Dear Live and Invest Overseas Reader,
''Who knew that a single mother,'' writes new Belize Correspondent Macarena Rose, ''happily raising eight kids (two biological and six adopted) in Florida, could pull up stakes and follow a hunch to a new life in a new land? Who could have predicted that the results of this experience would be a wealth of warm friendships and a profound sense of connectedness to a new country and a new community...plus a thriving new business?
''In short, that's my story of a journey that began seven years ago and that continues today. I took a chance on life, and the reward has been an extraordinary transformation.
''How does one get from there to here? The path is different for everyone, of course. I know that many outwardly crave challenge and excitement in their lives and are looking to make dramatic changes. That was not me. I was a mom in Florida, content with the status quo. My life with eight children seemed already an adventure.
''Then I discovered this Caribbean paradise where English is the native language. I was infatuated from the day a friend told me about the warm, welcoming inhabitants, the natural beauty of the land, the heavenly beaches, and the delightful surf.
''Maybe what appealed to me most was the promise of leaving all the day-to-day stresses of life far behind and living at a slower pace. Living in Belize, I discovered, I didn't need my Blackberry!
''Once I was introduced to the idea, I let my imagination go, and I began daydreaming about this culturally diverse place where you can live your life intimately connected to your neighbors. I think many of us fantasize about finding a place with that kind of small-town feeling, and that's just what you find throughout Belize.
''It helps, too, that there's no stress to learn a new language!
''And what a pleasant shock to your system to learn that Belize is a country where your financial resources will likely be more than enough to let you live in comfort.
''It all began when my teen daughter and I were offered an opportunity to travel with the Sentient Temple of Florida to San Ignacio to participate in a healing workshop. That was April 2003.
''When I returned to Florida, I couldn't get the trip out of my mind. My memories from Belize were always 'there.'
''I decided to make a second trip to the country. Six months later, in October 2003, a friend and I were back, traveling throughout the country but finding ourselves especially drawn to the San Ignacio area (where I still live today).
''This second time in Belize was just as special, just as exciting as my first experience had been, and, so, I faced a moment of decision. Would I accept this opportunity to take a chance on life? Watching a local parade in Belize one day, I was taken aback by the intimacy of the event and by how real life is in this country. It was a defining moment, one I will always look back on as the beginning of this new phase of my life.
''Returning to Florida, I told my children that, when the last one graduated, I was moving to Belize. Then came the surprise. My daughter Chiara, 15 at the time, responded by saying she had a 'feeling' we were meant to move to Belize right away, not to wait. It was the last thing I ever expected to hear from her.
''But it meant that we were on our way to Belize.
''I sold our family home, packed up our containers, and took them to the shipping yard in Florida. With our two dogs in tow, we boarded the plane to Belize and have never looked back.
''When you make your initial announcement that you're moving to another country, prepare yourself. The reactions will be both pro and con. When I told everyone that I was planning to settle in a new land, with my children and my dogs, and that I intended to do it within 60 days, well, that certainly got the conversation going. Everyone had an opinion, especially as I was a single mom taking this on. Two close friends invited me over to dinner immediately to try to talk me out of it. They stressed how dangerous it would be. Plus, how would my daughter cope?
''I'm pleased to be able to report now, though, that, once I made the move and began sending back reports of my life, these same two ladies couldn't make plans fast enough to come visit!
''Another friend said it was her dream to throw the hat over that wall and go where she felt called. I explained that, from my viewpoint, the only thing keeping her from doing it was herself.
''And I was not going to stand in the way of my own dreams.
''At first, Chiara and I lived at the Cahal Pech Hotel in San Ignacio. This gave us a chance to get familiar with our new town and community. Chiara started school right away. You can imagine her reaction to a uniform that went down past her knees. Oh, the changes (and tears) she went through. I admit that I wondered at times if she were wavering and having regrets.
''One of her biggest concerns at first was that she couldn't find Dr. Pepper (the soft drink) anywhere. One day, while I was out getting her lunch, I found it. I was able to work out a deal for the vendor to bring in a regular supply, especially for Chiara. That was it. Chiara was fully on board.
''For my part, the better I got to know Belize, the more I liked it.
