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Real Estate Without Borders
Title: The Next European Hotspot? Why Albania Might Outperform Its Neighbors
00:31:23
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Transcript34 lines
- [00:00]
A
Welcome back to Real Estate Without Borders. I am joined today by Mick from Global Property Guide. Did I say that right? Is that the right pronunciation of your name?
- [00:08]
B
Yes, exactly. Absolutely correct, yeah.
- [00:11]
A
Can you tell me a little bit about yourself and about Global Property Guide? I mean, we've been using the platform for research on our podcast for years and I noticed some changes recently and updates and I'm very impressed. So I've always been happy with the data tools and everything. So I'm curious because you were telling me the story a little bit before we started to record and I just said, well, let's maybe let's just hop on the recording then, because I feel like it was getting good. So yeah, let me know. Like, who are you and what do you do?
- [00:37]
B
So my name is Mick Calnet. I am, I am basically the global real estate expert for Global Property Guide. So the website itself actually is already 20 years old. However, we, we bought the website from a nice English gentleman who's now in his 70s in 2022. So we really enjoyed and we really like the work that he has put in throughout the years. However, there was some room for improvement, especially regards to UI and how the customer actually interacts with the website. So we have made a ton of changes. We actually have gotten rid of many of the countries that used to be listed before because some of them might be quite irrelevant. So now we are mainly focused on all of the countries that we consider relevant and that provide enough data for us to even include them. So what we do is we, we collect a lot of real estate related data such as square meter prices, rental yields, median house prices, mortgage rates. So we try to include as much relevant information for the investors as possible. So, so this is our main part of business. And now since 2025 we have actually started, started like doing consultations for all of our customers directly via phone calls, zoom calls, so on. And we're trying to expand because I do have a decent amount of experience establishing companies and buying properties in roughly eight different countries today. So we're trying to follow the trend and help other investors to establish their portfolio as well.
- [02:09]
A
What would those eight countries be where you have experience? Because I feel like that's the highest number we've seen on the show so far. Most people are specialized in one or two, maybe three markets. I know in Europe it's a little, I mean, everything's closer, right? So it'd be like buying in a different state. But I'm curious to hear.
- [02:23]
B
So, so, so just as a bit of background, we are actually real estate investors ourselves. So we do have a background in online businesses. So we actually why we bought the website is, was also for our, our own research. We wanted to get more information and we found this website to be a great match for us. So we have. So like every like real estate investor, everybody starts in their own own country. For us it's Estonia which where most of the management team is based out of. And a lot of our employees are scattered around the world in Europe, Asia and also Latin America. But, but yeah, so we, we started in Estonia. We have a decent amount of apartments here. However, after we understood that the rental deals are not getting any better in Estonia we started looking a bit further away. So the first investment we made was in Mexico. Now since then we have actually bought in four different Latin American countries. So that also includes Costa Rica, Dominican Republic and Colombia. Also within Europe I do have like first hand experience. I do have in Athens, Latvia and Estonia. So but since like all of this has progressed there have been many markets that we haven't bought actually bought in because the negotiations didn't end as well. So a lot of Caribbean islands I consider myself as a relatively decent expert in such as the Bahamas, Cayman Islands, Aruba and so on. And also I would, I would also consider many of the southern European countries, specifically Spain and Portugal as markets I am established in. So I've been helping customers out so I feel quite comfortable there as well.
- [04:00]
A
When you say helping customers like do you, somebody comes through your platform, they are using your analytics tools, trying to gather data and you would try and represent them as a purchaser as a result of that. Like you would take them on as a, on a buyer contract and some sort of service fee or how does that actually look like, what's the shape of that business?
- [04:20]
B
So we do it in actually many steps. So everybody who subscribed to us actually gets a free one hour call with me directly. So then we can like maybe a customer from the US has, has, has an idea in his mind but he's not sure. So I will kind of like try to navigate him through the obstacles that one might, one might find when buying a prop, buying a property abroad. So we do it in many steps. So the easier one is kind of like a flat fee depending on the location and how many, how many countries you want to include. But we do like property research where we find turnkey properties with rental history. Now this is mainly focused on short term rentals because we do have our own method how we find properties that have already rental History and that can be proven. So that will make calculating rental yields relatively easy. Or I can do like a buyer's agent service which means that obviously I'm not going to be boots on the ground right now. So I will charge like a percentage like a real estate agent would. So why will. I will provide like from start to finish, like all the guidance including all the properties, like getting all the data from the, from the seller, communicating with the real estate agents, the lawyers, the accountants, property managers and making sure that the pros that the process of handing over the property to the new owner goes as smooth as possible. So I, we kind of do it in many different levels.
