The best place for your second home should be your ideal destination for a weekend getaway, an annual vacation, or an eventual retirement community.
It probably should have rental potential, too, for additional income or just because you’d rather not let a home sit empty most of the time. To narrow down your search, take a look at the places that others consider great locations for a home overseas.
Understanding the Best Places Abroad to Buy a Second Home
The hottest real estate market may not always be best for a second home—for example, according to Christie’s, a second home in Dubai has become the new must-have accessory for the super-rich.
But Dubai lacks the qualifications for an ideal second home: It not an ideal destination for a weekend getaway, an annual vacation, or an eventual retirement community—all important factors when deciding where to buy that second home internationally.
According to a survey by InterNations.org, the best place in the world to be an expat is Bahrain, followed by Taiwan and Ecuador. Expats give the gulf state high marks for friendliness, ease of settling in, and ability to communicate with non-native English speakers. Taiwan is noted for its high quality of life and Ecuador for its financial advantages.
The InterNations survey also asked expats, both year-round and part-time, about opportunities for working abroad, a question that might not appear to be immediately relevant to a second-home buyer.
But it is worth considering because a country that makes it easy for expats to work is more likely to have a large and diverse expat community. And, if you decide that you like your second home better than your first one, you may want to live and work there full-time.
Bahrain also tops the list of countries for the best career prospects for expats. But job opportunities push some destinations beloved by Americans, like Italy and Greece, toward the bottom of the list of 68 nations.
Live and Invest Overseas lists five places where an expat can find it all, meaning a beautiful place in the sun with rental income possibilities and investment potential:
- Panama for rental apartments and agricultural opportunities.
- Brazil, especially the coastal Fortaleza region that attracts many tourists.
- The Dominican Republic, because this Caribbean destination is still way cheaper than neighboring islands.
- Thailand due to its healthy economy and focus on tourism.
- Portugal, especially the Algarve coast and Porto region.
It's still possible to snag a bargain overseas. Some countries have struggled with a housing bubble (Spain), a debt crisis (Greece), and recession (Portugal) that have kept prices depressed. And if the U.S. dollar rises against the euro, buying property will be even more affordable.
Monción, Dominican Republic, offers the most affordable real estate to expats, says Live and Invest Overseas. Other affordable hotspots include Hoi An, Vietnam; Abruzzo, Italy; and Kota Kinabalu, Malaysia.
The Luxury Market Is Healthy
In the late 2010s, the luxury second-home market with price tags of $1 million and up experienced a big upswing in sales. Christie's International Real Estate notes that the luxury market for second homes increased 19% in 2017.
Buying a home in an uber-competitive market may require looking at up-and-coming areas and avoiding traditionally high-priced markets like the French Riviera, the world’s favorite second-home market for high-net-worth individuals, according to World Property Journal.
Luxury homes there come at an average price above $3 million, and there is plenty of competition from Russian, Middle Eastern, and British buyers. But comparable properties in the southwestern region of France remain a relative bargain at a little under $900,000.
The same flexible approach to luxury-home location works for the not-quite-super-rich in other prime second-home markets. In Spain and Portugal, luxury real estate prices range from about $1.1 million in Sotogrande, a giant resort-style development in Spain, to around $1.8 million in the Algarve, the region along Portugal’s southern Mediterranean coast.
Changes in world politics also have had an impact on the luxury second-home market, opening up new areas to explore. Coastal resort towns in Croatia and Montenegro are among Eastern Europe’s newer hot spots for second homes, and they are still far less expensive than their counterparts farther west.
This article was written by Carol M. Kopp and originally published on Investopedia.