That's not a high hurdle. The trouble is that you're going to be hard put to find a piece of real estate for sale in this country for anything like US$10,000...or even two or three times that amount.
For it was from this bit of coast, specifically from the town of Portobelo (the featured destination for this month's issue of my Panama Letter), one of the discoveries of Christopher Columbus, today about a half-hour east of Colon, that the 16th- and 17th-century Spanish coordinated the return of their plunder from the New World to the old one. At one time in history, more than one-third of all the world's gold and silver passed through this town, where it was weighed and counted in the mammoth customs house (still standing) before being shipped back to Spain. All this wealth coming and going made Portobelo a tempting target, for both the British throne and British pirates, which explains Spain's investment, four centuries ago, in the impressive fortifications that surrounded Portobelo, including Fort San Lorenzo (also still standing).Alas, the Spanish forts weren't enough to keep the British at bay, and, eventually, the Spanish decamped. They moved their plundering operations from Portobelo to Cape Horn. Portobelo turned from boomtown to ghost town and, in the centuries since, has settled into quiet obscurity.Meantime, a half-hour west, in 1850, Colon was born, in response to Gold Fever in California. The town was established as the Caribbean terminus of a rail line that allowed would-be gold diggers from the U.S. East Coast to cut through Panama as a means of reaching the U.S. West Coast. In this pre-Canal age, this route was far preferable to the alternatives...a journey through Indian Territory or a boat trip through the Strait of Magellan. By the late 19th century and through the start of the 20th century, Colon residents, benefitting from all the Gold Rush cash flowing through their city, earned a deserved reputation as elegant, even posh. The town was home to more than a dozen theaters and cinemas and several cabarets, one of which hosted Evita Peron. As recently as 50 years ago, this architecturally rich city was recognized as a music center and the location of the best Carnaval celebration in Panama. Visiting Colon today you'd have trouble guessing at any of that impressive history. Colon today is home to the country's Free Trade Zone and part of the Panama Canal. The province provides 15% of the country's total GDP. Yet, like Portobelo before it, this city has fallen into utter ruin. Unemployment in Colon is as much as 12%, while it's 3% on average nationwide.We predict, however, that we are on the eve of change in this part of this country and see early signs of emerging opportunity. Colon is the other place in Panama, along with Casco Viejo, where you find a sizeable inventory of colonial-style and architecturally interesting, historically important buildings. Investors have been buying and restoring the old colonial structures in Casco Viejo for 15 years, and prices in that old-town neighborhood have risen accordingly. It's hard now to find a bargain or even a good deal in Casco Viejo.Meantime, nobody's been paying any attention to Colon. The new administration, though, has shown an interest in supporting a renaissance in this city. This has gotten our attention and might be interesting to you, too, if you, like us, appreciate historic architecture and path-of-progress opportunity. Kathleen PeddicordP.S. Registration opened yesterday for our 2015 Live and Invest in Panama Conference, the only Panama country-specific event on our 2015 calendar. Already, half of the first-come, first-serve VIP places have been filled. If you'd like to come see for yourself all that's going on down here in the Hub of the Americas, I recommend that you get in touch now. You can reach our Conference Team by email here or by phone toll-free from the United States at 1-888-546-5169.More details about the event we're planning are here.You can register online here.
Panama's property markets did not crumble in the wake of the 2008 meltdown, and neither did its economy. Panama Canal revenues have surged these past six years, continuing to keep this country cash comfortable. In addition, Panama is enjoying growth in both its financial services and tourism sectors and has established itself as a top tourist shopping destination. Now, instead of flying up to Miami to eat, play, shop, and drop some cash, South Americans with money come to Panama, which is easier to get to and far easier to get into than the United States in this War On Terror age.
Panama's healthy economic state translates to:
Those things in turn translate to a hard-to-ignore option for where to commit yourself, your time, and your money.Panama's economy has expanded by double digits for four of the last eight years. Its current growth rate, projected by the IMF to be as much as 6.6% for 2014, while not double digits, makes it the fastest-growing economy in the Western Hemisphere. Foreign direct investment continues up every year, and unemployment is low and falling (while unemployment is increasing in neighboring countries including Nicaragua, Honduras, and Costa Rica). In 2009, the World Economic Forum Competitiveness Index ranked Panama at 58; in 2013, it ranked Panama at 48. Panama's debt was 41.3% of domestic gross product in 2013, compared with 70% in 2004. This reduced debt burden has led to improved credit ratings. The country's former President Ricardo Martinelli, whose five-year term ended earlier this year, was an important part of getting this country to where it is today. Throughout his time in office, Martinelli targeted key points of concern and key challenges that could impede the country's competitive growth agenda, specifically and especially, for example, traffic in Panama City. The traffic in this country's capital qualifies as among the worst in the world. This is a direct result of the country's economic growth—more people earning more money are able to afford to buy more cars, meaning additional cars on the road every month. Meantime, Panama City's road system was developed when this was a much sleepier place. Something had to give. Martinelli targeted this challenge head on from his first month in office. First, he took the old Diablo rojo buses (these brightly painted old U.S. school buses had been used for local transportation for decades but had become a main source of traffic chaos) off the roads. The prior two governments had said they wanted to replace these buses; Martinelli actually did replace them (well, most of them). In their place today are modern, air-conditioned buses that follow actual routes. Part 2 of Martinelli's plan for addressing the traffic mayhem on Panama City's streets was to build a metro. Again, the previous two administrations had talked about the need for a metro; Martinelli actually built a metro that opened this year. Line 2 is now underway.Looking ahead, where will additional growth come from for this market?
