101 Tips for Retiring Overseas

April 29, 2008

Paris, France

PLUS:

n  The Six Best Beachfront Buys You Could Make Right Now

n  The Oldest Castle in France

n  Costa Rica to Nicaragua for $15...Costa Rica to Panama for $26--the Secret of Unbelievably Cheap Long-distance Travel

n  "Margarita Madness"...and Other Syndromes of Living and Investing Overseas

AND:

n  A Deeply Discounted and Private Pre-launch Offer in Nicaragua

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"I was putting what little money I had in Ocean Frontage, for the sole reason that there was only so much of it and no more, and that they wasent making anymore..."

-- Will Rogers, April 13, 1930

Dear Overseas Opportunity Letter Reader,

Will Rogers' investment strategy is as sound today as it was nearly 80 years ago. The trouble is, in the intervening eight decades, people have been aggressively buying up what oceanfront there is. So...what's left for you?

No question, it's harder and harder to find coastline worth owning for sale at prices worth paying. However, our editors have identified six places where the beachfront is both special and under-valued:

1. Panama. You know the many reasons why Panama remains one of the best places to invest your real estate dollars (your retirement and second-home dollars, too).

(If you'd like to remind yourself what's so hot about this country, take a look here: Hot Opportunities- Panama )

The trouble is, Panama hardly qualifies as undiscovered. Could its beachfront possibly, therefore, be under-valued?

Yes, in particular regions. Not within easy commuting distance of the city. These weekend-getaway beaches have been climbing fast in value, trading hands back and forth among both local and foreign buyers for more than a dozen years.

And not in Bocas del Toro, on the Caribbean, where, again, the gringo developers, agents, and buyers have created a bubble for themselves.

Veraguas. That's the place to look right now. This large province about three hours west of Panama City hides the best Pacific coast buys in all Central America.

Plus, remember, Panama uses the U.S. dollar as its currency, meaning no exchange risk.

Interested to know more? Write to: Veraguas@LiveAndInvestOverseas.com.

2. Dominican Republic. Cheapest Caribbean beachfront you can buy today. I'm talking quintessential beachfront of the variety that, for many, defines the word. Soft white sand bordering gently lapping emerald water. The same white sand and emerald water you find at St. Lucia or St. Barts, only way more appealingly priced, be you a would-be second-home owner or a speculator looking to flip quick.

The best opportunities are on the Samana Peninsula. The spotlight is on Cap Cana (where The Donald is developing Trump at Cap Cana). That's why you want to focus your attention northwest (to Samana) instead. This lush, green region boasts more than 20 miles of white-sand coast.

Look specifically around Las Terrenas, today little more than a small fishing village--which is part of the attraction. The expat community here of 2,500 is growing quickly. You can buy a condo right on the beach for $2,600 per square meter or one with an ocean view for $2,100 per square meter. Rentals yields are above average, at 6% to 8% net per year.

Undeveloped beachfront is remarkably affordable. Where else in the Caribbean could you buy prime white sand with services for as little as $40 a square meter? Hillside lots start as low as $20 a square meter.

Questions? Write to: Samana@LiveAndInvestOverseas.com.

3. Uruguay. Like both Panama and the Dominican Republic, Uruguay's beachfront property market is not primarily dependent on American buyers, an important point to keep in mind if you're shopping with an investment agenda today.

In Uruguay, we have two specific recommendations, the first for investment, the second for part-time or retirement living.

First, the investment pick: Rocha province. Tourists and buyers, both, have focused to date on Punta del Este in neighboring Maldonado province. Rocha, to the northeast, has equally attractive beaches. And, as Punta del Este and its surrounding resorts expand, it's these Rocha province beaches to the north that will benefit from the spillover. Furthermore, for Brazilians (who make up a fair part of the Uruguay market) driving south to Uruguay's safe, cheap beaches, Rocha means less travel time.

