Articles Related to Lee harrison


#1—Survival: This type of buyer is interested in creating a self-sustaining environment for his family's personal use. The objective here is not to reap investment gains but to have a self-sustaining home to fall back on if necessary and to enjoy prepping it and working it in the meantime. This agenda makes sense for people who enjoy the outdoors and who appreciate the preparedness angle.

#2—Land Banking: Buyers in this camp are counting on the value of arable land going up as supply shrinks and demand continues to rise. The idea is not to have the land produce anything but to hold the land until you want to realize a long-term capital gain.

#3—Hands-On Agricultural Production: This buyer wants to own the land and use it to produce an income. A friend recently bought a coffee farm in Colombia and now sells the coffee into the marketplace. And a reader recently wrote to say that she and her family were now running their own productive cattle farm in Brazil. This investment works well if you want to make a living on your property.

A surprising number of people make this kind of investment... but the ones who make money at it are usually those with prior farming experience. If you're going to retire from your job as an accountant to raise blueberries in Uruguay, you're likely going to end up with an expensive hobby rather than a serious income.

A variation on this theme is the investor who leases his farmland out to an experienced farmer. Pursuing this strategy, you'd typically get a share of the proceeds, and of course you'd benefit from the value of the land increasing. This scheme might net you about half what you'd earn if you worked the land yourself. In Uruguay, for example, leased-out land nets about 3.5% to 4% annually.

#4—Hands-Off Agricultural Production: This type of investment can take many forms, from an agro-oriented mutual fund or an exchange traded fund to an investment in the production of an agricultural product managed completely by someone else.

Of these four categories, land banking and the hands-off production investment work best for me. I know better than to think I've got the skills for running an active farm. Plus, with multiple residencies and banking presences around the world, I've already put in place enough survival alternatives to suit my outlook.

My favorite market for land banking is Uruguay, because of its plentiful water supply, abundance of different types of agricultural land, and mature infrastructure for getting things to market. Uruguay also offers a solid financial system and is friendly to foreign investors.

However, a totally hands-off agricultural production investment has the advantage of allowing a smaller investment than buying your own farm. I've seen a number of good deals of this type over the past few years to do with the production of coffee, teak, and mangos.

Here are some of the attributes that good hands-off agro-offers have in common:
  • These projects are normally turn-key. You buy into a project that's managed professionally. Your job is to take the profits. More and more turn-key investments are being put together specifically for individual investors, as developers realize the collective power of the retail investor.
  • Strong management is critical. For maximum yields, you want to invest with industry experts in the field, people with firsthand experience managing the type of crop you're investing in.
  • These investments offer economies of scale, due to their size, reducing expenses (materials, machinery, and labor) and leaving more available for payout to investors.
  • When you're part of a large project, market access is better than you could ever get on your own. If you want top dollar for the product, you need to be one of the big boys that the major retailers and processors want to buy from.
  • A good project offers a premium product expected to weather market downturns better than mass-market production fare.
  • Finally, with the best projects, the land is titled to the buyer. If you invest in teak, for example, you're actually buying the land that the trees are grown on and then sharing in the production profits. If for some reason the teak profits don't turn out as you'd hoped, you still own the land... not a piece of paper.
Teak pays high returns when left until optimum maturity, and it offers the further advantage that you can time the market when deciding when to cut the trees. If teak prices are down this year, you have the option to wait for potentially better prices next year. The drawback with teak is that it takes so long to grow to optimum maturity... maybe 25 years.

Coffee and mangos, on the other hand, begin producing relatively quickly and continue producing for a long time. Mango trees have a productive life of 60 to 80 years, providing cash flow for generations.

In the end, picking an agro-investment is no different than picking a residential property investment. You analyze what your motives are, take stock of the different categories of properties that are out there, and then focus in on the available deals.

One final point: I'd say that agro-investments are more stable than residential property investments. The agricultural production shortage is a worldwide problem, and agricultural products move freely across borders, resulting in a worldwide supply-demand equation. Accordingly, agro-investments are less susceptible to local market ups and downs.

Lee Harrison

Editor's Note: Agro-investing will be one important theme at this year's Global Property Summit taking place in Panama City, Panama, March 18–20. Experts from key markets will present both top current opportunities and the background you need to invest wisely and for maximum return.