''Fast forward to today, more then six years later, and I am running my own successful real estate company in San Ignacio, a business that was awarded the title Best Real Estate Agency in all Belize by CBS and The New York Times. I'm also the voice you hear on the cell phone system recorded messages in this country, and it is my pleasure to host a weekly TV show featuring local Belizeans.
''I am greatly enjoying coaching the Cayo's semi-professional men's soccer team, as well as serving on the boards of the Winsom Foundation (an organization with two purposes--to help keep children in school and to let them experience the arts) and of the Humane Society (very appropriate for a woman who supports nine dogs!).
''So, as you can see, I'm well integrated into my new life here. The entire experience continues to be breathtakingly rewarding for me. It's not only that my own life has been completely transformed, but also that I am now participating in bringing about change in the lives of others in my community.
''Shortly after settling in, we began our search for a home to buy. This was an eye-opener. We were surprised and disappointed by the lackluster quality of salesmanship among most of the real estate agencies we dealt with. In addition, we discovered the agents here were neither licensed nor trained.
''That's when I decided to open up my business, Rainforest Realty. My emphasis has been integrity, service, and southern charm! I have a colorful office on Benque Viejo Road in San Ignacio. You can't miss it.
''I have to say that I take great pride in being able to tell this story today. As I've said, this has been a remarkable journey.
''And it's far from over. Every day here is another opportunity for growth and discovery.
''I invite you to come see for yourself what Belize is all about. When you do, please drop by to see me. Here in Belize, we love newcomers.''
Kathleen Peddicord Continue Reading:
Read more...
In response, one reader wrote, "Kathleen, this is all a bit cloak and dagger. Seriously, just tell me. What would you say are the best places in the world to retire right now?" Here you go...the world's top retirement havens:
- Best place to retire cheap: Cuenca, Ecuador
Cuenca is perhaps the most affordable place in the world where you might want to live full-time. You could retire here on less than US$800 per month.
- Best places to retire cheap and exotic: Malaysia and India
India is probably the cheapest place in the world to think about retiring right now. Cheaper than Ecuador and also more exotic. Maybe too exotic for many.
Malaysia is also super-cheap and exotic but more welcoming of foreign retirees. This is the only country in Asia that makes it easy to establish full-time foreign residency.
Within a 20-minute drive of the little Pacific-coast town of Las Tablas, Panama, you can reach five different beaches, all beautiful, all undiscovered. This is a big part of the reason why growing numbers of U.S. and Canadian expats are settling in this part of Panama's Azuero Peninsula.
Maceió is a clean, modern, elegant city fronted by miles of white sand. It's also very affordable. You could buy a three-bedroom apartment here for US$75,000.
- Best place to retire without having to learn a new language: Belize
- Best place to "retire" to start a business: Panama
If your plan for retirement is more about reinvention, starting over, and starting a new business than reclining on the beach and slowing down, Panama should be #1 on your list. Starting a business isn't everyone's idea of "retirement," but pursuing your entrepreneurial inclinations at this phase of your life (starting an Internet business, for example) is a way to launch this phase of your life when you want rather than when your accumulated nest egg allows.
- Best-weather choice: Medellin, Colombia
As I've explained, Medellin is not what you expect. This is a lovely, leafy, and, yes, safe city of restaurants, museums, and parks. It's also situated at an ideal elevation and, as a result, enjoys pleasant, never-too-hot, never-too-cold weather year-round. Living here, you'd need neither air conditioning or heat, meaning your monthly utility bills would be nicely controlled. Plus, the great weather means you're able to enjoy all the outdoor attractions of this pretty, pleasant city year-round.
Depending from where you derive your income in retirement, you could retire tax-free in Panama or Belize. As an American abroad, you never lose your tax-filing obligation in the United States, but that does not mean you owe taxes Stateside. You need expert advice to organize yourself properly (that is, compliantly), but, bottom line, it's possible to retire tax-free. And, again, Panama and Belize are my top picks for where to do that right now.
- Best luxury-lifestyle-on-a-budget choice: Paris
Whatever your idea of the high life, you can find it in the City of Light, and the best part about Paris is that some of the best it has to offer comes free.
