Geoarbitrage Squared: Don’t buy the dream house abroad, buy the market that funds the dream life instead

Invest in the global stock markets to amplify the power of your georarbitrage opportunities with FIRE financial philosophies

Most expats import the assumption that owning a home equals success. Abroad, the rules change. The smarter play is to fund maximum freedom from the best opportunity available, then use those returns to capitalize on the structural advantages of life outside the US. You then achieve the home, mobility, and a tool to grow your wealth, for the same price.

Two years. That’s how long I was stuck on Bali managing completion of a villa I’d convinced myself was an investment.

But day by day, the hard lessons stacked up.

Construction overruns as the contractor promised “done next month” again and again. Fine print in leasehold paperwork and building permits I couldn’t fully read. Tax complications I couldn’t price into my spreadsheet analysis, and no one mentioned until it was too late. The slow realization that, even if I did decide to pull my parachute and escape, the resale market for my villa was maybe three hundred foreigners, and none of whom were in a hurry to buy.

By the time I had the place running, I’d burned through enough time, mental bandwidth, and forgone opportunities that the projected rental yield, which was never going to hit 6% net if I didn’t overhaul my plan, looked like a small consolation prize for everything else I’d given up. In those two years, and with the $150k, I could have bought a condo in Chiang Mai and wandered Asia with a base. I could have moved to Japan, bought an Akiya, and started a tourism business. I could have moved to Italy, bought a farmhouse, and created a nomad-friendly agro-tourismo.

Or…I could have done any of those three options, or all three options, and not bought the property, ending with more experience, more satisfaction, and higher net worth on the back side, without the responsibility and complexity of foreign home ownership to complicate things. My first mistake was the perspective I went in with, and not seeing that. Not seeing the opportunity I already had.

I’d done the thing that made sense to the American part of my brain. I’d moved abroad, found a wonderful surf village, and wanted a “place,” so I bought a home. That’s what success looks like. Right? That’s what my parents did. That’s what every old-school personal finance book I’d read before then implicitly assumed. Real estate ownership is good, something sound, and something to strive for. That was the implicit assumption.

My mistake was that I hadn’t realized I’d packed those wrong assumptions with me when I left the US.

The American Dream doesn’t translate abroad.

Geoarbitrage as a broad concept, earning in a strong economy, spending in weak ones, is well-trodden territory. This concept isn’t simply that.

This, Geoarbitrage Squared, is narrower and more specific. It’s about how most American expats get the decision of how to handle having a “home” abroad wrong, because they never stop to question the assumption underneath it.

The American Dream, the version sold to anyone who came of age in the US since 1945, has a specific architecture. Career, savings, house purchase, equity accumulation, retirement. Owning a home isn’t just an asset class in that worldview. It’s a sign you’ve arrived. It’s how you signal to your parents, your friends, and yourself that you’ve made it. It’s the marker of unshakeable stability.

When that mental model of homeownership as an imperative is brought across borders, most expats don’t realize it. They land in Chiang Mai or Medellín or Lisbon; they like the place, and the next assumption fires automatically: I should buy a place here.

The problem is the context has changed. The rules underneath the American Dream, why it makes sense, and the possibilities it implies, don’t apply abroad the way they apply at home. They carry the same value or weight. And in most expat-popular markets, importing them produces a worse outcome than the alternatives that quietly opened up once you hopped on the one-way flight. Alternatives arise that you, as a US citizen with global market access, are uniquely positioned to use.

What changes when you cross the border:

• Foreign ownership is often legally restricted, capped, or structured as a long lease rather than freehold
• Net rental yields in popular expat markets sit structurally far below long-run US equity returns, and that’s before the hurdles of foreign real estate ownership and work restrictions.
• Local real estate is priced against local incomes and local opportunity costs, neither of which apply to you. What makes sense financially for locals, in their vacuum, won’t necessarily make sense for you.
• Your most valuable financial asset isn’t the deed to a property abroad. It’s your continued, privileged access to US financial infrastructure, and a conduit to global markets.
  