This is your last chance to register taking advantage of the Early Bird Discount, saving US$250 per person.

If you prefer to speak with someone in person, you can reach our conference team toll-free from the United States at 1-888-546-5169 or by email.

Continue Reading: Best Retire Overseas Choices For Single Women
Read more...
 


The rate of increase, however, seems to be cooling off. Ecuador Correspondent David Morrill reports that appreciation is running about 5% per year currently.

But there's more to the real estate picture in this city than capital gains. Some North Americans relocating to Cuenca are buying places of their own, but the majority of new expats are more interested in renting. For their getting-a-feel-for-the-place phase, they prefer to stay in furnished, fully equipped, turn-key, short-term rentals, and it's this market specifically that has blossomed over the past three or four years.

A two-bedroom, two-bathroom condo convenient to El Centro that sells for US$75,000 would rent for about US$750 per month, fully equipped. After expenses (property taxes, which are almost negligible; utilities, which are also low because you need neither heat nor air conditioning in this city; and condo fees of, say, US$100 per month), this place could net better than 8% per year. You're not going to get rich off 8% per year, but it's a solid return... and, in this market, reliable.

That same US$75,000 condo would rent for about US$500 per month on an unfurnished long-term contract. You (the owner) would still pay the taxes, but the renter would pay for furniture, the HOA fees, and utilities, leaving you, again, with a better-than-8%-per-year return... without the hassle of managing a short-term rental.

The rest of the very good news here is that it's possible in this city to buy a well-located and very rentable apartment for less than US$100,000. Further, a place that you might buy for rental income would also likely be comfortable for personal use.

You could invest in a property today, then rent it long term and unfurnished until you're ready for your own retirement. This would be a relatively hassle-free way to store value in the market and earn a decent return while counting down to the day you'd be able to move in yourself.

Lee Harrison

Editor's Note: Both Lee Harrison and David Morrill will join Lief Simon at this year's Global Property Summit, taking place March 18–20 in Panama City.

This week only you can register two for the price of one for this, our only real estate-specific event of 2015. Details are here.

Continue Reading: Using Direct Debit To Pay Bills Overseas

Read more...
 


Already Undervalued, Colombia Is Now Trading At A 34% Currency Discount

The city of Medellín offers the best lifestyle we've seen for your property-purchase dollar. Even now that the mainstream buyer and traveler are finally beginning to focus on Medellín—and expats are moving to this city in significant numbers—its negative stereotype of 30 years ago is still keeping prices down.

In Medellín today, you can enjoy a First World setting, with clean, safe, and shady streets, fine dining, and charming outdoor cafes, at prices that we haven't seen since 2006.

The Catay area in Medellín's El Poblado is heavily wooded and crossed by a rushing stream. The apartments in this neighborhood are a blend of new and older luxury units. On the market today, for example, is a two-bedroom, two-bath condo with a roomy 125 square meters (1,345 square feet) of living space for an asking price 340 million Colombian pesos. Here's how that works out given today's rate of exchange between the U.S. dollar and the Colombian peso:

2013 Price: US$193,200
February 2015 Price: US$144,200
Currency Discount: US$49,000

Cali, Colombia, averages warmer weather than Medellín, and some of its neighborhoods offer a great expat lifestyle at prices lower than most anywhere in Latin America at the current rate of exchange. The Granada neighborhood is one of our favorites, with its restaurants, cafes, and clubs. Here you can buy a large, 121-square-meter (1,300-square-foot) apartment with three bedrooms and three baths for 235 million Colombian pesos.

2013 Price: US$133,500
February 2015 Price: US$99,700
Currency Discount: US$33,800


Chile: Latin America's Cadillac Destination Offers The First World For 27% Off

Chile amounts to a first-rate venue. The quality of life on offer in this country is as good as it gets in Latin America. Chile offers modern, First World infrastructure, a high standard of living, low levels of corruption, a strong economy, and business- and entrepreneur-friendly policies.

Chile also offers the expat many and diverse lifestyle options. This country spans 2,650 miles from north to south and boasts an amazing array of climates and geography from sea resorts and small ocean-side villages to the mountains of the lake district and the sophisticated scene of Santiago.