- Best controlled-culture-shock choice: Ajijic, Mexico
Ajijic is home to the biggest and most established expat community in the world. You could retire here comfortably without learning Spanish, and you could spend most of your time, if you chose, among fellow foreign retirees. You could enjoy the comforts and conveniences of "back home" while living at a reduced cost and with great weather.
- Best places to retire with children: Panama and Uruguay
If you're considering relocating to another country with children, international-standard schooling options become your priority. You'll find good ones in Panama and Uruguay.
Kathleen Peddicord
P.S. What else this week?
- To choose the retirement haven that makes most sense for you, you need current and complete details on everything from foreign residency requirements to how to open a local bank account...from how much to expect to spend on groceries each week to how to get a telephone line installed.
Specifically, here's a checklist, 14 points for comparing and contrasting every potential retirement paradise on your list...
- For the past quarter-century, I've spent much of my time in the developing world. At this point, it takes an extraordinary frustration or disappointment to get a rise out of me. Ordinary frustrations and disappointments, of which there are many, every day, pass unnoticed.
That said, I have limits, as I'm sure you do, too. What would you find intolerable? What challenges would make you crazy?
Approach it this way: Make a list of everything that's important to you. Big things, little things, silly things...
After all this time tromping around emerging markets, I have a list. I'm a little embarrassed to speak publicly of some of the things on it, but, in the spirit of helping you identify your own breaking points, I share it here, in full... |
- What in the world is a nice, retirement-aged couple from Vermont doing building condominiums in Granada, Nicaragua? Jay Snyder gets this question a lot. It started about seven years ago. After some 40 years building and operating the Landgrove Inn in Vermont, Jay and his wife Kathy turned their thoughts turned to semi-retirement and change.
"We intended to sell our country inn business, and that prospect put us face-to-face with the big 'What Next?' question."
Jay started searching online, where his attention was caught by articles on Central and South America. As he puts it, "It was as though I could hear a voice saying, 'Go south, old man.'
"I decided it was time for me to live my dreams."...
- "Vicki and I have settled for three weeks in Fort Cochi on the Cochin peninsula in India," writes Intrepid Correspondent Paul Terhorst. "This quiet colonial enclave lies across the harbor from a busy city, on India's southwest coast.
"Last week we wandered into a small commercial area of a mostly Hindu neighborhood. We met a mill owner, a goods vendor, and a tea wallah.
After a few minutes, we got a sense of each of them, even though none spoke English."...
ALSO From Global Real Estate Investing Guru Lief Simon: I'm currently generally neutral on the idea of new real estate investment in Panama City. While you can find a great opportunity in this city today if you invest time on the ground, the amount of ongoing construction (we count 23 working cranes in view from our window) will ensure that both condo prices and rental rates, which have fallen by perhaps 20% over the past year, will remain soft for some time to come. In other words, it is possible to buy today and get a good yield on a rental investment, but the risk of falling rents is real. That said, as I remind you often, investing for rental yields is one of the smartest long-term plays you can make in the current climate. I'm focused on this strategy and aggressively on the lookout for new opportunities. One has presented itself here in Panama City, a new condo-hotel project in Bella Vista. The condo-hotel is a concept that you won't find in the United States, where their structure would put them under the jurisdiction of the SEC. However, elsewhere in the world, they can be an interesting investing option. Condo-hotels operate by pooling rental revenues and distributing net profits to unit owners. While each unit is individually owned, the hotel operations and financial management work like a co-op. Pooling revenues not only simplifies the operations of the hotel, but it also helps to eliminate the potential for corruption in the rental process. If each owner were paid based on usage of his particular unit only, then individual owners would jockey hotel management to ensure that their units were rented as often as possible. This jockeying could range from owners installing better furniture in their units to bribing the reception staff. Essentially, though, other than the fact that each unit has a separate owner, a condo-hotel functions like a regular hotel. Every unit owner is required to put his rental unit under the management of the hotel. Central systems are installed--a phone system, for example--and all rooms are furnished alike and stocked with the same towels, etc. All these centralized expenses increase the cost of each individual unit above that of a straight apartment. This means you can't compare the cost of a similar-sized apartment to a condo-hotel unit...even if you back out the cost of furniture. How, then, do you value a condo-hotel unit? In a previous life, I worked for a hotel design and consulting company. I was their CFO so wasn't directly involved in the design or the