This piece is about how to think about finding, funding, and “owning” your home as an American abroad — without dragging the wrong assumptions across the border.

The goal shouldn’t be property ownership. It should be maximum freedom, and a life that easily delivers according to your needs and wants.

The goal of life abroad, within the context of geoarbitrage and FIRE, is to cultivate maximum opportunity and maximize the use of your resources to create maximum freedom. The mistake is assuming the path to that goal looks the same as the path your parents took, when they never planned to leave that city, that house, or that neighborhood, and didn’t have the options that one-way flight delivered to you.

So, what do you do?

Reframe the question.

Don’t ask, should I buy a home here? Ask: given my privileges as a US citizen abroad, what’s the highest-leverage place I can put my capital, and how do I use it to fund the life I actually want?

If I want a long-term place, a house or an apartment, here, how do I use my resources to secure that, and more, with minimal long-term commitment, minimal long-term headache, and minimal compromise to the mobility I’ve created?

For most American expats, the best answer follows a structure most people never hear articulated:

1. Invest where the returns are highest, and the investment is most liquid. For US citizens, that’s likely a combination broad US stock market, the highest-yielding at 10.5% per year (nominal return which is before inflation, likely 7% after accounting inflation’s reduction of purchasing power), most liquid market (with stock sales settled to cash nearly instantly) you have privileged access to. No other market combines accessibility, liquidity, and long-run return profile the way the US market does for a US passport holder.
2. Use those returns to fund the life you actually want. That means using those ample returns to rent in markets where local culture, structural factors, and visa frameworks make renting cheaper, easier, and more flexible than ownership would be for you as a foreigner. The ~10.5% market returns exceed the 4% to 6% of the property value you’re paying to rent, leaving a 4.5% to 6% excess return for you, over buying the property, free to reinvest, or pay for a more luxurious life.
3. Treat housing as a service, not an identity. A three-year lease in Chiang Mai, a five-year apartment in Buenos Aires, or a leasehold villa in Bali are tools in shaping the lifestyle you want, not trophies.\

The mental shift you need to internalize: The American Dream of homeownership was a tool built for a specific context, in which Americans lived for decades and died in the same place, housing costs were lower relative to income, and the economics and static situation made sense for the home as a base of living and store of value. That context doesn’t exist where you’ve moved to. Abroad, the expenses of ownership will be higher, your mobility is more valuable, and you don’t need to purchase to achieve the goal of a multi-year home. Abroad, the equivalent tool – a stable base of living – is different. Internalize that, and increase the mobility, resources, and opportunities you have for living abroad.

The structural yield gap: 10.5% from US markets and 4% from foreign real estate

Net rental yields in popular expat markets sit structurally below long-run US equity returns, commonly 4% to 6% for local rental yields as stated before vs. the US 10.5% historic market return. This isn’t a market inefficiency a savvy buyer can arbitrage away. It’s a cultural and structural difference in how households allocate wealth.

Asian households hold 60–80% of their net worth in real estate. American households hold about 25%.

The Asian tendency to hold assets in real estate instead of local market equities or local financial institutions isn’t irrationality. It’s a rational response to weaker and less reliable banking systems, stricter capital controls, intergenerational wealth-transfer norms (real estate being the easiest), and underdeveloped local equity markets. For locals, real estate is one of the few accessible and relatively safe wealth-preservation tools available. Of course, locals bid up the option, being willing to pay more for good real estate, despite its intrinsic value.

I was recently in Nepal discussing paths to FI with a young Nepalese man when he said, “That’s illegal here. We can’t own a US LLC.” The broader, more accurate statement is that he could not, legally, own a foreign company, which means he could not own foreign stocks unless he had a foreign residency, which he did not. All of his investment returns had to come from investments in Nepal. Nepali companies. Nepali stocks. Nepali real estate.