Santiago's Barrio Italia is one of our favorite neighborhoods, with its shady streets and old homes mixed with upscale restaurants, sidewalk cafes, and exclusive boutiques. Just down the street from our Chile correspondent's apartment, we found a newer condo with two bedrooms, two baths, and 75 square meters (810 square feet) of living area. Also, important in Santiago, it's close to a metro (subway) station, connecting you to the whole city. The property is listed for 174 million Chilean pesos.

2013 Price: US$354,000
February 2015 Price: US$279,000
Currency Discount: US$75,000

Viña del Mar is Chile's premier seaside resort, drawing visitors from all over the country and around the world. In Viña del Mar, we found a three-bedroom, two-bath apartment with 100 square meters (1,080 square feet) of living area and ocean views listed at 116 million Chilean pesos.

2013 Price: US$241,700
February 2015 Price: US$190,500
Currency Discount: US$51,200

Spain Has Turned Around... And Now The Strong Dollar Is Helping Out

Spain has long been one of the world's most sought-after property destinations thanks to its great weather, relatively low cost of living, and friendly atmosphere. This country was hit particularly hard by the last recession, and savvy property buyers have been watching closely for signs of a turnaround.

Now the official data on property sales show that the recovery is in progress... and buyers and investors are making their moves.

In fact, Spain offers two reasons to buy: We're this side of the bottom... and the dollar has climbed about 15% against the euro since early 2013, giving the U.S. dollar-holder additional buying power.

For example, a three-bedroom, two-bath apartment in Barcelona, with 95 square meters (1,020 square feet) of living area, has two terraces for an additional 38 square meters (409 square feet), from which you can enjoy the sea views. The asking price is 170,000 euros.

2013 Price: US$232,000
February 2015 Price: US$192,000
Currency Discount: US$40,000

In the beachfront town of La Cala de Mijas, Málaga, a two-bedroom, two-bath apartment with 85 square meters (915 square feet) of living space plus an additional 129 square feet of terrace is on offer, completely furnished. It belongs to a complex with pools, tennis courts, and a brisk rental market. The asking price is 145,000 euros.

2013 Price: US$197,900
February 2015 Price: US$164,000
Currency Discount: US$33,900

Exciting, Romantic, And Diverse—Brazil Now Offers An Additional 33% Currency Advantage To U.S. Dollar-Holders

If you've ever dreamed about the romance of Brazil, with its thousands of miles of beautiful beaches, fascinating culture, excellent food, and warm, friendly people, then take note. Right now is your best opportunity to buy in years.

Bigger than the continental United States, Brazil offers a wide range of climates and cultures, from the mountainous wine region in the south with its strong German influence to the country's Reggae capital of São Luis in the north with its strong French and African influences.

Fortaleza is one of our favorite cities in Brazil, the "gleaming centerpiece" of Brazil's northeast coast. On offer right now in Fortaleza's beachside neighborhood of Meireles is a 67-square-meter (721-square-foot) condo with two bedrooms and two baths. The asking price is 380,000 Brazilian reals.

2013 Price: US$187,200
February 2015 Price: US$140,700
Currency Discount: US$46,500

Maceió is one of Brazil's most popular beachside cities. It's relatively small (by Brazilian state capital standards) but offers everything the expat or second homeowner could want in city amenities. Barra du São Miguel lies just south of Maceió, and here you can buy a three-bedroom, three-bath ocean-view house with 191 square meters (2,055 square feet) of living space, plus a pool and garage. The asking price is 280,000 Brazilian reals.

2013 Price: US$137,900
February 2015 Price: US$103,700
Currency Discount: US$34,200


I'll say it one more time: If you've been thinking of making an overseas property purchase, now is the best time in years to make your move.

Lee Harrison

Editor's Note: Lee Harrison will co-host this year's Global Property Summit with Lief Simon. This event, the only property-specific program on our 2015 conference calendar, will take place in Panama City, Panama, March 18–20.

Furthermore, the Early Bird Discount for this year's Global Property Summit expires this Friday, Feb. 13. Register now to save up to US$500. Details are here.

Continue reading: Financing The Purchase Of Property Overseas

Read more...
 