Second, the lifestyle play: Piriapolis, with its beautiful bay, quaint rambla (or boardwalk), café society, grand old hotels and casino, and first-class marina. Real estate values in Piriapolis will enjoy appreciation, we believe, in coming years; still, the attraction here, really, is the lifestyle. This is a safe, relaxed, friendly place, a throwback to small-town America a half-century ago.

Piriapolis is also home to the only private residential community of its kind in the entire country, the current project of friend David James. David's Sugar Loaf Ocean Club and Spa is not on the ocean, but every resident will enjoy sparkling ocean views, as well as high-end services and amenities...at very un-high-end prices.

Our Uruguay contacts would be happy to tell you more: Uruguay@LiveAndInvestOverseas.com.

4. Ecuador. Ecuador's coastal market, specifically around Salinas, Montanita/Olom, and Manta, is on fire. This is a place to shop for instant investment gratification. Properties, our on-the-scene contact reports, are bought and then flipped the following month for 20%, 30%, even 50% profit and more.

Right...that level of activity rings alarm bells. Keep your wits about you.

In Salinas, buy a condo, either finished or pre-construction, for both capital appreciation and rental return.

If you've got a little more patience, look to more remote coastal regions, where it's possible to buy for as little as $3 to $5 per square meter. This translates to $30,000 to $50,000 for two-and-a-half acres of beachfront property. Beat that.

Remember, though, this is a much longer-term play. You're buying in fishing villages, small, forgotten stretches of coast that will enjoy, our sources advise, considerable appreciation but that right now have no services and no amenities. You won't see the upside here within a month or even a year. In places like Machala, Playas, Manglaralto, Canoa, and Jama, you've got to be willing to wait three to five years or longer to exit.

More from: Ecuador@LiveandInvestOverseas.com.

5. Philippines. Historically overshadowed by neighboring Thailand and Bali, the Philippines, with its powdery white-sand shores, clear blue waters, and year-round sunshine, is beginning to attract attention...and tourists.

For the past three years, and for the first time since the 1970s, the country's economy has seen an annual growth rate of at least 5%, and, last year, the peso was the strongest-performing currency in Asia, an accolade it's expected to earn again this year.

Meantime, the country continues to suffer from a case of bad press, thanks to political instability and bombing incidents.

In other words, this is just the kind of situation we contrarian investors look for.

Boracay, an island 200 miles south of Manila, is the play. The island's first international resort, the Shangri-La Resort and Spa, opens this year, and Boracay is emerging as the jewel in the crown for the Filipino tourism industry. Investors in the region who have historically put their money into beach resort regions like Pattaya, Phuket, and Bali are today looking to Boracay.

Seven condo projects are being developed on the island as I write, a very small number compared with the 110 new projects under way on Phuket, for example. The government is keen to control over-development and has placed a moratorium on new construction until July 2008, by which time a master plan for development on the island is expected to have been completed.

This kind of limited inventory is, of course, further good news for the investors among us.

Right now, you'll pay about $2,300 a square meter for an unfurnished condo. We expect prices to double in the next two to three years. (When buying purely for investment, this is the level of return I look for--a double in two to three years.)

Furthermore, this is a short-term rental market where demand far outweighs supply and net rental yields are running an attractive 11% to 12%.

Send your queries to: Boracay@LiveAndInvestOverseas.com

6. The Caribbean coast of Costa Rica. I've ignored this side of Costa Rica since, 15 years ago (my most recent visit to Costa Rica's "other" coast), my rental car was broken into and my knapsack and camera were stolen, midday, on one of the busiest streets in Limon.

Again, that was 15 years ago. Yet, I've been prejudiced ever since and have readily believed reports that this part of Costa Rica is too unsafe for wise foreign investment. Friends and contacts in the country today tell me my position is all wet. Or at least outdated. So I'm preparing to take another look.

I can tell you from memory that the beaches are beautiful, and I can tell you from recent reports I trust that they're seriously less expensive than their Pacific coast counterparts.

Who's buying, why, where specifically, in what volumes, and with what exit strategy in mind I can't tell you yet. Watch this space.