The downstream consequence of locals being locked into investing only in their own country is that in most expat markets, real estate is bid up relative to what it can earn. Then the rental market sitting on the other side of that bid delivers lower returns (that 4% in Southeast Asia vs. 6.75% in the US), effectively making rent cheaper relative to the purchase price, which becomes structurally favorable for someone with US or global equity market access.

You will rarely have the opportunity abroad to buy low and rent it out high. So, instead, you’re letting the local culture overpay for property (from your financial perspective) while you sit in the renter’s seat, with your capital working harder for higher returns in a market they can’t access.

The IRS Tax Angle: Punishes foreign equities ownership, gives a break to long-term US-based stock/ETF ownership

There are two tax angles that reinforce this idea of investing at home (in the US) instead of abroad.

First, the IRS taxes US citizens punitively on most foreign-domiciled ETFs and mutual funds under the PFIC rules. The practical effect: US persons are effectively locked into US-domiciled investment vehicles. Even if you did want to invest in local markets, it wouldn’t make sense. But it just so happens those vehicles that don’t get penalized — the broad US index funds — track the highest-yielding mass-accessible market in the world.

Second, owning and earning income on foreign real estate will almost certainly lead to double taxation. For many forms of income, such as remote work, capital gains on stocks, or pensions, countries have “tax treaties” that decide which country taxes you on what, to avoid double taxing you. However, in most of the countries popular with expats, such as Indonesia, Thailand, and Colombia, the tax treaty specifically states that both countries can tax you on your foreign real estate income. Of course, you will likely get tax credits, but this firstly means that you will need a good cross-border tax strategist and secondly that you will always pay the higher taxes between the two taxes, and you will still be at risk of double taxation. This applies whether or not you are a tax resident of the country you own foreign property in, and is triggered by the property ownership.

By contrast, when you own equities in your home country, as long as you aren’t a tax resident of the foreign country, you generally will not owe tax. Additionally, even if you do become a tax resident, stock market capital gains are generally less likely to be double taxed than the foreign real estate income – so, in both cases, these are generalities, so contact a local tax professional and a cross-border tax professional before you make any plans with potential repercussions.

The bottom line: The foreign ownership constraints and the optimal strategy converge.

Case Studies: Three paths for $300,000

Three ways an American expat can deploy $300K, listed in order of increasing effectiveness.

Path A: Buy a $300K condo in a popular expat market.

Bangkok, Bali, Medellín, Lisbon. Gross rental yields of 6–7% sound good. Net yields after management (10%-15%), vacancy (60% to 80% on average), maintenance (10%), local taxes, and double-taxation friction land at 3–5%. Capital is locked in a leasehold or restricted-ownership structure. Mobility is surrendered, or must work around management, rental, and the needs of homeownership. Hours per month spent managing what was supposed to be passive can balloon quickly. Resale markets for leasehold villas in all these markets are thin and slow (1-2+ years on the market). The visa is often tangled up with the property in ways that make leaving more complicated than arriving.

Path B: Buy a $300K rental property in the US.

Net yield of 4–6% leveraged. Tax simplicity with potential tax breaks, US legal protection, and a USD income stream.

But you’re an absentee landlord twelve time zones away from your tenants. You haven’t actually solved the “where do I live abroad” question. And you’ve concentrated $300K in a single local US market when your job, your income, and your country of citizenship likely already do that for you. Ultimately, this plan doesn’t pave the next step into a true full life abroad as a flexpat or a life as a Sovereign Expat.

Path C: Invest $300K in the broad US stock market. Rent abroad.

Essentially the rentvesting model.

Long-run expected real return historically around 7% (10.5% minus inflation, planned to maintain purchasing power over time, with the overvaluation caveat I’ll come back to). Withdraw roughly $1,200 to $1,500 per month (4.8% to 6% annually) for rent in a quality Southeast Asian or Latin American market. Your capital remains liquid and mobile, as you can sell stocks instantly in an app, globally portable as you can withdraw anywhere, and growing as the markets continually work. You become the renter that a structurally undervalued rental market is, in effect, subsidizing.