Both Medellin and Cuenca enjoy great weather, with virtually no bugs, year-round. I didn't use heat or air conditioning in Cuenca, and I don't use them here in Medellin. 

But the weather is not the same. Medellin is warmer, with daily highs averaging around 81 degrees Fahrenheit (27 Celsius), with lows in the 60s, and one degree of seasonal variation. In Cuenca, monthly average highs vary from 65 to 71 degrees Fahrenheit (18 to 22 Celsius), depending on the time of year, and nightly lows are also correspondingly lower. I never broke a sweat in Cuenca, and I wore a long-sleeved shirt with no jacket almost every day of the year. 

Rainfall is great in Medellin (66 inches versus 35 inches in Cuenca), but the average sunny day is just a bit higher in Medellin. 

The city with the "perfect weather" for you will be a matter of your own taste.

Establishing residency is fairly easy in both Colombia and Ecuador, with low thresholds for visa qualification in both countries. In Colombia, the pensioner's visa requires an income of a little less than US$1,000 per month, while in Ecuador the level is even lower, at US$800 monthly. For an investor-type visa, Colombia's options start at around US$34,000 for a one-year temporary visa, while Ecuador requires US$25,000 for full, permanent residency.

So Ecuador has lower thresholds for permanent residency, both for the investor and the retiree.

Colombia's visa, however, is quicker and easier to obtain, with fewer required documents. Also, Ecuador imposes restrictions on being out of the country during your first two years of residency, while Colombia has no such restrictions. 

The cultural scene in Medellin is remarkably similar to that in Cuenca. This is surprising because Cuenca has around 600,000 people in its metro area, while Medellin has about 4 million. In both cities, you can enjoy orchestra, theater, art openings, museums, and a generally sophisticated cultural scene. You'll pay a fee for most of these in Medellin, while in Cuenca they're usually free. 

The infrastructure is good in both cities. You'll enjoy drinkable water, reliable broadband Internet, and dependable electricity, water, and phone service. 

Also, both cities are very walkable, and both have excellent and cheap public transit systems. If you decide to drive, you'll find traffic jams equally maddening in both cities. 

Real estate costs are cheap in both cities by Latin American standards. Right now, though, thanks to the current exchange rate between the Colombian peso and the U.S. dollar, prices in Medellin are cheaper than ever. I prepared a survey recently that compared costs in 18 Latin American cities, including Medellin, Montevideo (Uruguay), Fortaleza (Brazil), Panama City, and Cuenca. For comparable properties and areas, prices in Medellin's El Poblado are the lowest on a per-square-meter basis. A year ago, this was not the case. A year ago, Cuenca would have been more affordable. Today, Medellin is the better buy... not only than Cuenca but also than nearly every other destination I looked at in my survey. The only more affordable choices are Granada, Nicaragua; Santa Cruz, Bolivia; and Arequipa, Peru. 

For the lifestyle you'll enjoy in Medellin, the real estate is a tremendous bargain. And the same is true in Cuenca; for the lifestyle it offers, it, too, is a tremendous bargain.

But the lifestyle in one is nothing like the lifestyle in the other, which brings us to the ways these cities differ. (As Medellin is such a large and diverse city, I'll focus on its El Poblado neighborhood for my comparisons.)

Medellin's El Poblado offers a modern, upscale ambiance. It has elegant shopping, spotless infrastructure, glistening new buildings, and more fine dining than you can imagine. New luxury brick high-rises look down from lush, wooded hillsides. Tall trees line the well-maintained streets. And El Poblado is only one of many desirable areas in this city.

On the other hand, Cuenca is one of the Americas' premier Spanish-colonial cities and a UNESCO World Heritage Site. The old cathedral was built in 1557, the historic architecture is well preserved, and the streets are cobblestoned. You'll even see evidence of the Inca occupation from the early 1500s. Yet just outside the historic center, Cuenca also offers new, modern high-rises. So you could live in a modern home, yet have the historic center within walking distance. 

El Poblado is a First World environment; you'll be hard-pressed to find a U.S. city that can beat it. Cuenca is part of a developing country with some Third World characteristics like poor sidewalk and building maintenance. 

Access to the States is easier from Medellin than from Cuenca. Medellin has daily nonstops to Miami, while you'll need to connect (and possibly spend the night) in Guayaquil or Quito when traveling to and from Cuenca. This adds a day to the trip, as well as the cost of lodging and taxis. 