- [05:44]
A
Do you find that the majority of people who are looking for properties outside of their like home country are looking for something where it's like a seasonal residence and they want to do the Airbnb or, or you know, short term rental like you mentioned, like there's probably not a lot of people who are looking at long term rental yield type investments.
- [06:02]
B
Right, sure. So it's kind of mixed. So at first when before I did like I think two years ago or so, when we did our first like direct zoom meetings with our customers, I was expecting everybody to be only hunting for the best rental yield and didn't and that they wouldn't care about anything else. However, having done hundreds of these throughout the past few years, I would definitely say that the client profile, it is a bit different. Yeah, we ourselves as investors, we're based out of Estonia, so we are looking for, looking mainly at the numbers side of things. However, many, many like especially customers from North America, some countries in Europe, I would say that they were, they are rather focused on multiple factors. So maybe they have like a plan B residency in mind instead. Maybe they might want to use it for a few months out of the year for vacations and the rest of the time rent it out either long or short term. So it can be a mixture of both. It doesn't have to be one or the other depending on the market. So. So yeah, the profile is quite different. And of course like in addition to the like normal private individuals that we have as customers, we do cater a lot of like institutional investors as well. Private, private banks, wealth management and so on. So private equity and, and, and yeah, so it's a large variety of different people with different interests.
- [07:20]
A
So when you say private equity, like private equity companies consume your data and they find like, they use it for as like a part of their tools for their analysts.
- [07:29]
B
Exactly.
- [07:30]
A
Yeah. That's cool.
- [07:31]
B
Yeah, good for you, a lot of like Asian and also European Swiss banks and so on. Yeah.
- [07:37]
A
Yeah. What do you find? So, so h, what percentage of your users would that be? It's funny that you said Swiss banks because I'm a, I'm Swiss actually. So, so we, this show is a, a U.S. show. I live in Toronto and I'm, I'm a Swiss citizen, so I lived in Switzerland for a bit, did my military conscription there. And Swiss banks are always on the forefront, especially when they love data like the Swiss. They just love it. So anyway they do. What percentage of your users would be like that institutional or like large scale investment kind of audience and then what percentage is consumers?
- [08:05]
B
I think of course the majority will be like actual consumers, either private individuals or like among our customers are obviously are like international real estate agencies, ones that are established in like 140 different countries like ReMax and Coldwell Banker and so on. In terms of banks, obviously they will have like a few users that are for basically analysts who, who need some sort of like a data baseline or so on. So they don't interact with us as directly as some of the private customers do. But other than that, yeah, we, we all, we also actually do offer a lot of like publications, newspapers, news outlets, like free access to our website, some of them being like Bloomberg era news and Financial Times and so on. So, so yeah, we really stand behind all of our data and we work every single day to improve the quality of it as well to make sure there are no mistakes.
- [09:00]
A
Yeah, I've, I've always been very impressed and I've noticed some improvements lately and I think a lot of it was maybe getting rid of some of the markets where they're a little bouncy and volatile. Cause it's probably like. I actually come from a data science background. I built the largest data science platform for real estate professionals in the world that was purchased by the Toronto Real Estate Board. And so it's like still to this day the most used data science platform for, for real estate professionals. And so I can, I can appreciate how difficult that job is that you're describing. Right. Like it's, it's not easy to aggregate global data, different formats. Right. Trying to find the lowest common denominator of variables that you can use. And I think I really applaud you for doing an excellent job with it. So when you, when you mentioned consumers are using the platform a lot, what, what, what is it like, who's your typical avatar of a consumer that uses Global Property Guide?