You keep your US financial infrastructure access as your financial foundation: brokerage accounts, tax-advantaged accounts, credit, banking.

Now, run the ten-year math conservatively on all three options. Assume a 5–6% real return on the equity portfolio (lower than the long-run historical average, to account for today’s elevated US valuations) and roughly $15K per year withdrawn for rent.

Path A: You’re locked into the property. Exit costs eat 5–10% of value. Capital growth depends on a foreign real estate market with thin liquidity and a narrow buyer pool.

Path B: A portfolio in the low-$300Ks plus rental income, but you’re not actually abroad. You haven’t solved the problem you set out to solve.

Path C: A portfolio approaching $350–360K after a decade of paying rent abroad. Fully liquid. You not only maintained but also grew the capital, and grew your optionality along the way.

The numbers behind the argument

Here you’ll find net rental yields across the popular expat markets, with sources. All prices and rents below reflect a one-bedroom condo or apartment in central, expat-popular districts. The bottom row is the comparison.

Market	Avg. 1BR Purchase Price	Avg. 1BR Monthly Rent	Gross Yield (2025–26)	Est. Net Yield*	Friction for Foreign Buyers	Source
Thailand (Bangkok)	$130K–220K	$700–$1,200	6.05–6.28%	2.5–4.0%	No foreign land ownership; 49% condo cap	Global Property Guide Q3 2025; FazWaz 2026
Indonesia (Bali)	$200K–400K	$1,200–$2,000	7.15%	4.5–5.5%	Leasehold (25–30 yrs) or PT PMA only	Global Property Guide Q3 2025; Bali Home Immo 2025
Colombia (Medellín / Bogotá)	$90K–180K	$500–$1,300	6.87–7.8%	4.9–5.9%	Tax exposure on rental & gains	Global Property Guide Q3 2025; Medellín Advisors 2025
Argentina (Buenos Aires)	$100K–180K	$430–$700	5–7%	3.5–5.0%	Currency volatility, capital controls	Global Property Guide Dec 2025; The LatinVestor 2026
Mexico (CDMX)	$130K–220K	$700–$1,050	5.8%	3.8–4.3%	Fideicomiso required in restricted zones.	Global Property Guide 2025; Wise 2025; The LatinVestor 2026
Portugal (Lisbon)	€280K–450K	€1,000–€1,800	3.8–4.7%	2.0–3.0%	28% non-resident rental tax; high prices	Global Property Guide Q4 2025; Investropa 2026
— The closer-call markets —
Germany (Berlin / Munich / Hamburg)	€280K–500K	€900–€1,500	3.0–5.0%	1.5–3.5%	Rent control; non-EU buyer scrutiny	Finance For Expats 2025; Studying in Germany 2026
Netherlands (Amsterdam, Rotterdam)	€350K–550K	€1,800–€2,500	6.28%	4.0–4.8%	10.4% transfer tax for investors	Global Property Guide Q1 2026; HousingAnywhere Q4 2025
France (Paris / Lyon / Marseille)	€200K–500K	€750–€1,800	3.9–5.45%	2.4–3.9%	Rent control in major cities	Global Property Guide Q4 2025; Homenly 2026
UK regional (Manchester, Liverpool, Leeds, Birmingham)	£130K–250K	£900–£1,400	6.0–10.0%	4.5–7.0%	SDLT surcharge for non-residents	Global Property Guide Q4 2025; Just Do Property 2025
Panama (Panama City)	$150K–300K	$700–$1,500	6.84–7.8%	5.0–6.5%	USD official currency; US tax treaty	Global Property Guide Q2 2026; Panama Elite Homes 2026
Costa Rica (Central Valley / Coast)	$130K–280K	$850–$1,400	7.18–8.37%	5.5–6.5%	US tax treaty; political stability	Global Property Guide Q2 2025; The LatinVestor 2025
— Broad US Stock Market —	n/a	n/a	~10% nominal / ~7% real (long-run historical)	~9.5% / ~6.5% (after expense ratio)	None for US citizens; PFIC blocks foreign equivalents	S&P 500 historical returns

Numbers Notes: Net yields estimated after 1.5–2% deduction for management, vacancy, maintenance, and local taxes. Rent and price ranges reflect mid-market 1-bedroom units in expat-popular central districts; prices skew lower in outer neighborhoods and higher in prime areas like Polanco, Palermo Soho, Casco Viejo, or Amsterdam Centrum.