Kathleen Peddicord

ALSO RIGHT NOW:

101 tips to help you make your dreams of a new life in Paradise come true...

Don't worry, I won't go on and on with 101 tips for you right now. The truth is, I don't have 101 tips for you right now.

As I write, however, our far-flung contributors and correspondents are detailing from-the-trenches tips, tricks, strategies, secrets, pearls of wisdom, current recommendations, and favorite discoveries, along with their respective lists of "Dear Reader, whatever you do, don't do this"...

All of which will be compiled into a special report that will be, by all means, available to you hot off the virtual presses.

Meantime, to start the conversation, here are 11 things I've learned from the school of hard knocks after two international moves (and a third in process) with two kids and a decade living and doing business outside the States.

1. The first step to any move abroad is to set your priorities and to be honest in the process. What matters to you most? Evenings at the theater? Friends whose company you can enjoy in English? Cost of living? A reliable Internet connection? Don't kid yourself. If you can't imagine life without a Maytag washer and dryer, for example, you may need to rethink the entire proposition.

2. Make all decisions jointly with whomever you will make the move. Your spouse's ideas about what he or she wants may shock you...and vice versa. Better to get them on the table sooner rather than later.

3. No place is perfect. No climate is ideal. No city is 100% crime-free. Manage your expectations.

4. No other country on earth is as comfortable or as convenient as the United States of America. It goes well beyond how you wash your clothes. In many places, shops, banks, dry cleaners, and government offices close for lunch and call it quits for the day by 5 p.m. You can't run errands on your lunch break...or on Sundays, for that matter. In some countries, you pay utility bills in person. In the developing world (not only in Latin America and the Caribbean, but in emerging Europe, too), appointments and schedules are often suggestions rather than firm commitments. And only a handful of real estate markets outside the States operate with Multiple Listing Services, meaning the search for your new home in Paradise likely will be...well...inefficient...

5. You've got to guard against leaving your good sense at the border--that is, never mix alcohol and property buying. We call it "Margarita Madness." It's a syndrome that can set in shortly after your arrival in any sunny, sandy, tropical locale. The water's emerald, the palms are swaying softly. That guy you just met in the bar downtown (the one who shared a couple of rum punches with you), he's now driving you along the beach road bordering his development, pointing out where his clubhouse will be, where the marina will go, where your new home could be positioned. Look at that view. Feel that breeze. Boy, it doesn't get better than this. And, you know, we've got only two lots at this price remaining. A couple of buyers are expected in town tomorrow. I'd hate for you to miss out...

Would you buy a piece of real estate under those circumstances back home? A piece of property you're seeing for the first time in a place where you've never been before?

You need to do more due diligence when investing in a piece of property in another country, not less.

6. There's no such thing as the world's top retirement haven, no one-size-fits-all Shangri-la. The only one who can determine the best place for you to retire is you. There are dozens of beautiful, affordable, friendly, safe, charming places where you could choose to spend time in "retirement." It's a question of what you're looking for and of what's most important to you (see #1 above).

7. Your U.S. health insurance won't cover you once you leave U.S. soil. Don't worry, you have options, which we'll detail in these dispatches (and, in full, in the new "101 Tips for Retiring Overseas" report).

8. Rent first. Don't buy a new home in paradise until you've tried that paradise on for size for six months or so. Even if the country turns out to be, indeed, your ideal retirement haven, maybe the city or the region or the neighborhood where you land at first isn't where you ultimately want to be. Give yourself time to get the lay of the land before committing to a property purchase.

9. Be prepared for panic. In more than 22 years speaking with people who've made the move to another country, I've yet to know one who didn't experience a moment of, "Geez Louise, what in the world have I done?" Expect to question your sanity for having ever considered the idea of moving so far from home and hearth, if only briefly. Expect it, prepare for it, and understand that it will pass. Everything you made the move for is waiting for you. You just need to give your perspective a little time to adjust.