- [09:52]
B
So if we put the institutional customers aside that we mentioned before, I would say that obviously the average person will be somebody who has always dreamed about owning a property somewhere else outside of their home country. So I think it's somebody who's kind of ready to take the first step but isn't quite sure yet how to do it. So he, he or she, they, they end up on our website. So a lot of our customers are very long term. Some of them come and go which is kind of, kind of makes sense like in every business. So I would say that the average, average customer, definitely somebody without too much specific knowledge about real estate investing, foreign real estate investments and definitely need some like guidance or some confirmation about their ideas. And I think that's why like these direct like phone calls or zoom call zoom meetings, I think they go a really long way. So I can kind of like that's the, that's the best thing about us is that we're not incentivized to, to I don't know, promote some specific developers. We're always going to be completely neutral. So I think that kind of gives me and like a trust advantage because if somebody tells me I want to buy in that country or that city, but I don't think it's a good idea in regards of what your goals are, then I'm just going to be very honest with you until tell you that please don't do that or I don't suggest you doing it. So I think that kind of gives, gives like an average profile of our customer.
- [11:25]
A
Yeah, I think like I've built my entire business on what you're describing, which is just being a neutral and unbiased source of data. And you know, it's hard sometimes because I think people will assume that the information that you're conveying has a bias. But if as long as you're prevent presenting like real concrete data, it's you know, empirically verifiable, it can't be argued for or against and I think people want that source of truth in an environment where it's becoming increasingly difficult to get access to good information which, which would, you know, it should, should be easy with AI, but it's, it's not. Right. So I. Yeah, yeah. So let's like, let's zoom in a little bit further on the, on the avatar. Like is there a specific country that stands out to you where you're seeing most of your demand from? Like I'm sure you have site analytics that you can see. Like where most people are browsing from is. There is There, anywhere, of course, North America. Yeah, it is North America.
- [12:23]
B
Yeah, that is correct. So obviously we do have customers from every single part of the world you can possibly imagine. Maybe even slightly surprising to us is that we do have a lot of customers from, for example, from Egypt or like Middle Eastern customers who are, maybe they have slightly different goals in mind. Either they are looking for, I don't know, a golden visa in Greece or with a real estate investment. That's still possible even though the thresholds are changing every year and it's getting more and more difficult. But yeah, most of our customers are definitely from North America, United States specifically. So this is where I have most interaction. Although Europe, as I would say, I would say Europe in general, not the specific countries, is very close, close second. So a lot of customers I've spoken to directly are definitely of European as well. Swiss people, people from Germany, France and so on. So they have very, I would say different reasons why they are looking to buy a property somewhere else, maybe in another parts of world. And the same goes for North Americans as well. Because I know that for example, Portugal is probably one of the more popular destinations for Americans and Canadians right now because the property prices are quite, they have been going upwards and upwards every single year. It's a very, I would say a red hot market. But that applies to other markets as well because not everybody is chasing the greatest deals. They're maybe more focused on like lifestyle. So maybe Spain or Italy may be a better fit. So it all depends.
- [13:52]
A
Yeah, we've had some experts on from those three markets actually, so I'm glad you mentioned them. I found like Portugal, they obviously walk back there sort of like golden Visa system a little bit. Right. Because they had it during, during the pandemic where they were really just trying to get a lot of the digital nomads and you know, sell them this quality of life. And I think they saw the worst deterioration of housing affordability in the world during, during the pandemic. I actually, I was, I was like viral in Portugal for a bit because I had posted a chart about how Canada saw the second worst deterioration in affordability and Portugal was number one. And it got picked up like every comment in the, in the, on the Instagram post is, is in Portuguese and I had a bunch of Portuguese media calling me to ask me to come on and to talk about it and whatever. So I thought that was kind of funny. But they, since then they've kind of gotten. Yeah, yeah, it's good for sure. Since then they've, they've kind of found, I think a, a little bit of a. Just trying to balance it out. Right. Cause I think it's created a lot of pressure on local housing affordability and you know, obviously that's not politically good. And so they, I think they've walked it back a little bit. But then you're starting, you, then you were starting to see a lot of the demand shift over to Spain and Spain I think added a hundred percent tax reform investment or they proposed it. So, you know, a lot, you're starting to see like a lot of populism and like defensiveness against some of these, these policies. Italy seems to be the one where, I mean they have so much vacant real estate and they have reasonably favorable tax systems not compared to Spain and Portugal for your digital nomad types, unless you fully move your economic life to Italy, I think. But Italy really stands out to me as one that could, you know, could have some potential. Like it has a really strong brand. You know, there's, there's massive diasporas of Italians in, in North America that would consider going to get a cottage there instead of maybe Florida or Mexico or whatever. Yeah, I guess maybe that. I'll use that to segue to sort of the next question. We've talked about the demand side. So mostly North American users, where are they looking? For the most part, right? Like where, where what seems to be the markets that, that get the most search activity from here.
