: AED 15 × 274 = AED 4,110.
    • Management (15%): AED 20,550.
    • Cleaning (AED 150/booking, 110 bookings): AED 16,500.
    • Utilities/Service Charges: AED 15,000.
    • Licensing/Misc.: AED 5,000.
    • Total Costs: AED 61,160.
  • Net Income: AED 137,000 – AED 61,160 = AED 75,840.
  • Net Yield: (AED 75,840 / AED 800,000) × 100 = 9.48%.
To hit 10%+:

  • Increase occupancy to 80%+ (e.g., AED 500/night × 292 days = AED 146,000 gross).
  • Reduce costs (self-manage, negotiate fees).
  • Target a lower-priced property (e.g., AED 700,000 studio with AED 70k net income).

3. Risks and Challenges​

  • Oversupply: High competition in popular areas may lower occupancy/ADR.
  • Regulatory Compliance: DTCM licensing and community restrictions (e.g., Emaar communities limit short-term rentals).
  • Seasonality: Summer (June–August) sees lower demand, impacting annual averages.
  • Economic Shifts: Global recessions or reduced tourism can affect returns.

4. Strategies to Maximize Yield​

  • Target Event Zones: Expo City Dubai, Dubai Harbour (near events/conventions).
  • Dynamic Pricing: Use tools like AirDNA or PriceLabs to adjust rates for peak demand.
  • Furnish Strategically: Invest in amenities (WiFi, smart TVs, gym access) to justify premium pricing.
  • Direct Bookings: Build a website/social media presence to reduce platform fees.

Verdict​

Yes, a 10%+ net yield is achievable in Dubai’s short-term rental market, but it requires:

  • A well-located, competitively priced property (studios/1-bedrooms in prime areas).
  • Efficient cost management (e.g., self-management, bulk discounts on services).
  • High occupancy rates (75%+) and strategic pricing during peak seasons.
Key Areas to Research: Dubai Marina, Downtown Dubai, Palm Jumeirah, Bluewaters Island, and JVC (for budget-friendly options). Always model scenarios with conservative occupancy/ADR assumptions before investing.
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#28
I would add Prague in Czech republic in radar.

One of the most popular places for tourists at this time.
Reasonable real estate market with a very high liquidity. Average time to sell appartment is 1-3 weeks and house 2-4 weeks.
No one asks for source of funds if buyer does not use a broker / real estate agent. Law requires KYC/AML just in case if buyer is represented by a broker / real estate agent.
No VAT applicable to a real estate rentals.
Low income tax based on many available tax deductions.
Usual ROI 8+%.
Banks do not ask a stupid questions. AML/KYC when selling real estate is a formal only. Banks require just a copy of a property purchase contract
Cash is still used a lot. Legal limit for cash payments is 500000 CZK / day (little more than 20000 USD).
 
#29
sknomad said:
I would add Prague in Czech republic in radar.

One of the most popular places for tourists at this time.
Reasonable real estate market with a very high liquidity. Average time to sell appartment is 1-3 weeks and house 2-4 weeks.
No one asks for source of funds if buyer does not use a broker / real estate agent. Law requires KYC/AML just in case if buyer is represented by a broker / real estate agent.
No VAT applicable to a real estate rentals.
Low income tax based on many available tax deductions.
Usual ROI 8+%.
Banks do not ask a stupid questions. AML/KYC when selling real estate is a formal only. Banks require just a copy of a property purchase contract
Cash is still used a lot. Legal limit for cash payments is 500000 CZK / day (little more than 20000 USD).
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Well... Compared to the rest of the Visegrad bloc, Prague is actually not the best in my opinion, but it is the richest and most developed.

  • Yes, it's a touristic city, but price per sqm is VERY high compared to others like Budapest.
  • No VAT? That's normal in most countries when renting residential units.
  • No AML/KYC requirements in other Visegrad countries either, even when using an agent.
  • Among the four Visegrad countries, Czech banks are the most ANNOYING. They ask for much more than banks in Hungary or Slovakia. I don't know Poland that well, but from what I’ve heard, it’s still better than CZ in that regard.
  • In Hungary, cash payments between individuals have no limits.
 
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#30
I would add Bali for rentals or constructing and reselling
I would add Valencia in Europe
Rent or flipping
Finally they have a new law in Spain against okupas which implements on 3rd of April this year
 
#31
I still don't get it. What kind of Great Taking scenario takes your crypto but leaves you apartments in Valencia and Bali for 20-30m. We are talking about 100 properties 200-300k each. You need a whole organization to maintain it
 
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#34
daniels27 said:
It is passive on paper only. But most passive income is only passive on paper. Day trading is also passive income. It just wastes your whole day. But in some jurisdictions you have some tax benefits.
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Day trading couldn't be further away from passive investing if done in person and not via bots, it's actively buying and selling and monitoring markets most days. I have done the US market while living in Asia in the past, that year of sleepless nights wasn't feeling very passive, there aren't many things worse than that.

Real passive investing should be stress free and require max 2h 'work' per week.

With 20-30m investment, one shouldn't have any problems spending 0.5% of it per year to delegate the boring part to someone else to manage, and to stay away from it completely. Letting it run via Labuan or other places it would be enough substance to save on taxes as well. A win-win scenario.

Just random ideas for inspiration with focus on passive investment, no recommendations: PPR Notes, Fundrise, (both around 10% per year or more)

These aren't fully passive, but it would be easy to hire people for that: investment in whole apartment blocks or self-storage.

Or the easy option as others have already suggested: REITs.
 
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#35
cryptofriendly said:
With 20-30m investment, one shouldn't have any problems spending 0.5% of it per year to delegate the boring part to someone else to manage, and to stay away from it completely. Letting it run via Labuan or other places it would be enough substance to save on taxes as well. A win-win scenario.
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Yes, but real estate income is normally taxed in the jurisdiction of the real estate. Hence, you can pretty much chose any jurisdiction that has a tax treaty witht the location of the real estate (or does not tax "passive" income).

cryptofriendly said:
Day trading couldn't be further away from passive investing if done in person and not via bots
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Yes, that was my point. Passive income in terms of capital gains, interest, dividends, royalties can be quite active. Still there are plenty of jurisdictions that tax those at lower rates.
 
#36
cryptofriendly said:
With 20-30m investment, one shouldn't have any problems spending 0.5% of it per year to delegate the boring part to someone else to manage, and to stay away from it completely. Letting it run via Labuan or other places it would be enough substance to save on taxes as well. A win-win scenario.
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With that amount of cash, I would just invest in an S&P 500 ETF. Yield typical value range is from 1.47% to 2.03% pa. Truly passive income, and capital is growing. Live and forget.
 
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#40
Mercury said:
Yes but your FIAT money debases whereas S&P 500 grows historically more than 10% (>6% when adjusted for inflation) pa on average.
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Lets not get into this historically thing,one crash like 1929,1987,2007,2020 will take away between 10 to 30 years of gains.The only real inflation proof asset is either Gold and until Quantum Computing comes BTC which is liquid Gold.If you want to buy and forget then it should be Gold and if you want to remember it once in a while then BTC( Ask Johnny Doe about it- these days I am not allowed to enquire or even guess where he is smi(&% )
 
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