10. Seek tax advice in the country where you're planning to reside before you take up residence. When we moved to Ireland 10 years ago, we met with Ernst & Young in Dublin during one of our pre-move visits. This turned out to be super-smart (though we didn't realize it at the time). In Ireland then (this is no longer true today, as the relevant tax legislation has been amended since), if you organized your financial affairs according to a certain strategy that the advisor at Ernst & Young detailed for us, you could reduce your annual Irish tax burden substantially. I won't bore you with the details (especially as they're no longer relevant). The point, though, is that the strategy had to be employed before we had an Ireland address. If we'd waited until we'd taken up residence in the Emerald Isle, our annual tax obligations would have been considerably greater.

11. Pay attention to your gut. It'll tell you when a place is right...or not. All your research and figuring in advance is important, but nothing substitutes for the feeling you get when you hit the ground.

Tips number 12 through 101 to follow...

 Medieval Dourdan is a royal city, the one-time home and hunting ground of many French kings.

I wish I'd had more time to chat with my host, who, at one time, it came out in conversation, traveled in the same circles as Daniel Ortega, Manuel Noriega, and Augusto Pinochet. After 30 years in the Americas, in the import-export trade in Chile and elsewhere, Monsieur Claude Dabasse decided to retire to the country. He and his Chilean wife bought le Logis d'Arniere in Saint-Cyr-sous-Dourdan, which they run as a small inn (dabasse.com/arniere) and where I spent a comfortable night last week enjoying the century-old structure and soaking up French country life.

This region, whose long and colorful history dates back to the 1100s, is a charming, beautiful, forgotten corner of France just an hour by RER train from Paris. Medieval Dourdan (dourdan.com), home to the oldest castle in the country, is the main draw.

I visited overnight for a series of meetings and had no time for sightseeing. I intend to return, though, in June, with my son, Jackson, 8, for the Medieval Fair. Jack will enjoy the jousting and other tournament offerings, and Lief and I will have a chance to get to know M. Dabasse a bit better. I'd like to ask him what he thinks Ortega might do after his current term in office comes to an end...

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Laguna d'Apoyo is one of the most beautiful natural wonders in Nicaragua...and (location, location, location) only minutes from Granada, the city's tourist jewel.

Speaking of Daniel Ortega, Jeff Cassel, a contact developing land on the rim of Lake Apoyo, Nicaragua's beautiful crater lake, has written to alert me to a pre-launch offer he's making available to friends and previous investors. I qualify on both counts, having invested already in Jeff's first development effort on the rim of Laguna d'Apoyo, called Vistalagos, two years ago.

Jeff is making an offer similar to the one that got my attention before. The opportunity is to buy rim-front lots at a deep discount from what they'll sell for when Jeff's new development project is officially launched.

A little background:

Real estate prices in Nicaragua rose steadily through the end of 2006...until Senor Daniel was re-elected El Presidente. With the Sandinista scheduled to re-take office at the beginning of 2007 and the U.S. real estate market beginning to tumble, investors began to pull back in Nica.

Meantime, the tourists kept coming to this beautiful and diverse land, but, with so much uncertainty on both sides of the investment equation, most were content to enjoy the scenery...without staking a claim to a piece of it for themselves.

Nearly a year-and-a-half later, and the bad press initially surrounding Ortega and his re-election is turning. Ortega is playing nice with the U.S. He is working to clean up title on 3,800 properties held by Nicaraguans. And he continues to support foreign investors' land rights. (This last was probably the biggest point of concern.)

While most U.S. speculators continue to take a sidelines approach to the Nicaragua market, the tourists are beginning to buy in again. Sales aren't as brisk as before Ortega's re-election, but they are picking up. So much so that Jeff has decided to move ahead with his second Lake Apoyo project.

For the past 15 years, development in this country has been focused in two regions: the Pacific coast from Managua south to the Costa Rican border...and in and around Granada, the country's tourist jewel.

A few weeks ago, I introduced you to Jay Snyder, a retiree from Vermont who, with his wife, chose Granada as his ideal retirement haven...and as the location for his retirement project, a small condo development in the center of this colonial city.

