Retirement On The Pampas
July 18, 2010, Paris, France: Retirement to Argentina means a life of wide-open spaces, good food, and great wine.
Dear Overseas Opportunity Letter Reader,
"The older I get, the more the idea appeals to me," remarked an old friend over drinks the other afternoon. "I've always thought we'd return to the States when the time came for retirement, but, more and more, I'm drawn to the wide-open spaces of Argentina."
My friend and I were sitting outdoors at a café across from the Seine, sipping champagne and watching the river. It was 7 p.m., but the sun shone bright. This time of year in this part of the world, it doesn't set until well past 10.
My friend, an American, has been living outside the United States with his family for more than 15 years. For most of that time, they've been based in Paris. Several years ago, though, my friend bought a piece of land, with an old hacienda, in Argentina. Since then, he's been trying his hand as a cattle rancher on the pampas. And the idea has grown on him.
"We'll continue to return to Paris regularly," he continued, "and we'll keep our apartment here. But, when I think about my retirement years now, I imagine myself on horseback, riding out each morning to check on the herd or maybe to mend some fences.
"A friend has also purchased a ranch in the same province of Argentina as ours. I can see us meeting up for long rides and then later, back at the house, for an asado.
"I enjoy the way of life down there. Days spent on the land, tinkering with improvements to the property. Evenings spent around the fire. The food, the wine...I've really begun to look forward to it..."
Kathleen Peddicord
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Time For Plan B
In the United States and elsewhere, this is shaping up to be the retirement era of scraping by and making do.
But not everywhere. In some key spots, not only can you maintain the standard of living you enjoyed during your hard-working years...you can improve it!
You can live better than you ever did "back home."
By the sea...in big cities...in small colonial towns...sometimes, even, on the edge of nowhere...
Here's your road map to the world's top Plan B retirement options right now.
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P.S. What else this week?
- "It's not surprising that Malaysia has become a recognized international medical tourism destination," writes Asia Correspondent Wendy Justice. "It boasts some of the least expensive health care in the region. Costs for many treatments are lower even than in neighboring Thailand. The cost of health care in general is so low that many people don't bother with the expense of health insurance.
"Of course, cost is only one part of this important issue. Cheap medical care is no good to you if it's no good. That's not the case in Malaysia, where the quality of care can be of the highest standards.
"Here are some particular examples to give you an idea just how affordable medical care can be in this country..."
- Your retirement nest egg has been marginalized, and you're thinking there's no way you could afford to retire overseas.
This is probably the most-often-given reason for why someone who's interested in the idea of launching a new life in a new country hesitates or even abandons the idea altogether. And it's the least valid.
Here's the truth: You can't afford not to retire overseas.
I'm speaking both literally and figuratively.
Let's begin with my literal point. You could retire toCuenca, Ecuador, for example, and enjoy a comfortable life in a safe, pleasant colonial city on a budget of as little as US$700 per month if you own your own home. If you don't, you could rent a "local-style" apartment for as little as US$200 a month, making your total monthly nut as little as US$900 per month.
- "One week into my recent trip to France and, wham!" writes France Correspondent Jann Seal. "I was on my back with a fever and other disagreeable happenings.
"The flu.
"I dragged myself down to the local pharmacist. In France, they're easy to find. Just look for the green cross on a sign above the door. I found one on a building in the center of town that signaled someone who at least understood sickness was on duty.
"The lady pharmacist seemed to read my expression as I fell through the door. She attempted to diagnose me more specifically by asking questions in French (of course). I was no use. My ability to produce any French in response was lost in my fever..."
- "Can you still find property for US$50,000 or less?"asks Overseas Retirement Letter Editor-in-Chief Lynn Mulvihill in the current issue.
"That was the initial challenge I set for myself for this month's issue. Only I didn't leave it at that...
"Of course you can find a building lot for less than US$50,000. And, if you look, you can find plenty of opportunities for small renovation projects for relatively small change...and closet apartments in fallen-down suburbs across the globe.
"But can a retiree find a comfortable home, in move-in condition, in a part of the world where he might actually want to spend time, for less than US$50,000?
"Those were the criteria for my search for real estate to feature in the property section of this month'sOverseas Retirement Letter (in production now) Iturned up interesting results..."
ALSO From Global Real Estate Investing Guru Lief Simon:The perfectly diversified international real estate investment portfolio might look something like this:
- A rental property in Europe that is leveraged (that is, carries a mortgage...remember that it's possible to borrow for the purchase of real estate as a foreign buyer in many European countries) and that generates positive cash flow. Right now France, Italy, and Portugal make the most sense for this kind of investment. This is a long-haul play, and, thinking very long term, I like Paris.
In Paris this month, I'm reminded that this is the closest thing to a recession-proof rental market as you'll find. France is perennially the world's most touristed destination. This season, thanks to the Greenback's strength against the euro, tourism in is way up throughout the country and especially in Paris. The rues of this city are crowded with camera-toting, guidebook-carrying visitors, many of whom choose short-term rental apartments over hotel accommodation. Our rental manager assures us that, right now, short-term rentals are in greater demand in the French capital than they've been in some time.
All markets cycle, including the Paris rental market. But, again, this city is as close to a sure-bet for this kind of investment as exists.
- Next, a rental property in a resort location. Right now, I like the Philippines for this.
- Then, a rental property in another active market. My top recommendations today would be Panama City and Buenos Aires. Neither is as recession-proof as Paris, certainly, but the Panama City rentals market continues to boom (I'm netting 12% per year from my downtown rental) and B.A. is a city that generally always attracts its share of visitors needing a place to lay their heads temporarily.
- Then, raw land. For this, again, I like Panama. Frankly, if your property investment portfolio doesn't include some holding in Panama, you should look to fix that this year. This country's property markets (rentals in Panama City, development lots, and raw coastal land) offer both safe haven and serious upside.
For raw land investments, I also like New Zealand and Honduras.
- Finally, if you can find an opportunity for one, I recommend including in your portfolio a direct investment with a developer. This could be a straight equity investment in a development or what's referred to as a "hard money loan."
Equity is self-explanatory. A hard money loan is when you lend cash to a developer who needs some (don't they all?). Usually, your loan is collateralized by land, and you are promised a return of your capital plus some premium typically great enough to make the undertaking worthwhile from your point of view. A developer might offer you a return of 25%, for example, within a specified period of time, say, 12 months.
This portfolio would give you 6 to 15 properties in perhaps 4 or 5 countries. It'd bring you diversification of market, of currency, of type of holding, and of exit strategy.
And it represents all four strategies I recommend you employ: buying wholesale, path of progress, crisis investing, and real productive assets.
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The Buyer's Market Of Our Lifetime
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