14Where Tourists Rule

The most obvious place to target for your first overseas property buy is an active tourist market. Not only is it easier to project and to feel confident of rental cash flow in a market with a track record, but active markets have established management industries and infrastructure, making it easier to connect with a rental manager and to outfit your purchase for rental.

We've made the point elsewhere, but it's worth repeating. Favor markets where demand is diversified. A market completely reliant on either foreign or local tourists is riskier than one that draws good numbers of both.

Another key to choosing right when shopping for a tourist rental can be avoiding cookie cutter and opting for something with inherent value. Beachfront is always a winner. Properties within walking distance of local amenities and a golf course also stand out even in a competitive marketplace. Whatever you do, don't buy an apartment in a complex of 300 identical apartments. You're reduced to competing for tenants on price and could find yourself one of a dozen or more owners trying to sell the same product at the same time when you decide to take your exit. Again, the only way to entice a buyer to choose your unit over all the others available for sale would be to lower the price.

Top Tourist Rental Buy #1: Mexico

You know that North Americans like to travel to Mexico to escape winter. Mexico's growing middle class likes to spend time on the country's beaches, too. Hot ...

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