Jay knew what he was doing when he chose Granada...as does Jeff, whose Apoyo rim offerings are but minutes outside this, the biggest tourist draw in the country, as well as the market with the greatest prospects for further growth.

The convenience of being this close to Granada but not in the city can't be underestimated. As the numbers of tourists in the city continue to increase, Granada remains a charming place to visit, a fun place to spend an afternoon, a great place to go for drinks or dinner with friends, but, also, increasingly, a nice place to retreat from when you want to escape the crowds.

That's the attraction of Lake Apoyo. Own here, and you can come and go from Granada (access is direct on a paved road that leads into the center of the city) as you like.

Jeff's new development includes lakefront lots; rim-front lots with excellent views of the lake to the front and of Granada and its red-tiled roofs and church steeples to the back; and low-cost back lots with access to the lake and the clubhouse.

Perhaps the best way to gauge the potential success of a new development is to look at the track record (if there is one) of the developer. In this case, the track record is encouraging. Jeff moved quickly to install the infrastructure in his first project, Vistalagos (where I'm invested) and, in fact, upgraded on his initial promises. He paved the interior roads, even though that was never part of the plan.

Bottom line, prices at Vistalagos have doubled from what I paid for my lots, as was my expectation when I invested. This would be my expectation again for this new offering, as well--a double in two to three years.

(That is to say, yes, I believe the Nicaraguan market will return strong as Ortega's time in office comes to an end.)

Of the 12 rim lots Jeff made available as part of this pre-launch offer, four remain. They are priced at nearly a 35% discount from projected Phase I prices. The discounted pre-release price is $59,000; Jeff will list the same lots at $89,000 at launch, which is expected to be before the end of this year.

For more information: ApoyoRimLots@LiveAndInvestOverseas.com

Slow down...take the bus. In much of the world, it's a far more pleasant experience than you might ever imagine...

"If you live in the United States, you hate bus stations," writes friend and retiree since the age of 35 Paul Terhorst. "People in U.S. bus stations look like they've just climbed out of plastic sacks.

"This is not true in much of the rest of the world. In many countries, not only derelicts, but also people like you and me take buses.

"More to the point, outside the States, buses tend to depart from convenient downtown terminals. You can buy your tickets at the last minute, even showing up at the station just before your bus is scheduled to take off. You ride in comfort; deluxe bus service beats first-class air travel in some places these days.

"And you can't beat the cost. Right now on Tica Bus, for example, you can travel from Costa Rica to Nicaragua for $15...from Costa Rica to Panama for $26...and from Panama to Honduras (!), Executive Class, for $94. In other words, you can cover a lot of ground for a fraction what you'd spend in airfares. And you're spared all the check-in lines, security hassles, and travel time to and from the airport.

"Plus, you're covering all this ground at ground level, with locals all around you. Strike up a conversation with the guy sitting next to you. Get the skinny on getting around in your destination. After all, he probably lives in your destination, not in Dallas or wherever.

"Recently, my Norwegian friend Dag visited us in Argentina. We decided to take a trip up to Mendoza wine country, invited our friend Alfonso to join us, and bought the bus tickets. We departed at 7 p.m. As soon as we cleared urban traffic, a steward served us a meal, including champagne and wine.

"After dinner, we watched a movie, in English with Spanish subtitles. When it was over, we pushed our enormous lounge seats all the way back, practically to the horizontal. Soon we were asleep. Next thing we knew, it was early morning in Mendoza.

"Instead of renting a car to get around in Mendoza, we again chose the bus. We wound up in Tupungato, the heart of one of the newer wine regions, at a fine downtown spot with an outstanding eatery. A fellow passenger on the bus to Tupungato had recommended the place. We'd never have found it on our own.

"During our stay in Tupungato, we hired a private car and driver, as needed, to get around the countryside. Let him worry about insurance, repairs, filing the tank, and finding his way.

"Two tips: First, always buy the best seats and standard of service available. It'll still be a fraction the cost of a plane ticket for the same trip.