Feb. 2, 2010
Panama City, Panama
PLUS:
- Take Your Pick In Thailand...It's All A Delight...
- Recession Buys In Spain...
- "Kathleen, I Am Feeling Lucky That I Clicked On Your Site Today"...
- Ecuador By The Numbers...
- The Truth About Non-Titled Land In Panama...
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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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Dear Live and Invest Overseas Reader,
Our Mailbag overfloweth...
"I have been working and living overseas on and off for years, mostly in the Middle East. What do you think about
Thailand? And where in Thailand? I find the Thai people very easygoing."
-- John D., United States
Intrepid Correspondent Paul Terhorst replies:
"We divide Thailand into three parts. First comes
Bangkok, with its 10 million or so population, in the middle. Most people fly in or out of Bangkok, and that's where the big-city, fast-paced, late-night action happens.
"Down south is zone two, the
gorgeous beaches at Phuket, Ko Samui, and so many other places.
"Up north, where Vicki and I live, is zone three: historic
Chiang Mai and the surrounding area. Up north you move slower, you tend to walk rather than ride, and life is cheaper than in the other two areas.
"Take your pick. It's all a delight."
More here.
"Kathleen, I've been reading your daily mailings for over a year now. One country I'm surprised never to see mentioned is
Spain. Since the Spanish real estate crash, isn't this the perfect time to make a move there? With all the talk in your columns about infrastructure, culture, climate, and recreation, it seems Spain would be the perfect place. What are your thoughts?"
-- Greg N., United States
Euro-Correspondent Lucy Culpepper replies:
"At the beginning of December 2009, one of Spain's biggest banks, Caixa Catalunya, published a report stating that, in their opinion, housing prices would not fall any lower. Just a few days later, the property consulting group Aguirre Newman published their report, stating the opposite: 'The residential property market in Spain has not yet reached bottom and could drop another 27% in 2010.'
"Aguirre Newman's report, 'Coyuntura Global del Mercado Inmobiliario Español,' also showed that overall property transactions in 2009 dropped by around 41% compared with 2008 and warned that bank valuations continue to overestimate the true value of property in Spain.
"The report goes on to warn that the sale of huge stocks of repossessed homes by the banks, including Banco Santander's €4.1 billion of property assets, and the purchase of unsold homes by regional authorities (with the aid government grants) will only serve to keep the housing situation in a depressed state.
"At the time of the report's publication (December 2009), there were 520,000 secondhand homes for sale, 610,000 unsold new homes, and another 380,000 in the completion stage of construction.
"So does that make Spain, as a whole, a good place to buy? Yes, probably. Friends in the country interested in selling are being forced to lower their asking prices below original purchase prices (despite having carried out extensive reformation work). I've also had a brief conversation with an agent in the Granada province of Spain, who confirms that, yes, there are good deals to be had right now.
"Recession sales via banks and agents are available throughout Spain. I would look for properties in areas with more fluctuating populations, for example along the
costas and perhaps in those areas where North Europeans bought back in the property heyday in this part of the world. Google 'Costa de Luz,' 'Costa Tropical,' or 'Costa Verde' (northwestern Spain), and you'll find many listings described as 'Reduced for Quick Sale.'
"Today I saw a beautifully refurbished village house in the Granada region of Andalusia that had been reduced in price by 40,000 euro (
http://www.tropicanaproperties.com/ ).
"I would be wary of buying anything that was a new-build or anything still under construction. The legal tangles could be endless.
"And, yes, dear reader, you are absolutely right in saying that Spain has great infrastructure. Lots of grants made by the European Community brought Spain up to the standard of the UK, France, and Germany."
Editor's Note: In fact, we have reported on Spain. Lucy has filed a complete guide to living in
Almuñécar.
More here.
"Kathleen, I am looking forward to
exploring the opportunities laid out in your newsletters, periodicals, and reports. For me, this is an exciting time. I am really hoping that your publications can expand my horizons and demonstrate what and where and how I could spend some quality time in new and exciting locations around the world for the next many years.
"I am feeling lucky that I clicked on your site today."
-- Dave C., United States
"I have seen the
budgets you include on your website and want to thank you for posting them. I have a few questions, though, to do with the standard of living a person could expect in
Ecuador.
"First, what is the salary range in Ecuador for an average worker, an attorney, a doctor, an accountant, and a front-desk clerk at a hotel?
"Next, what is the cost of a private elementary school education?
"What is the cost of dinner out at a four-star restaurant?
"I am just wondering about ballpark figures, whatever quick answers come to mind. These answers, along with the Ecuador budget on your site, will help me get my bearings. Thanks."