The takeaway: Most popular expat real estate markets pay 2% to 4% less per year, net, than the broad US stock market, and the underlying asset can’t be sold in sixty seconds without a notary, a visa lawyer, or a foreign tax filing the way stocks and ETFs can.

The exceptions worth taking seriously are Panama, Costa Rica, UK regional cities, and parts of central Europe, which close the gap but rarely beat it on a risk-adjusted basis, and matter more from a lifestyle planning perspective based on emotional ROI.

“But I want to own where I live”

The part most people don’t realize is, in most of Asia, you can’t actually “own” land in the way Westerners think of it. What’s marketed as “ownership” in Bali, in Thailand and Vietnam is, structurally, long-term renting in larger blocks.

• Thailand: foreigners cannot own land. Condos are capped at 49% foreign ownership in any building. Long-term land leases run 30 years with a renewal that’s rarely guaranteed.
• Indonesia: freehold (Hak Milik) is reserved for Indonesian citizens. Foreigners hold leasehold (typically 25–30 years) or Hak Pakai (up to 80 years with renewals). 81.8% of foreign-accessible supply in Bali is leasehold.
• Vietnam: foreigners are limited to 50-year tenure on apartments, with restricted ownership in any given condo building.
• Philippines: no foreign land ownership. Condo ownership capped at 40% of a building.
• Cambodia: The rare exception where you can own a condo outright and can get a second passport that allows ownership of land and houses

What’s actually on offer in most expat-popular Asian markets is a long lease, commonly 25 to 50 years maximum, for leasehold “ownership”. Other multi-year residential rental contracts are common and align cleanly with the renewal cycles of the best long-term visas, Thailand Elite, Malaysia’s MM2H, Indonesia’s Second Home Visa, in 3, 5, and even 10-year terms. With these, you can have your three-to-five-year “blocks of stability” without the capital commitment, the leasehold-expiry tail risk, or the management overhead. You get leasehold “ownership” long enough to feel like the home ownership part of the American Dream Abroad, with payments small enough to deliver the benefits of rentvesting.

And here’s a bonus that doesn’t get mentioned outside of expat communities: A well-structured three-to-five-year lease in Chiang Mai or Buenos Aires offers more functional stability than the typical American renter has. Most US leases run twelve months. Most landlords sell or raise the rent 2% to 4% on renewal to “account for inflation.” As such, most American renters move every two or three years anyway. The “stability of ownership” most expats are chasing is largely available through leasing in many of these markets; in a way, it isn’t available to lifelong renters in the US, and at a lower cost with higher optionality to boot.

The mental model you need to retire to capitalize on the opportunity: owning equals stability, renting equals instability. That equation isn’t true abroad the way many Americans assume it does, based on how things work back home. The structures of multi-year stable leases, available to you as a foreigner, change the value of those variables and how you should prioritize them.

You’re not giving up a home. You’re giving up the illusion that only a specific kind of home ownership matters, which just so happens to be the type that doesn’t actually exist for foreigners in most of these places anyway. Then, you’re trading that inaccurate assumption for a more honest, more flexible, more capital-efficient version of the same thing.

When buying abroad does make sense.