consulting, but I picked up a few things about the business. The rule of thumb for a hotel is that you should be able to get US$1 in room revenue per night for every US$1,000 you have invested per hotel room. So a US$20 million hotel with 200 rooms should be able to charge average room rates of US$100 a night. Of course, occupancy rates play a roll in total revenue. Rule-of-thumb thinking assumes an average occupancy of 65% for a profitable operation. Therefore, if you're buying a condo-hotel and paying US$200,000 for your unit, you'd want the projected average room rate to be at least US$200. A simple calculation, but, remember, it's just a rule of thumb, a quick check to make sure the numbers are in the ballpark. You'll want to do more critical thinking from there. The opportunity I've found in Panama City is a boutique hotel called Unicorn. It has 96 suites ranging in size from 47 square meters to 61 square meters. Amenities include the normal hotel fare, such as a restaurant and a bar, a gym, a pool, a business center, and meeting rooms. The developer has put together a management team to operate the hotel that has decades of experience in Panama. And he has chosen an international flag from the Carlson Group, Park Inn, for the reservation system and branding. The location in the Bella Vista neighborhood means the hotel is in an active area and one of the nicer downtown zones, with easy access to the banking district, restaurants, and parks. The target market is business travelers looking for more personalized service than generally found in the larger chain hotels in the city. Specifically, Unicorn is focusing on an all-suite platform geared toward business travelers. This is a strong and right now under-serviced niche within this market. The developer, Bruno Carnsella, has 38 years experience in residential and commercial development. Most of that experience was in Florida, but Bruno has also been involved in some international projects, including a project in Panama years ago. As the Florida real estate market came to a screeching halt, Bruno was contacted by friends in Panama proposing the idea of a project in Panama City. Unicorn is the result of those conversations. The numbers are straightforward. Pricing and share of rental income are based on unit sizes. The smallest unit is 47 square meters and priced starting at US$192,150. The next biggest unit is 50.5 square meters, priced starting at US$206,850, and the biggest unit is 61 square meters, priced starting at US$255,150. The revenue splits are 68%, 70%, and 75%, respectively, and prices go up US$1,000 per floor in each building. This means a 50.5-square-meter unit gets 70% of the net income from the hotel, and the management company keeps 30%. Using this unit as an example, the investor would earn an average yield of 10.7% over the first five years of operations. The projection for the fifth year hits 13.4%. Those are the kinds of long-term yields that can build your wealth, and you can expect some appreciation on top of them. Assuming a 4% rate of annual appreciation, your total average annualized ROI could reach 14% over the first five years. Throw in some leverage (remember, it's possible to borrow money from a bank in Panama, even as a foreigner, to purchase real estate in this country), and your returns could increase significantly. With the available financing, this opportunity falls at the lower end of the scale from a capital-requirement point of view. And even without the leverage, the projected yields are a bit higher than my general expectation of 5% to 8%. The reason is the 70/30 split the developer is offering owners. A split of 60/40 is more typical, but, from the developer's point of view, giving 70% to the unit owners rather than taking on long-term bank financing makes the project more worthwhile for everyone involved. I've met with the developer and find him a serious guy. You can find out more here.
Read more...
This is a 14,000-acre property, of which fewer than 3,000 acres will be developed. The rest--jungle and rain forest--will be held aside as a preserve. The developed land will be consolidated along the ocean and river boundaries. With that much land and diversity of water frontage, the variety of scenery, activities, and lifestyle on offer is tremendous. Sanctuary Belize, as the saying goes, has something for most everyone--oceanfront, riverfront, equestrian, dockside, marina, large and private estate lots, even airfield lots if you'd like to access your Belize beach getaway by private or chartered plane. The focal point of the community will be a marina village with condos and shops overlooking the 175-slip marina already under construction and due for completion by the end of this year. This is an ambitious project. And I was a little skeptical of the whole thing before our visit. In fact, I'd resisted making the trip for months, because I had trouble getting excited about a development of this magnitude in this part of this country in the context of the current global climate. The principal in the project I've been communicating with, however, Luke Chadwick, persuaded me. In telephone conversations, e-mail exchanges, and the delivery of all due-diligence materials I requested, I found him to be one of the most impressive and most professional developers I've ever encountered in this part of the world. Now, after having visited the property, I'm completely won over. Here are the quick fundamentals:
- Sanctuary Belize has no debt. They own all their land outright...
