International STR hosting: has anyone expanded to properties outside the US?

Category: Off-Topic & Lounge

By: James Wu

Posted: 2026-01-04T23:32:10.825Z

I've been hosting in the US for 3 years and thinking about buying an STR property in Mexico, Portugal, or Colombia. The property prices are much lower and projected yields are strong. Has anyone here expanded internationally? What are the challenges with: - Foreign property ownership and legal structures - Getting financing - Remote management from the US - Tax implications - Currency risk

Reply by David Okafor:

I own a property in Tulum, Mexico AND 3 properties in the US. The reality is more complicated than you'd think from watching YouTube videos about cheap Mexican real estate. Ownership in Mexico: foreigners can buy property, but within 50km of the coast or 100km of a border, you have to use a "fideicomiso" — basically a bank trust where a Mexican bank holds the title on your behalf. Runs about $500-600/year in trust fees. It sounds sketchy but it's totally standard and legal. Outside the restricted zone you can own directly. Financing is the pain point. Mexican banks generally won't lend to foreigners, so most people pay cash. There are some US-based international lenders (Global Mortgage Group, MoXi) but rates are 8-12%, way higher than US mortgages. A lot of investors just do a HELOC on a US property to fund the Mexican purchase. You absolutely must have boots on the ground. A bilingual property manager is non-negotiable — expect to pay 20-30% (higher than US because there's more hand-holding involved). Internet reliability varies wildly so check actual Speedtest results for the specific neighborhood, not just the city. And guest expectations are different — international travelers expect different amenities than domestic US guests. Taxes get complicated. Mexico charges ISR (income tax) of roughly 25-30% on rental income. You need a Mexican tax ID (RFC). But you also still owe US taxes on worldwide income as a citizen/resident. The Foreign Tax Credit (Form 1116) prevents double taxation — what you pay in Mexico offsets your US bill. This is absolutely NOT DIY territory, get an international tax CPA. My Tulum numbers: bought for $180K (2BR condo), grossing about $38K/year, expenses run around $15K (PM, maintenance, trust fee, utilities, taxes), netting $23K. That's a 12.8% cash-on-cash return — way higher than my US properties. But it's also way more hassle. Different legal systems, communication barriers, and occasional "surprises" that would never happen stateside. Profitable but definitely not passive.

Reply by Michael Thompson:

For anyone considering **Portugal** — it's become THE hot market for US expatriates and STR investors. Here's the key info: **Ownership:** Foreigners can own property directly in Portugal. No special structures needed. Simple compared to Mexico. **The D7 Visa / Golden Visa angle:** - Portugal offers residency visas for real estate investment - Golden Visa (being reformed): property investment of €500K+ in certain areas - D7 Visa: passive income visa — show ~$1,500/month passive income and you can live there - Both can lead to Portuguese citizenship in 5 years → EU citizenship → free movement in the EU **STR regulations in Portugal:** - "Alojamento Local" (AL) license required for STR - Lisbon and Porto have SEVERELY restricted new AL licenses (caps in tourist areas) - Algarve and smaller cities are more permissive - Tax: 35% flat rate on rental income OR standard progressive rates **Financing:** - Portuguese banks DO lend to non-residents: 60-70% LTV, rates around 3-5% (lower than Mexico!) - Process takes 1-2 months, lots of paperwork **Currency risk:** Euro/Dollar fluctuations. Revenue in EUR, and you want to spend/save in USD. **My recommendation:** If you're considering international STR, start with ONE property, pay CASH (simplest), hire a LOCAL property manager, and expect 6-12 months of learning curve. Don't scale internationally until the first property is running smoothly. Portugal is more organized and less risky than Mexico or Colombia for US investors, but Lisbon/Porto regulatory restrictions are real.