Underpriced-by-value markets. Where the asset is priced below replacement cost or substantially below comparable global markets:

• Japan’s akiya program: Abandoned rural houses available for $5,000 to $50,000, sometimes effectively free under municipal-revitalization programs
• €1 houses in southern Italy, parts of rural Spain, and the Portuguese interior

These work because the absolute capital outlay is small enough that “could have been in the market” doesn’t move the needle. If you can buy a house for $30K, the opportunity cost over a decade is maybe $25K. That’s a number you can rationally swallow for a lifestyle benefit. However, beware that most of these cheap houses require $25,000 to $100,000 just to hit a functional, livable level. Even more, the Instagram-worthy stories you’re thinking of likely Sunk $200,000 into the project over years and hundreds of hours of management, so go in with eyes wide open.

Markets where rental yield approaches risk-adjusted equity returns.

Where the gap narrows enough that the lifestyle premium of ownership can carry the trade:

• Panama: Gross yields 6.84 – 7.8% in Panama City; net 5 – 6.5%. USD is the official currency. US tax treaty in place. Average Panama City property prices around $337K mid-2025. The legal infrastructure and currency match minimize friction in ways most markets don’t. This is still more of a close call than a clean win over US equities, but the friction reduction is significant enough that, for the right long stay and stable expat in Panama, it could make sense.
• Costa Rica: Gross yields 7.84% nationally; Central Valley long-term 6 – 8% net; coastal short-term 8 – 12% gross. US tax treaty. Political stability. Established expat infrastructure. Accessible properties in the $200K–500K range.
• UK regional cities: Manchester, Liverpool, Birmingham, Leeds. National average gross yield around 7%, but northern cities reach 7 – 10% with property prices £130K – 280K. Net yields after landlord taxation and management are still 4.5 – 7%. Strong legal protections, mature institutional rental market, English-language, friction-free.
• Most of Western and Central Europe: Germany at 3–5% gross (1.5–3.5% net) with rent control headwinds; France at 4.84% gross (2.5–3.9% net); the Netherlands standing out at 6.28% gross thanks to chronic undersupply. For these markets, the case shifts from “yield” to “lifestyle plus EU residency optionality.” Sometimes that’s enough. Often it isn’t.

Keep in mind that these assessments, and the benefits, only apply cleanly if you live in that country. If you’ll be abroad during the majority of the ownership period, the numbers degrade quickly.

Citizenship-by-investment programs bolstered by real estate ownership/investment, case by case. Worth considering when your first passport is structurally limiting. Weak passport holders pursuing EU access via Malta or Caribbean program holders chasing visa-free travel upgrades. This approach is usually not worth it for US passport holders, who already hold one of the strongest mobility documents in the world. The math has to include improvements in visa-mobility value, tax-regime opportunities (Portugal’s NHR 2.0, Italy’s flat tax), and inheritance planning over your current situation.

The unifying rule: buy abroad when (1) the yield gap closes meaningfully, (2) the absolute capital outlay is small enough that the opportunity cost vanishes, (3) citizenship or visa access has independent value worth the trade, or (4) you’ve explicitly accepted that you’re buying lifestyle, not yield, and you’ve priced that lifestyle honestly against the alternative.

The rule that fails: I should own because that’s what successful adults do. That’s the American Dream talking. It doesn’t translate.

The risks you need to take seriously

Sequence-of-returns risk

The rentvesting and geoarbitrage squared approaches assume long-run average returns on equities hold at the historical 10% to 10.5%. But you must consider that you will be drawing from your equity portfolio to pay rent in real time, including in years like 2008, 2022, or whatever the next drawdown looks like. A 30% portfolio decline while you’re paying $1,500 a month in rent means selling shares at a discount to fund a recurring expense, and locking in that loss. Every early retiree faces this risk, but it’s sharper for the geoarbitrage expat because rent is non-negotiable and often pegged to a local currency that may be strengthening against the dollar at the worst possible moment. This may apply even more if your portfolio is invested aggressively, leaning towards stocks and aggressive bets in companies rather than conservative bonds and the like.

Mitigations are familiar but worth restating: Hold eighteen to twenty-four months of rent in cash or short-term bonds as an emergency fund plus buffer. Calibrate your equity/bond allocation to your withdrawal phase and risk tolerance as well as risk capacity. Use geographic flexibility to adapt to market conditions and dips, to drop rent during drawdowns by moving to a lower-cost market temporarily, or rebuild after drawdowns by increasing geoarbitrage-based savings and reinvesting that margin to rebuild assets.

