Income and Yields |
Feb. 22, 2009
Panama City, Panama
PLUS: No Money Down On Portugal's Algarve...Life In Ancient
Lijiang...The Key To Shopping For International Health
Insurance...Retire Overseas 101...
How To Retire Overseas
Everything you need to know to launch your new life in the overseas
paradise of your dreams. Real-world, practical, how-to,
Full details here.
Dear Overseas Opportunity Letter Reader,
"I bought a condo on the beach on Ambergris Caye," remarked a friend
over dinner the other night. "I want to generate a little income."
Income...and yields. In the current climate, these have become the
name of the international investing game.
"Belize tourism figures remain strong," my friend continued. "I should
be able to earn a good rental return. Plus, now I've got a place of my
own at the beach to use anytime I want."
Belize, Nicaragua, Argentina, Uruguay, Panama...tourism figures remain
strong in all these countries, worldwide financial meltdown
notwithstanding. So many people--tourists, businessmen, and would-be
retirees abroad--are traveling to Panama right now that hotels, in
Panama City, certainly, but, increasingly, elsewhere in the country,
as well, are routinely fully booked.
Hotels...and rentals, too. We're renting our loft apartment on avenida
Balboa at a rate that's returning about 10% a year (based on the
property's current value...the return is 16.25% a year based on what
we paid for the apartment three years ago).
We would have invested in a second rental in this town...but prices
spiked. We're watching now, though, because this market, like most
around the world, is turning. The past 18 months have been no time to
buy in Panama City. But wait six months longer. Prices are headed
down, and owners are growing more open to your offers week by week.
And that's my point this bright, sunny, Carnaval Sunday morning. The
time to buy is just around the corner in key markets around the world.
You need to be positioning yourself right now so that you're ready to
move when the right opportunity presents itself.
We met a longtime reader for drinks here in Panama City Thursday
evening. He's interested to buy a condo in this city. He knows what he
wants--size, location, amenities. And he asked our advice about what
or where to buy.
"Don't buy anything," Lief advised, "at least not right now. Continue
to do what you've been doing. Research, scout, stay connected...
"Make sure the real estate agents you're working with know not only
what you want to buy but also that you're serious and ready to move
quickly for the right property.
"Explain that you've got cash, plus you're pre-approved for financing
if you decide to go that route.
"In a market like this one, you're a seller's dream. You're motivated,
you're educated, and you're ready to act."
Lief refers to it as "being in the market." You can't wake up one
morning and decide you're going to invest in a rental property in
Panama...or Nicaragua...or anyplace else.
Well, you could, I guess. And you could then proceed quickly to buy.
But, operating in that context, the chances that you'd get the best
deal possible are slim. And the chances that things wouldn't play out
the way you hope are not.
You need to be in a market, as Lief says, long enough to understand
the difference between the local market and the gringo one. You need
to establish relationships with real estate agents and scouts you can
trust. You need to find an attorney who's experienced helping
foreigners to invest. You need the experience of vetting
opportunities...and of negotiating price.
You aren't going to accomplish those things in a single visit to a
country or in a matter of a few weeks.
I say again: Interesting real estate investment opportunities with the
potential for good yields are emerging around the world right now,
thanks to the worldwide financial meltdown...chances for you to scoop
up highly rentable apartments and condos in highly touristed markets.
Specifically, here's where you should be paying attention:
- Panama...this is our number-one choice, not only
in Panama City (where you should not buy today but where you should be
watching out closely for the good deals that are going to begin
presenting themselves over the coming months)...but elsewhere in the
country, as well...full details during our May 14-16
Live & Invest in Panama Conference
- Nicaragua...especially Managua and
Granada (here look at the
Condos de Xalteva, where your 100% turn-key purchase is supported
by rental and property management on site)
- Portugal's Algarve...Euro-correspondent Luis da
Silva reported this week on a second no-money-down property
investment opportunity, this time in one of the
Algarve's top championship golf resorts.
- France, especially Paris, one of the world's most
recession-proof markets. That said, the Paris market is softening, and
the U.S. dollar (if that's the currency you're shopping with) has
rallied against the euro.
This is the best time in years to invest in a yield-producing rental
in the City of Light.
- The Philippines, where we know of an opportunity
to purchase a very rentable apartment for less than US$70,000. First
years' yields (of about 7%) are guaranteed. Full details later in the
P.S. As the current Retirement Revolution builds momentum and Baby
Boomer retirees from the States continue to consider their retirement
options beyond U.S. borders...the opportunity to position yourself for
long-term rental investment yields expands. Increasingly, the market
for rentals in key cities is not only tourists and executives...but
retirees, as well. As one reader wrote recently, "We're ready to
consider retirement choices outside the United States, but, at this
point, after the beating we've taken on our U.S. real estate, we don't
have any interest in buying in another country. Can you tell us where
we should think about renting?"...
P.P.S. What else this week:
Why The Smart Money Is Moving To Panama Now
- Intrepid Correspondent Paul Terhorst writes from the road: "Vicki
and I are in Lijiang's lovely ancient city, in Yunnan
province in southwest China. We're staying at a
popular backpacker's guesthouse, Mama Naxi's, for US$11 a night,
including free Internet. A sign on the wall says, 'Please try to
return to Mama's by Midnight. It is easy to get lost, and the staff at
Mama's will stay up worrying about you.
At the very latest, be back by 1 a.m.
- International insurance expert Kevin Bradley tells you the two
things you need to know about
investing in international health insurance as an
expat or retiree abroad...
- "I need practical advice," wrote one reader this week. "I need
help understanding my options overseas for health care. Can I receive
my Social Security abroad? How do I open a bank account?"
We address these questions every day in these dispatches, but we
understand that reading a response to someone else's question isn't
the same as having your own questions answered in full and in person.
That's why our editors and correspondents are scrambling as I write
to finalize plans for our:
How To Retire Overseas Event.
This is Step 1. This is how you get started. This is
Retire Overseas 101.
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