- Dirt is moving. They've chosen to focus on the construction of the marina first, for strategic reasons, related to both the long-term infrastructure plan and to marketing, and, as I said, the marina is well under way...
- In addition, roads are under construction, and a plantation house has been built by the developer, with accommodation and meeting space...plus three homes have been built by owners, including a big bamboo house overlooking a lagoon that looks like something out of Architectural Digest...
- The team behind Sanctuary Belize has many years of experience developing property around the world...
- That team includes a local Belizean who is well-connected, well-respected, and who knows how to get things done in this country...
- The developer is offering creative and flexible financing terms. This means two important things. First, as they've been selling this way for some time, they have built up a war-chest, as it were, that amounts to a significant monthly cash flow...
The second important thing about the creative and flexible financing on offer at Sanctuary Belize has more immediate personal benefit for you. As I remind you often, financing an overseas property purchase isn't easy in many countries; in others, it's impossible. It is possible to borrow as a foreigner from Caye Bank in Belize to buy real estate in this country, but the terms are rigid and require a 50% down payment at least. Sanctuary Belize, on the other hand, makes many financing offers available, including, in some cases, 0% down or 0% interest. The developer is effectively working with each buyer to find a combination of down payment, interest rate, and term of the loan that fits the buyer's budget and circumstances. These guys are smart. They understand that, between the down market for the buyer back home (wherever that might be) and global cash flow concerns, people are reluctant to make a buy decision right now. They've decided they're going to do whatever they can to make it as easy as possible for someone who wants to buy to be able to buy. They can afford to do this, because, again, they have no debt. They own all their land outright, and they have built up a multi-million-dollar bank of receivables out of which they continue to fund infrastructure investment. As I said, I was completely impressed during our visit to see this project last month, both by the property itself and by the on-the-ground team that Luke has put together. I'm happy, therefore, to be able to make this introduction today. If you're interested in waterfront property in Belize, either ocean- or riverfront, I say give Sanctuary Belize a close look right now. More information here.Lief Simon P.S. In fact, this is the second time I'm making this introduction. I first wrote about Sanctuary Belize earlier this month, immediately following my trip to Belize. The response from Live and Invest Overseas readers was tremendous and is contributing to the closeout of current inventory. Don't worry. This isn't a concern, given the size of the project. I'm speaking with Luke now about a special new phase launch, and we're working to coordinate a field trip to the property so you can see Sanctuary Belize for yourself. I have a conference call with Luke later today to discuss particulars of the new phase, the field trip to the property, and special discounts for anyone who attends that tour. Meantime, you can register your pre-launch interest here. Continue Reading:
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 PeddicordP.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.
After we've finished our work each day, Lief and I have taken off for long walks to our favorite places--across the river and down rue de Rivoli...to l'Isle de la Cite...to Sacre Coeur... Our body clocks have yet to adjust, so we're up until 2 a.m. or later, one night until 3 a.m. with friends who live here and who we're therefore able to see only a couple of times a year. The next morning, dragging ourselves out of bed after we-couldn't-remember-how-many bottles of wine and not nearly enough sleep, we felt like 20-somethings ourselves (in a good way). Our first agenda in Paris this month is to reconnect with our lives here. Our second is to give our apartment a face-lift. It's been two years since we left it for Panama. Since then, it has been the temporary home of a Japanese banker and his wife, a family of Brazilians, and an American couple and their daughter. The place is a little worse for the wear. Some furniture must be replaced, and the living room and dining room need new coats of paint. We'll spend tomorrow morning at BHV, the Paris department store that, in its sous-sol, is home to the biggest hardware story in the city. We'll shop for paint, brushes, spackle, putty knives, and wood glue, all in one spot, with the help of friendly, knowledgeable staff. Then we'll have everything bundled for delivery in the afternoon, so Lief can get to work. We won't have time to go grocery shopping today, but that's not a problem in this city, where nearly every grocery store, big and small, also delivers, often free, depending on the size of your order. We shopped yesterday for a new kitchen table and chairs, which