The expat community is far smaller in Medellin than in Cuenca. I can find expats in Medellin—at a local coffee shop or the Irish pub—if I look for them, and a couple of Americans are signed up at my gym. Otherwise, I don't see them around.

In Cuenca, the expat community is big, estimated between 4,000 and 5,000 people. These folks are making a cultural imprint on the city. I'd say that impact is positive. Since the infusion of North Americans to this city, there's been an explosion in the number of nice cafes, restaurants, and book shops, as well as other expat-owned services and businesses. Today in Cuenca, you can find most anything you might be looking for and, normally, an English-speaker to deal with in the process.

But whether an expat community of that size is a positive or a negative for you is a matter of choice. 

The cost of living is higher in El Poblado than in Cuenca but not much higher thanks, again, to the current exchange rate.

The basics in Medellin (food, entertainment, utilities, public transit, taxes, and HOA fees) cost me about US$1,500 per month right now. I believe in Cuenca the total cost would be about US$1,250 for the same lifestyle. Many people live for less than that in Cuenca, but I'm using an apples-to-apples comparison from my own experience.

Bottom line, neither city is expensive, but Cuenca is less expensive than Medellin. 

Which is the better retire-overseas choice?

Impossible to say. Manhattan is not inherently better or worse than New Orleans, after all... but it's a lot different. And the same goes for Medellin and Cuenca.

I see Ecuador as a cultural adventure where life is as different as you can get from the United States or Canada, short of moving to Asia. When I retired to Cuenca at age 49, I shunned places like Medellin, Chile, and Uruguay, because they were too much like the States. I wanted something as different, enriching, and exciting as I could get, and Cuenca fit the bill. 

Today, I think of Medellin as a way to reward myself. It's a treat to be here. Medellin is a way to enjoy perfect weather and an elegant lifestyle that I couldn't afford in the United States. When I bought my place in Medellin 10 years after I'd left the States, at the age of 59, it was exactly what I was looking for at that stage. I wanted an elegant, luxury lifestyle at an affordable price, and Medellin fit the bill. 

And that's the real reason that Medellin is now my "ideal retirement spot"... when it used to be Cuenca. 

You've heard a dozen times that the "perfect retirement location" is different for everyone. But there's more to it than that. Your "perfect spot" can also change with your taste, your age, and your experience living abroad. And that's really part of the fun.

This living overseas thing is an adventure and a journey of discovery that need never stop.

Lee Harrison

P.S. What else this week?
  • Global Investing Expert Lief Simon analyzes what Greece's new anti-austerity government means for the Greek property market:
“The only reasons to get into the Greek property market today are speculation or an interest in residency in this country. When prices do eventually bottom out, whenever that turns out to be, I can't imagine any compelling reason for them to appreciate again anytime in the near term...”
  • Lee Harrison gives 12 reasons to get into global property investing:
“Like me, many people today are combining a number of these agendas. That is, your vacation home, income property, and international investment can also be your future retirement home, earning a good income now while giving you an international presence and increasing in value until your retirement...”
  • Asian Correspondent Wendy Justice explores the attractions and culture in Japan:
“We saw a surprising number of traditionally dressed people in Japan. It was common to see people of both sexes wearing kimonos. In Kyoto, we saw geishas, beautifully adorned in full face makeup, ornate headdresses, and stunning costumes. At the Shinto temples, parents dressed their young children in kimonos and gave thanks to the gods for making them grow and be healthy...”
  • Lauren Brown and Jason Richter explain why Medellin, Colombia, is not only a top choice for retirees but also for expats, entrepreneurs, and investors of all ages:
“The expat and excursion groups and the many social media pages dedicated to social, cultural, and business needs and networking make itfun and easy to become involved and connected...”

Plus, From Lee Harrison This Week:

I've bought a number of overseas properties—both for personal use and as investments—and I find that evaluation of a potential purchase always comes back to a few simple basics. It's a safe and secure process when you follow the rules and use the same good sense that you'd use in your home country.