- [15:59]
B
So in terms of, especially if we focus solely on, on North American customers, I would definitely say it's kind of mixed because people who are looking to maybe, I don't know, get away from the US dollar or invest in another currency, they will be looking at Europe, most likely the same countries that we mentioned, mostly Southern European. And France is also a very strong contender. I would say it's like switching places between some of the, some of the other three that we spoke about. On the other hand, I would say that maybe the, I wouldn't say more brave, but definitely the younger crowd, digital nomads, remote workers, for very understandable reasons, are also choosing Latin American countries. Starting from Mexico and ending all the way, all the way at the bottom in Argentina for fairly obvious reasons, because the quality of life is much better. Your dollar or your euro or whatever will go way further in Latin American countries. So if you look past these negative headlines on news outlets, I think there's much more to it. I have, I would say a ton of experience with Latin America and I don't consider any of these countries any more dangerous than all the capital cities in Western Europe for example, and also including many, many United US Cities as well. So, so they maybe get like this bad press, but at the same time people who have traveled there actually understand why it's good. And I think there's a lot to do with people who are still actively working on a day to day basis. You can't argue the fact that you are in the same time zone and that matters a lot if you have to be online from nine to five or eight to six or whatever. So I think that's one of the drivers as well. Plus the affordability that I mentioned, like being in whichever big city in Latin America feel, doesn't feel all that different in a sense than being or living in a, in a, in a large city in North America. So I think the affordability part, you can, I don't want to say this like cliche of you live like a king, but at the same time you do get a lot more for your money's worth. And I think a lot of investment is focused towards Latin America as well. Yeah, yeah, yeah.
- [18:11]
A
I think it's like proximity as well. I mean if you get start to get deeper in Latin America, the flights from the US start to become about the, the same as, or you go to South America rather than Central America, the flights end up being the same as going to Europe. And some people might prefer that, you know, if you're already dealing with a cultural difference or whatever. But I think like Central America and you know, even Mexico, for a lot of US consumers, they seem to be very popular. You know, if you're looking to get, get into the sun, you don't want to spend half a mil on a condo in, in Miami or whatever. And you want, you know, Costa Rica has been really popular, although prices are creeping up there quite a bit. Panama, we've had it. We have an expert who comes on the show pretty often to discuss Panama. Are there any countries that stand out to you that you know, that feel like they're, you know, in a position relatively well from, from an investment perspective? I know prices have come down a little bit in some of the markets like Mexico, especially like Tulum. I know, you know, it was good and then prices started to drop pretty substantially. You know, after the pandemic. Everybody was in like, everybody was in like Tulum or Miami or Portugal during the pandemic and now, you know, it's, the demand sort waned a little bit. Anyway, sorry to, to, to reposition. The question is, is there any market that, that you like Right now, like that you, that stands out to you.
- [19:30]
B
Do you mean in Latin America specifically? Or.
- [19:32]
A
Yeah, let's say Latin America first and then we can. Yeah, like if you had to pick one in Latin America and then we can, then we can maybe pick one in Europe too.