The good economic news in Panama is, in fact, great, but, yes, there are points of concern. Corruption, for example, continues to impede efficient growth and to frustrate investors. This is a key agenda for new President Varela who has, since assuming office in July, already taken on two high-profile political corruption cases involving a minister and a Supreme Court judge.
Kathleen PeddicordP.S. I've been recommending Panama as a top choice for living, retiring, investing, and doing business overseas for more than 15 years, and I'm more bullish on this country's prospects and the opportunities it offers today than ever before.That's' why we're including a Live and Invest in Panama Conference as early on our 2015 conference calendar as possible. We'll begin taking registrations for this important event, scheduled for April 13–15, 2015, tomorrow. Meantime, you have a final window to get your name on the list for VIP perks. Do that here now.
Now that they've reached this important phase of development, the developer is planning a price increase. I'm writing today to let you know that I have talked them into postponing this for Live and Invest Overseas readers. I believe this is one of the best agri-land investment opportunities you'll find right now, and I want to be sure you have a chance to get in on the ground floor, so to speak. I also, as you know, recommend that you buy what you see...meaning you should, if you can, come see this organic mango plantation for yourself. The developer is offering a tour of the property in September and have agreed to hold current pricing for Live and Invest Overseas readers through the dates of that tour. One key risk in any agricultural project is implementation. In this case, at this stage, this risk has been minimized significantly. With planting underway, you can have a higher degree of confidence that your trees will be planted according to the contractual timeline. Another risk for any agricultural project is water, as I've mentioned. Farmers in California are having a rough time right now thanks to the prolonged drought. Panama is in the tropics and enjoys significant rainfall every year. Nevertheless, the developer here chose for his mango plantation land with several rivers running through it, including a river that runs year-round, even through the dry season. They have the rights to take as much water from it as they need. Market risk is something else to consider with any turnkey project. With an agricultural project, this translates to: Who is going to buy your product? Mangos are the most eaten tree fruit in the world. The market is large. That said, the tropical fruit markets in the United States and Europe could be considered in their infancy...but expanding big time. The USDA's figures for mango consumption between 1980 and 2012 show an increase of a staggering 896% (from 0.25 pounds per person to 2.49 pounds per person, on average), and the demand continues to grow. In 2013, mangos made up 39% of this market. Not all mangos are created equal. The agricultural partner of the developer behind the plantation in Panama has created a variety of the fruit that has more meat and is naturally sweeter than most any other mango you'll find. A quality product and a big and growing demand aren't a guarantee that you'll be able to sell your inventory, right? You have to have access to buyers. In this case, the developer already has a 350-hectare mango plantation in production and is selling those mangos to juice companies in Panama. These same outlets have said they'll take as many additional mangos as the developer can produce. Right now those juice companies have to import the vast majority of their mangos for processing, which is far more costly than buying locally grown fruit. While having that ready-made outlet available is great, it's not the most profitable strategy. Therefore, the developer is in discussion with several groups in the United States, from dried fruit wholesalers to grocery stores, lining up contracts for selling your mangos directly into the U.S. marketplace where they would be able to charge substantially more than the local Panama juice companies are paying. Selling directly into U.S. markets would mean a more profitable operation; however, the financial projections the developer has put together are based on selling at local Panama prices. In other words, the projections are conservative. Using those numbers, the projected annualized yield (or IRR) through 15 years (although the project will produce for 60 to 80 years) is 16.52% at the current investment price. The mango trees don't start producing until year four, but, when they do, the annual cash flow is very healthy. By year five, when the trees are fully producing, the yield on your original investment is projected at 30% per year. The investment price is US$33,500 per hectare right now. The developer hasn't finalized the plan for the coming price increase, but it will be at least 10%. As he's sold out phase one already and has started selling phase two, it's been a tough conversation to persuade him to hold the original launch price for a couple of months more for Live and Invest Overseas readers. But, as I said, he has agreed. If you're interested in an agricultural investment and like the idea of mangos or Panama, now is the time to take action. You can find out more here. Lief Simon
And so is ours. We will start construction of our Founder's Lodge this month. This will be a Spanish colonial-style clubhouse for owners and visitors, with a great room, a dining room, four guest suites, a pool, and a bar-b-que area. In just a couple of weeks, Kathleen and I, along with our children and some friends, will gather with the local mayor, our architects, our contractor, Gary, and his crew to throw the first shovelfuls of dirt and to drink a toast to commemorate this turning point for Los Islotes.
Indeed, Los Islotes is entering a next phase of development. We have moved beyond drawings and plans to infrastructure and construction. Which means it's time to raise prices.
All prices for ocean-view lots will go up starting March 15. If you've dreamt of waking up each morning to Pacific Ocean views enjoyed from the comfort of your own home in a private beach community, then Los Islotes could be calling your name. I’m hardly unbiased, I realize, but I have to say: This is the most beautiful stretch of coast I’ve seen anywhere in the world in all these many years of scouting.
And this is the last time you’ll have the chance to become part of the community we’re developing on this beautiful coast at current Phase 1 prices.
Reserve a lot before March 15, and you can lock in the current price. You'll then have 30 days from the date of your reservation to visit the property if you'd like before completing a purchase agreement. That timing works well if you’d like to join us for our next tour out, which is scheduled for April 12-13.
You can also still avail for a limited time of developer financing, which allows you to buy with 20% down and 0% interest, with the balance paid over 36 months.
Los Islotes Sales Director James Archer and his team are standing by to tell you more and answer your questions. You can reach them here.
P.S. We took some photos while we were out there last weekend. Take a look.
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Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.
Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.
Read more here.
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