The US market may be poised for disappointment.

Many investors and experts feel the US market is overheated, has been for a long time, and is in for a massive market correction.

Whether or not they can actually read the future, this is an important possibility to consider.

As of mid-2026, the Shiller CAPE ratio sits near 41, against a long-run historical average of about 17. That’s the second-highest reading in 140+ years of US market history. Only the December 1999 dot-com peak was richer.

Historically, when CAPE has been above 25, forward ten-year real returns have averaged in the low single digits. At today’s readings, the central estimate lands materially below the long-run 7% real average this article’s math assumes.

This means that, according to the Schiller CAPE ratio, market conditions look more like they did preceding a major dip in returns and portfolio value than they look like normal or good times.

Meanwhile, international markets look comparatively undervalued. Broad international (ex-US) indexes trade at a forward P/E around 17, dividend yields near 3.0% versus the broad US market’s roughly 1.8%. Emerging market indexes trade cheaper still.

The catch-up between the US markets and developing markets may have already started.

In the twelve months ending May 2026, broad international equity indexes returned around 30.5%, outperforming the broad US market’s 27%, and this was the first significant international outperformance in over a decade.

This is the central risk to the rentvesting and geoarbitrage squared approach if you bank on US market returns and dismiss the rest of the world.

If US equities mean-revert toward their historical CAPE averages, a substantial drawdown in total market value, and most people’s portfolios, is possible. The hedge isn’t real estate abroad, as it carries its own risks at lower yields. The hedge is what most good investment advisors recommend: smart portfolio diversification, except in this case not just diversification within the US or developed markets, but across the broad US market, broad international, emerging markets, and bonds, of course sized to your age and risk tolerance. A 60–70% US / 20–30% international / 10% bonds allocation (or whatever the math says for your stage of life) preserves the geoarbitrage-squared thesis while reducing concentration in the most expensive equity market in modern history.

But a crucial fact that remains is that, even at depressed forward US return assumptions of 3–5% real returns (after accounting for inflation), equities still beat the expected 2–4% net foreign rental yields, while maintaining massively superior liquidity, currency portability, and zero leasehold tail risk.

Currency, political, and visa risk

You earn and invest in USD. You pay rent in THB, COP, ARS, EUR. A 30% USD weakening against your spending currency raises your effective rent by the same amount.

The hedges: hold a small allocation in local-currency cash or bonds in your primary base market. Maintain optionality to relocate. Diversify across two or three viable base markets, familiarizing yourself and building the tools needed to function in it as a base, so no single visa change traps you.

US citizenship is itself the ultimate hedge. You can always return. Foreign property cannot do the same in reverse.

“I just want a home”

This is a fair desire. But to maintain a sound financial plan, call it what it is: a lifestyle purchase, not an investment.

Run the numbers honestly, accept the trade-offs instead of dismissing them as possibilities with low likelihood, and don’t pretend the property is also funding your retirement.

The general idea in a sound and optimized life abroad isn’t never buy. The relevant idea is don’t buy by default, because you assumed ownership was the goal. Buy only if it makes sense.

The Bali lesson, restated

What I’d tell my 2019 self.

Not don’t buy. Instead, understand what you’re actually buying, and what you’re giving up to do it.

Two years of mobility surrendered to construction and management. Capital trapped in a leasehold structure with a finite tail. Tax complexity inherited. Time lost to oversight I never modeled in the original yield projection.

If I’d analyzed further and known going in, maybe all of this would have been worth the remote surf village getaway.

The bigger one, the one I didn’t see until later: Don’t solve the wrong problem.

In Bali, I’d packed an American assumption into an Indonesian context and tried to make it work. It didn’t. There is no way it ever would.