were delivered within four hours of our purchase, just as the clerk had indicated they would be. After five hours of walking from shop to shop, errand to errand yesterday, our legs were giving out. When we were ready to return to the apartment, we had to travel but one block to a Metro stop, where we boarded the train for a quick ride that took us within two blocks of home. Paris is delightful and easy, we're being reminded...and, as well, not necessarily expensive. This visit, of course, we're enjoying an exchange rate advantage. Our U.S. dollars have more than 20% more buying power in this city today than they did two years ago when we left. That makes all these apartment improvements easier for Lief to stomach. But it's more than that. The price of a Metro ticket has increased, about 10%. That means a carnet of 10 tickets is 12 euro today, versus 10.80 euro when we left...and that each Metro ride, therefore, costs you but 1.20 euro. About half the cost of a Subway ticket in New York...and that to get from one end of the city all the way to the other if you're interested. Other things are the same cost as when we left or even slightly less. The poulet roti from the butcher on our street (which we all agree is the best roast chicken anywhere in the world)...a bottle of water or a fresh-made crepe from a street vendor...a head of lettuce from the grocery store...bathroom mats...kitchen towels...these things are all as affordable as we remember. Some things we shop for are more affordable than in Panama City. Today our plan isn't shopping but picnicking, on the little point that juts out into the Seine from l'Isle de la Cite. It's a perfect day for it. Kathleen PeddicordP.S. What else this week?
- In the past few months, since my "How To Retire Overseas" book was published, I've been interviewed by at least two dozen members of the media...and every one of them has wondered:
"You moved from Paris to Panama two years ago? Why would you do that?"
Here's the truth. If we had no children, no business, and no agenda beyond pursuing the best possible quality of life, we'd have stayed put in Paris. For us, the City of Light (from which I write you today...we're here for the month of July) is the best place in the world to call home.
However, about 2 ½ years ago, I did have another agenda. Having sold out my participation in theInternational Living group, where I'd been publisher for more than 23 years, I decided I wasn't ready for retirement. What I wanted to do, I realized, was to start over...to build a new business from the ground up.
France, I knew from experience, was not the place for this. The French are not the nasty, rude people many Americans imagine them to be, but one French stereotype is real: They have little tolerance for the entrepreneurial imagination. The red tape, the bureaucracy, the taxes, and the labor law in this country make it one of the least appealing places on earth to start or operate a business.
Lief and I knew we'd have to relocate if I wanted to make a real go of a new business venture. But where?
We took stock of our previous entrepreneurial adventures. By that time, we'd run businesses in the United States, Ireland, France, Nicaragua, Honduras, Ecuador, Nicaragua, Mexico, and Panama.
When deciding where to base a business, you want to consider five things: the labor pool (how educated and at what cost); the infrastructure; relevant tax rates; the doing-business climate; and local labor law. Considering the world map and taking into account our own experiences, we concluded that, all things considered, Panama is the top choice worldwide if you're in the market for a place to launch the kind of business I was in the market to launch...
- One of my favorite places on earth will be getting a lot of positive attention starting later this month when "Survivor" begins filming its 21st season in and around San Juan del Sur, Nicaragua. Then, for 14 weeks this fall, some 13 million U.S. households will tune in to CBS every Wednesday night to watch 20 Survivorists tromp around the Nicaraguan jungles.
This is a big deal for a little country like Nicaragua. I've seen the effects of this kind of thing in the past. When "Temptation Island," for example, aired its Isla Bonita season filmed on Ambergris Caye, Belize, suddenly, overnight, this outpost of divers and fishermen was a household name.
The Temptation Island Effect created a new and higher-end (US$1 million-plus) market on this formerly unnoticed Caribbean island, the vestiges of which I viewed recently. All along Ambergris' white-sand coast today are condo developments built to supply the Temptation Island viewers who, having been introduced to this island paradise in prime time, wanted to claim a little piece of it for themselves. How cool it became to be able to say, "I'm going down to spend a week on the beach at my place on Ambergris Caye...you know, the island off Belize where 'Temptation Island' was filmed..."
Now it's Nicaragua's turn. I'd say it couldn't happen to a more deserving place. When it comes to Nicaragua today...
- The rental market in Paris has shifted. Last year, when the euro was strong, tourism was down. The short-term rental market suffered.