- [19:39]
B
So trying to be not biased because I do have my own preferences which aren't solely based on, let's say the latest data number or latest rental yield rate. So I don't think that any of the countries are undervalued at this point because like a lot of real estate, especially during COVID has gotten a lot of attention. There aren't too many undervalued markets left. We will get to one of them. One at least that I think of now if we, if we, I think like in terms of the countries that might have a lot of potential. Now this is my personal opinion, we don't even list this country actually on our website because they don't provide enough data for us to do so. But I think Paraguay is definitely undervalued because Paraguay has a lot of. It has a lot going for it specifically because of the taxation system. The, the way it is quite easy to get residency, obtain residency and you don't have to be there, let's say 186 days out of the year for you to keep the residency. So I think that's one of the ones. Although it isn't this like kind of beach resort destination like Tulum would be because it's a landlocked country. Definitely an honorable mention to Colombia because I think there's still more room to grow. Although the yields have dropped, I would say the growth trends and yields have dropped by, I would say 2 to 3%, specifically in Bogota and also in Medellin. So these are also two markets that I keep an, I keep like an eye out for. In Mexico City the prices have increased quite a lot. So that means the rental yields are coming down even though the demand is there. I think Mexico City is also a very good opportunity, more maybe so for institutional investors because of what Mexico as a country represents specifically being a neighbor to the US how much value is created there on an industrial level and so on. So I think a long term vision for Mexico City is definitely positive. Panama has been flying under the radar a bit specifically after the leaks. Panama was always known as this like kind of tax optimization location. But I think it has a lot to offer. And since I have first hand experience in Costa Rica, even though the yields are good, I can say that the market is not liquid at all. We're actually selling a property in Costa Rica right now. So the market is quite slow. The interest is relatively weak, specifically from North America because these would be the main customers. So yeah, it's, it's a, it's a mix of many different things and people who are looking for riskier investments. I have to give a shout out to Guatemala, Nicaragua and Venezuela because in countries like these, obviously the risk is going to be extremely high, but at the same time the reward can be great because you cannot find seafront properties with, with similar pricing as you do in, in these three countries. So, so if you want to as like a small, small percentage of your portfolio, I would definitely consider maybe doing a riskier investment somewhere there. It might pay off very well in the future. So that's my, these are my two cents at least. Regarding Latin America, when you say risk,
- [22:44]
A
like, do you mean more political risk or economic or I guess is it kind of both? Yeah, yeah. Like, why not?
- [22:50]
B
Yeah, because like, let's be honest, Nicaragua, Guatemala, and when it's really a, might be a different story. But the other two Central American countries, they don't have like this great relationship with any of the European or North American countries. So because they are, they have a very different mindset and very difficult political status and they side to other countries. So that's why I think it can be considered as a riskier investment.
- [23:14]
A
Yeah, yeah. I mean, I think there's like this famous story, it was a while ago now, like 10, 15 years ago, but Guatemala took like, took back a piece of mining land from one of the largest mining companies in the world, Vale Inco. And you know, you know, so if they can do that, like, you know, is your, is your security. Do you really have security of tenure as a real estate investor? Which I think, you know, this is one of the primary headwinds that people think about when they're investing globally is, you know, we, we come from the US or Canada or even many parts of Europe where, you know, you have very old, strong land registry systems that are organized and secure and in, in some places you don't really get that. I mean, we, we just had somebody on in from the African market and we've had an expert on from Malawi before. And, and you know, they, they're just starting their land registry system. So when you get a piece of land, you have to purchase it through like a tribal system and it has to get approval of the chief and then it gets moved into this new land government land registry system. But during the period of time when there's a period of time where you basically have to protect the land. Like, you have to pay, like, guards to guard the land so that nobody can go and encroach on it and just basically like steal your land. And I think that, you know, it's really easy to look at a place in the world and just say, oh, this beautiful, you know, it's cheap. But are there, is there a reason why, you know, that you're not the only person you know? Yeah. So I think that's, that's, that's interesting. Let's move over to, to Europe then, because I feel like that's where you maybe do get a little bit more of that security. And, you know, I mean, there's obviously some geopolitical stuff going on there. I think there's a lot of. Seems like populism around, like, issues with migration and crime and whatever. But other, other than that, I think from a, from a land registry system seems to have it together. What would be your, your, your rising stars for. For the European markets? I know you mentioned a couple already, but, like, is there any that you, you know, if you were, if you were shopping in the next year and you didn't care what country you were in, where would you be trying to put your money?