-- Randy K., United States
Ecuador Correspondent David Morrill replies:
"An average worker in Ecuador earns US$3,600 to US$4,800 annually. An attorney earns US$15,000 per year. A doctor with a basic family practice makes US$40,000 a year. An accountant earns US$15,000 annually. A front-desk clerk at a hotel would be considered an average worker (and make US$3,600 to US$4,800 a year).
"Tuition for a private elementary school would be US$150 to US$200 per month for a nine-month school year (including transportation).
"Dinner at a four-star restaurant costs about US$12. A filet mignon at a good restaurant might be US$9 or US$10."
"Kathleen, we met in 2006, at a seminar in Puerto Vallarta, and we are delighted to have just rediscovered you. We purchased your
Panama Manual yesterday and found it very helpful. However, we still have questions about ROP property purchase in that country.
"Simply put, is it even theoretically possible, given sufficient due diligence and good local legal council, to buy ROP [
rights of possession] land safely? Given the recent legal changes that seem to improve the potential to title ROP properties, this seems like a very tempting idea to me.
"Thanks for any help or guidance that you may be able to send and best regards."
-- Keith S., United States
Resident global real estate investing expert Lief Simon replies:
"Keith, you can break rights of possession property in Panama into three broad categories that I know of.
"First is land that a Panamanian has been occupying and working but that belongs to the government. Perhaps the government encouraged him to move out into the countryside to work the land years ago, and the farmer has earned rights over time in return for his labor and the fact that he's been living on the land. However, in nearly every case like this one, you'll find that, even though it is within his rights to do so, the farmer has never bothered to title the land. This requires an investment--a government fee, which is generally nominal, plus an attorney's fee, which is maybe not so nominal. Bottom line, these guys just don't have the money to formalize their rights to the land they're working. Plus, they don't see any reason to go to the trouble.
"The next category of ROP is titled land that has been occupied for some time by someone other than the rightful owner. In some cases, the squatter may erect a structure or make improvements, resulting in what amounts to rights of adverse possession. The land has a rightful owner who holds title, meaning its ownership cannot be transferred other than by that owner. This is the case typically in Bocas del Toro, where, decades ago, the banana (or other fruit) companies held title to the land. When the banana trade fell off, they abandoned their property. Others moved in, building houses, putting up fences. Now these squatters hold rights of possession. Still, though, the titled owners exist, even if they remain at large.
"The last category of ROP is the one affected by the new regulations related to the former maritime zone that you mention. The maritime zone (that is, the federal zone at the ocean's edge) was changed last year from 200 meters to 22 meters (10 meters of public right of way, or
servidumbre, plus 12 meters of maritime zone). The 178 meters between the old line and the new line can now be titled. Before the law revision, no one knew which government agency had the authority to title the land, so, even though the land was title-able, it wasn't possible to have a title processed. This has changed now.
"Note that this former maritime zone land is title-able to the owner of the land immediately behind it. Often you'll find that this owner hasn't titled his adjacent land either; he simply holds rights of possession for that property, as well. Now this owner must have his entire parcel titled, including the 178 meters of former maritime zone.
"To say that this can get complicated is a polite-company way to describe what you might have to go through to walk away from a deal with clean title to formerly ROP land. Is it worth it?
"Never in case #2. I say steer clear of any land held by adverse possession. No exceptions.
"Otherwise, if you proceed carefully and protect yourself, buying ROP can be a way to get a smokin' deal on prime real estate.
"I've been told by one attorney I work with (but never confirmed) that a foreigner can't hold rights of possession land in Panama. That may be true, but it's irrelevant. You don't want to hold ROP land. You want to buy ROP land because it can be super-cheap and then have the seller title the property before you take possession. This is where you have to protect yourself. Typically, you'll have to front the seller the money to hire an attorney to handle the titling process and to cover the government fees. The risk is that, once the seller has title in his name, he could breach your contract and try to sell the now-titled land to someone else for more money.
"Bottom line, it's never easy and always carries risk, but I've purchased ROP land and had it converted to titled property (that I now hold). Most city attorneys have no experience with ROP land, and many won't represent you if you're interested in doing what I'm suggesting. You'll need to find an experienced attorney in the province where you want to buy."
Kathleen Peddicord
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Panama Without The Sugar Coating
No marketing hype, no rose-colored glasses.
That's the promise of the
Panama Letter.
Panama is right now the world's top retirement, investment, offshore, and doing business haven. To get the most out of this little country with such an abundance of upside right now, and to determine
which opportunities might be right for you, you need to know the full story. You need to understand all the facts, straight, complete, and current.
This is Panama without the sugar coating. From a team of expats, investors, and businesspeople with, together, many decades of experience spending time and making money in the Hub of the Americas.
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