Specifically, for any property you're considering buying overseas, I recommend you ask yourself these four questions:

#1: Is the location good? As anyone in the real estate business will tell you, location is paramount. You can fix almost anything else with enough time and money, but you can't fix the location. Make sure it's either good or that you have a strong reason to believe it's on its way to becoming good.

In addition to the neighborhood, also consider the distance to the airport and to good medical facilities. 

#2: Would you need to own a car? This is an important question not only for you if you intend to use the property personally but also in the contexts of resale and rental. The ability to walk to stores, restaurants, and administrative services, meaning you don't have to invest in owning a car if you don't want to, makes life more convenient and also more affordable. In the case of a city property, it's not necessary that it be completely walkable; being near convenient public transit is the next-best alternative. Of course, walkability doesn't apply in remote properties that are intended to “get away from it all.”

#3: What's going on next-door? In Santa Marta, Colombia, I looked at a beautiful new high-rise apartment three blocks from the beach with an impressive view of the Caribbean. When I looked out the window, I happened to notice that the adjacent “never-to-be-developed” property was filled with construction equipment. As it turned out, this undisclosed neighboring building was going to block most of the view I'd have been paying for. 

Just south of João Pessoa, Brazil, we looked at a planned community of beautiful town homes a couple of blocks in from the beach. While driving to the property, I happened to notice a billboard announcing the construction of a massive low-income housing project on the adjacent property... again, undisclosed. 

You can't see into the future, and you can't know everything that will happen. But do keep your eyes open to what's going on in the area around you.

#4: In which direction is the Path of Progress moving? Take a big-picture look at any major infrastructure upgrades in the works. If you're a Path of Progress investor, you'll benefit from construction of that new highway or airport. If, on the other hand, you're looking for continued peace and solitude, you'll want to avoid them. Either way, you should consider them.

If you're buying into an existing building, you should also consider the following four questions:

#5: What is the condition of the property overall? Look at paint, general appearance, the pool, grounds, elevators, and facilities. A quality, well-managed building is never in rundown condition. I've heard plenty of excuses about how the homeowners association (HOA) was going to fix things up during the coming year... but a well-managed property doesn't become rundown in the first place.

#6: How strong is the HOA? We all know that HOAs are an annoyance. However, there's no doubt that they preserve the value of your investment. Make sure the rules for appearance and maintenance are being followed and that the HOA is well-funded by reviewing their financial statements (your real estate agent can get these for you). Compare the HOA fees to those for other facilities in the area to make sure they're not exorbitant but are sufficient. 

I looked at several properties in Montevideo, Uruguay, where the agent proudly told me that the HOA had been disbanded to save money and that future assessments would be made to take care of any building needs. I called these “dying buildings” because they were rapidly turning into poorly maintained, shabby properties. 

See if the HOA documents allow—or prohibit—short-term rentals. Many municipalities place restrictions on them. If you want to be able to rent your place out for maximum return, this is a problem. If, on the other hand, you intend to use the property as your residence, then no short-term rentals in the building is a good thing.

#7: How many units are for sale? If a mature building has a seemingly large number of units for sale, it could be a sign of trouble—a big tax increase, an HOA fee increase, or something unpleasant going on in the neighborhood, like a shopping center being built next-door. Ask around to find out why so many units are being offered for sale. The best source of reliable information on this can be the building's doormen. 

#8: What kinds of cars are in the parking garage? This may sound strange, but a building with well-off owners who care about the property will likely have a garage full of nice, well-kept cars. The more expensive they are, the better. If you see old junkers in the parking garage, take it as a warning.

If you're buying in a planned community, consider these four questions:

#9: How many unsold units remain? We were looking into property for sale last week in Mazatlán, Mexico, and found a large, brand-new apartment for sale—with an almost 180-degree ocean view—at a good price. But then we noticed that there was another just like it... and then found two more. After checking the building's completion date, I found it was completed almost four years ago.

Something's wrong here, something I can't see by investigating online. I'm traveling to see the area and property next month, and I'll figure it out. But if you see a large number of still-unsold units in a finished building, you should smell a rat. 

#10: How is infrastructure being funded? Many planned communities depend on property sales to fund the promised infrastructure and community amenities. This can mean that, if sales are insufficient, infrastructure and amenities never get finished, leaving owners holding the bag with unfulfilled sales promises on unimproved land.