The version of me that owned the Bali villa wasn’t the version of me that could later think clearly about the Buenos Aires move. The capital has a job, and it will only do the job and place I assign it to. What the capital gives me back – time, a home, cash dividends, mobility, freedom, or all of the above – and how efficiently depend on the job I assign it to, and the context of the place I put it in.

The Takeaway: Sovereignty over equity

The most valuable asset an American, Canadian, or European passport holder owns abroad isn’t a deeded property somewhere warm. It’s the combination of US financial infrastructure access, the dividends that pay, plus geographic optionality and the willingness to leave behind the assumptions that no longer apply.

Owning property in Thailand ties you to Thailand. Owning a condo in Colombia ties you to Colombia. Owning the broad US stock market, the tech industry, or the World Market ties you to nothing except the funds invested, and the approach still funds everything.

The takeaway in one sentence: the dream of homeownership was a tool built for a specific context. A specific period. A specific society structure that you leave behind when you board the plane.

Devil’s advocate for the later stages as a flexpat: Considering the Emotional Return on Investment

Despite my miserable experience of property ownership as a foreigner in Bali, as I get older, I know I will buy a home abroad. I want a place to store my chrome French press it years to find and my favorite Yosemite National Park coffee mug for quiet mornings. I want a bookshelf covering the entire wall, safekeeping the books I continually reread. I want to paint the walls, drill holes, and bring in furniture I’ll never have to move again.

These thoughts, these feelings, are emotional drivers for creating a situation that runs counter to the numbers above and in every spreadsheet I’ve built.

However,

I’ve lived abroad for 9 years now. I’ve spent multiple years in the cities I love, trust, and keep going back to. A handful of which feel more like home than my home country at this point.

As the financial planner and investor in me runs the numbers on ROI, the salty nomad in me thinks back on the fictitious show Vikings Valhalla and the storyline for the adventurous and curious Viking character, Leif Ericson. Unlike the historical character, the TV show ends for him with a dusty villa in Istanbul, Turkey, filled with books, gadgets, and curiosities from his adventures. He continues to wander the world; he discovers, he collects, and then he returns to the warmth of Turkey and the comforting memories of his adventures. The nomad in me has envied that since I first watched the story.

Since then, my personal approach has been to live via the geoarbitrage squared model, with my assets invested in the markets funding my apartment rental and the excess growing, and a separate pot growing untouched – earmarked for my equivalent of Leif Ericsson’s Istanbul layer.

When I find the place, the pot will finance its purchase.

Is this choice hypocritical? Not quite, but it is emotional.

For the places I have my eye on, the numbers from this article apply fully. If I rent it, I will never receive a “US market-worthy” return…but I will never rent it. When I buy it, I will take on a new tax headache, and have to deal with maintenance and management in a foreign language again. And, undoubtedly, I will stumble upon unknown surprises in the process of ownership.

So, why will it be a financially sound decision? Because thanks to the accrued longing that comes with the light bags of a nomadic decade, the French press, the coffee cup, and the wall-sized bookshelf are “return on investment” enough to compensate for the cash I won’t be earning.

Additionally, when this time comes, the time I purchase, I will make a personal transition back to more flexpat and Sovereign Expat than nomad. My costs will drop to food, utilities, gym, and a social life (under $500 to $600 a month likely), meaning my already FIRE situation and income will far exceed what I’ll need ever again in my new home.

The bottom line: Geoarbitrage Squared and rethinking home ownership vs. liquid market investments is something that you should consider to increase mobility and wealth-building power. However, there is an exception to every rule, and this holds true in a life abroad, which is unconventional by nature. So, once you’ve mastered the rule, lived the life, and are reconsidering, take into account the emotional return on investment in your next phase of a life abroad.

Abroad, the context changes, and the smarter tool is to invest where the opportunity is richest, then use those returns to capitalize on the structural advantages that exist for renters in markets where the locals overpay to own.

Don’t bring the dream. Bring the discipline of asking what works here, given who I am and what I have access to.

The answer, more often than not, is: not the house.