Tag Archives: Buying or Renting Abroad

The Downshifting Dilemma: Buying or Renting Abroad

Buying a property to call your own is tempting, but in some cities, it makes far better financial sense to rent. To help you decide, we list a;

Buying or Renting Abroad, Johannesburg is good for buying
Buying or Renting Abroad, Johannesburg is good for buying

Rental Yield Comparison when Buying or Renting Abroad.

According to Global Property Guide “The gross annual rental income, expressed as a percentage of property purchase price. This is what a landlord can expect as return on his investment before taxes, maintenance fees and other costs.”

The Gross Rental Yield may seem insignificant if you are buying a property to live in. But, it is a useful statistic to know for two reasons. Firstly, if rental yields are low, then it makes more sense to rather rent than buy. Secondly, high rental yields are often a good indication of good capital growth potential.

Buy in South Africa, Rent in India

Numbeo.com is an excellent resource for rental yields and they have just released new Cost of Living information for January 2017. I’m a bit obsessed with browsing the stats; Seeing how cheap rent and food is in Bangalore never fails to amaze me. And on the flip side, I wonder why New Yorkers continue to slave away to maintain their high cost of living, when they could have a better work-life balance in Cape Town or Lisbon.

Numbeo.com lists this guide when deciding on Buying or Renting Abroad;

  • 3% = do not buy
  • 6% = borderline
  • 9% = ok to buy

I’ve been fortunate to buy some investment properties in Johannesburg and Cape Town that have allowed me to escape my stressful corporate job. And my experience is that the “Outside of City Centre Gross Rental Yields” of 12.11% for Johannesburg and 10.56% for Cape Town are both achievable. It makes good financial sense to buy in South Africa and Mexico. But Delhi is at the bottom of the list and you’d be far better off renting there.

Numbeo City Stats Rental Yield City Centre Yield Out of Centre
Johannesburg, S. Africa 11.34% 12.11%
Cape Town, S. Africa 7.84% 10.56%
Mexico City, Mexico 6.70% 7.29%
Lima, Peru 6.29% 5.95%
Hanoi, Vietnam 3.69% 7.33%
Budapest, Hungary 5.21% 5.80%
SaintPetersburg, Russia 5.24% 5.69%
Santiago, Chile 4.70% 5.82%
Istanbul, Turkey 4.71% 5.61%
Warsaw, Poland 4.44% 5.12%
Bogota, Colombia 4.70% 4.73%
Chiang Mai, Thailand 4.81% 4.54%
Lisbon, Portugal 4.19% 4.97%
Athens, Greece 4.33% 4.00%
Bangkok, Thailand 4.18% 3.95%
Bangalore, India 3.45% 4.62%
Prague, Czech Republic 3.50% 4.11%
BuenosAires, Argentina 3.60% 3.89%
Delhi, India 2.46% 3.15%

@NomadicYou Would you prefer buying or renting abroad in your new downshifting city? What scares you most about foreign property ownership?

Feel free to contact me if you have any questions about buying in Cape Town or Johannesburg. Property investing is my favourite topic!

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