- [25:16]
B
It all depends on if I want a really safe lifestyle, investments, or if I want something that's a bit more riskier, but the world will be much, much greater. So any of the countries that I mentioned before in regards to Europe, I don't think these are like, necessarily very good buys anymore because at some point there will be a ceiling. Now another country that we don't include on our website for the same reasons as we don't with Paraguay is. I think Albania is one of the countries. And the reason why I say Albania is that they are, I can't say similar. They, they can be culturally very different, but they are location or geographic, geographically, they are very based at the same. They are at the same place. So basically at the Adriatic Sea. So why I like Albania is my, like, personal opinion on it is that Croatia is a very established tourism destination. It's highly popular for Europeans, also rising in popularity for North Americans and also for other parts of the world. So. But Croatia has gotten extremely expensive. I would say that your vacation costs can be very similar to what you find in south of France, south of Spain. Croatia used to be this cheaper destination where a lot of people would travel to. Now after that, after the, I wouldn't say a decline Because Croatia is still highly popular in terms of tourism. But then we saw another country pop up, which is Montenegro. So Montenegro followed the path of Croatia, but I would say it was roughly five to seven years behind. And now the prices are going up in Montenegro as well. So the next logical follow up would be Albania because it offers everything that everything is very similar to the other two countries. They're actually kind of neighbors. Even so I would say Albania, I would definitely give a shout out to that country. There are like, you can still purchase properties. There are no limitations to foreigners. Having experience in Greece and knowing a lot of stuff about many other southern European countries. The bureaucracy, the paperwork, everything in regards to how long things take time. This is going to be the main bottleneck I think for Albania. So there will be some sort of risk as well, especially specifically related to that. But I think Albania is, is one of my go to countries, at least for now in terms of real estate investment. Now if, if, if I would want to keep my money safe, I would say, I wouldn't say like the yields are bad, however they aren't as they don't have as much growth potential. I would definitely look at like long term established countries such as Poland for example, not necessarily central Warsaw, but other bigger cities as well. Poland is a huge country so it has a very strong industrial presence similar to Mexico. They produce a lot of stuff. So the fundamentals are right. It's a growing economy, the population is also growing. So that's why I think you noticed as well the trend is that I'm actually favoring Eastern European countries. And that's also for a reason. Because now without getting into politics, I think, I do think that there can be an immigration issue in Western Europe which might lead to, obviously it's going to create like housing shortages as well. But we don't know how this is going to play out in the next five years. So that's why I think there's a lot of, a lot more growth potential in terms of real estate investment definitely in southern, southern European countries, specifically countries like Romania, Bulgaria, Albania. If you, if you, if you have the patience to make things work over there, if you have enough contacts, if you go there, look at the properties yourself. I definitely think these, these are the countries that, that will thrive in the next five to 10 years. Also an honorable mention to our neighboring country of Latvia. So we, within the three Baltic states that we, I think Latvia is the only one with a lot more room to grow. I think Estonia and Lithuania are already quite established and actually kind of overpriced. So if you're looking for something a bit more up north, I think Latvia is a very good shout. And in regards to the geopolitical risks, these will always stay. So I don't want to voice my opinion that loudly on what's going to happen because nobody knows. Time will tell. But at the same time, we're all part of NATO. As long as NATO exists, I think we'll be fine. So I don't see this as a huge threat either. So that's my opinion at least on, on Europe current situation.
- [29:48]
A
I really appreciate it. I want to be mindful of your time because I gave us a sort of a. I give you kind of an idea of how long we would be on the episode. But I'd love to have you back. Like I know you guys put out a monthly market report even if you want to come on and do that, you know, even on a monthly basis and try and drive some traffic because I think there's some excellent insights in there. We could kind of zoom in on the data a little bit and I think that would be fun. Do some screen shares. But also, you know, we, and we, you and I can chat about that a little bit after the recording. But the, you know, if somebody wants to connect with you, where would you like them to do that? Like, you know, they should they just go to Global Property Guide. Should I, should I have them Send to your LinkedIn? I'll put the links in the show notes as well. For anyone?
- [30:29]
B
Yeah, my LinkedIn profile make comments. I think that's one of the, one of the places you can reach me or you can email me@micklobalpropertyguide.com it's where I'll selise my first name@globalpropertyguide.com Feel free to reach out, ask any questions. If you're interested in what we're doing, definitely feel free to subscribe. You can do it either on a monthly basis or if you subscribe as on the annual plan, you also get access and you can download a lot of our content. So you can download spreadsheets full of data. You can use it for your own. For your own, for your own, like research, you can use it as an institution. So many opportunities. Feel free to check it out and if you have any further questions, I'm always available. So yeah, awesome.
- [31:10]
A
Yeah, I'll definitely have you back because I think your wealth of knowledge and the product you've built is great. So that's obviously why your wealth of knowledge and we'd love to continue having on having you on the show. So thanks a lot for your time. I really appreciate it.
- [31:22]
B
Yes, thank you, Daniel. It's been a pleasure.