Today, the Greenback has about 20% more buying power in this part of the world than it did a year ago. Tourism is up sharply, and short-term rentals are back in demand.
Meantime, thanks to la crise, as the French refer to it, many apartment owners in this city have been struggling. With fewer tourists on the scene over the past 18 months or so, landlords did what they could to attract long-term tenants. Business people flow steadily through this city, often with their families in tow during their 3-, 6-, or 12-month placements. More apartment owners fighting to attract a piece of this executive rental pool has translated into falling pricing. Mid- and long-term rental rates are down and more competitive than they've been in a long time.
On the other hand, again, though, this season, with more travelers coming and going, tourist rentals are up, in terms of both occupancy and price.
This is the advantage of a diversified market like this one. While one market segment softens, another becomes more interesting.
Which is one big reason why I recommend an apartment in Paris as a solid long-term yield play...
ALSO From Global Real Estate Investing Guru Lief Simon: In Belize last month, we made the drive south along the mainland coast to see what there was to see, but also, specifically, to meet with a developer in this part of the country I've been communicating with for the past six months and to scout his property. Long and short of my report from that visit is that Sanctuary Belize blew us away. This is a 14,000-acre property, of which fewer than 3,000 acres will be developed. The rest--jungle and rain forest--will be held aside as a preserve. The developed land will be consolidated along the ocean and river boundaries. With that much land and diversity of water frontage, the variety of scenery, activities, and lifestyle on offer is tremendous. Sanctuary Belize, as the saying goes, has something for most everyone--oceanfront, riverfront, equestrian, dockside, marina, large and private estate lots, even airfield lots if you'd like to access your Belize beach getaway by private or chartered plane. The focal point of the community will be a marina village with condos and shops overlooking the 175-slip marina already under construction and due for completion by the end of this year. This is an ambitious project. And I was a little skeptical of the whole thing before our visit. In fact, I'd resisted making the trip for months, because I had trouble getting excited about a development of this magnitude in this part of this country in the context of the current global climate. The principal in the project I've been communicating with, however, Luke Chadwick, persuaded me. In telephone conversations, e-mail exchanges, and the delivery of all due-diligence materials I requested, I found him to be one of the most impressive and most professional developers I've ever encountered in this part of the world. Now, after having visited the property, I'm completely won over. Here are the quick fundamentals:
- Sanctuary Belize has no debt. They own all their land outright...
- Dirt is moving. They've chosen to focus on the construction of the marina first, for strategic reasons, related to both the long-term infrastructure plan and to marketing, and, as I said, the marina is well under way...
- In addition, roads are under construction, and a plantation house has been built by the developer, with accommodation and meeting space...plus three homes have been built by owners, including a big bamboo house overlooking a lagoon that looks like something out of Architectural Digest...
- The team behind Sanctuary Belize has many years of experience developing property around the world...
- That team includes a local Belizean who is well-connected, well-respected, and who knows how to get things done in this country...
- The developer is offering creative and flexible financing terms. This means two important things. First, as they've been selling this way for some time, they have built up a war-chest, as it were, that amounts to a significant monthly cash flow...
The second important thing about the creative and flexible financing on offer at Sanctuary Belize is more personal. As I remind you often, financing an overseas property purchase isn't easy in many countries; in others, it's impossible. It is possible to borrow as a foreigner from Caye Bank in Belize to buy real estate in this country, but the terms are rigid and require a 50% down payment at least. Sanctuary Belize, on the other hand, makes many financing offers available, including, in some cases, 0% down or 0% interest. The developer is effectively working with each buyer to find a combination of down payment, interest rate, and term of the loan that fits the buyer's budget and circumstances. These guys are smart. They understand that, between the down market for the buyer back home (wherever that might be) and global cash flow concerns, people are reluctant to make a buy decision right now. They've decided they're going to do whatever they can to make it as easy as possible for someone who wants to buy to be able to buy. They can afford to do this, because, again, they have no debt. They own all their land outright, and they have built up a multi-million-dollar bank of receivables out of which they continue to fund infrastructure investment. I'm happy to be able to make this introduction today. If you're interested in waterfront property in Belize, either ocean- or riverfront, I say give Sanctuary Belize a close look right now. More information here.
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