I won't tell you to avoid sales-funded developments full stop. However, if the developer needs sales to fulfill his promises, that's an item that should be in your “risk” column.

The golden rule here is to “buy what you see.” This is an oversimplified way of verifying that, if the project were to stop today, leaving the remaining sales promises unfulfilled, you'd still own something that you believe to be of value. 

#11: What is the competition in the area? I once looked at a project in Uruguay that was 2.5 miles from the beach, practically requiring its residents to have a car—call it Project A. The houses were expensive by local standards, between US$250,000 and US$450,000. Project B, in the same town, was located right on the water, offering brand-new apartments for US$75,000, with plenty of unsold units. 

The town became popular with expats—partly due to Project A's promotional efforts—but almost everyone opted for cheaper and more convenient properties in Project B or elsewhere in town. Local competition wasn't the only reason Project A failed, but it was an important factor.

#12: Can the developer deliver what he's promising? I've written about this in detail in the past. Take a look here: 10 Questions To Ask Before Investing With A Developer Overseas.

Buying property in another country can be safe, rewarding, and profitable. Just be sure to follow the rules and apply the same common-sense behavior you would back home.

I'll be at the Global Property Summit starting March 18 in Panama City, co-hosting with Lief Simon. Along with a lot of actionable overseas opportunities, our group of experts will be covering all the tricks of the trade when it comes to buying properties abroad. You can get more information on the Global Property Summit here.

 

Read more...
 

#2: Would you need to own a car? This is an important question not only for you if you intend to use the property personally but also in the contexts of resale and rental. The ability to walk to stores, restaurants, and administrative services, meaning you don't have to invest in owning a car if you don't want to, makes life more convenient and also more affordable. In the case of a city property, it's not necessary that it be completely walkable; being near convenient public transit is the next-best alternative. Of course, walkability doesn't apply in remote properties that are intended to “get away from it all.”

#3: What's going on next-door? In Santa Marta, Colombia, I looked at a beautiful new high-rise apartment three blocks from the beach with an impressive view of the Caribbean. When I looked out the window, I happened to notice that the adjacent “never-to-be-developed” property was filled with construction equipment. As it turned out, this undisclosed neighboring building was going to block most of the view I'd have been paying for. 

Just south of João Pessoa, Brazil, we looked at a planned community of beautiful town homes a couple of blocks in from the beach. While driving to the property, I happened to notice a billboard announcing the construction of a massive low-income housing project on the adjacent property... again, undisclosed. 

You can't see into the future, and you can't know everything that will happen. But do keep your eyes open to what's going on in the area around you.

#4: In which direction is the Path of Progress moving? Take a big-picture look at any major infrastructure upgrades in the works. If you're a Path of Progress investor, you'll benefit from construction of that new highway or airport. If, on the other hand, you're looking for continued peace and solitude, you'll want to avoid them. Either way, you should consider them.

If you're buying into an existing building, you should also consider the following four questions:

#5: What is the condition of the property overall? Look at paint, general appearance, the pool, grounds, elevators, and facilities. A quality, well-managed building is never in rundown condition. I've heard plenty of excuses about how the homeowners association (HOA) was going to fix things up during the coming year... but a well-managed property doesn't become rundown in the first place.

#6: How strong is the HOA? We all know that HOAs are an annoyance. However, there's no doubt that they preserve the value of your investment. Make sure the rules for appearance and maintenance are being followed and that the HOA is well-funded by reviewing their financial statements (your real estate agent can get these for you). Compare the HOA fees to those for other facilities in the area to make sure they're not exorbitant but are sufficient. 

I looked at several properties in Montevideo, Uruguay, where the agent proudly told me that the HOA had been disbanded to save money and that future assessments would be made to take care of any building needs. I called these “dying buildings” because they were rapidly turning into poorly maintained, shabby properties. 

See if the HOA documents allow—or prohibit—short-term rentals. Many municipalities place restrictions on them. If you want to be able to rent your place out for maximum return, this is a problem. If, on the other hand, you intend to use the property as your residence, then no short-term rentals in the building is a good thing.

#7: How many units are for sale? If a mature building has a seemingly large number of units for sale, it could be a sign of trouble—a big tax increase, an HOA fee increase, or something unpleasant going on in the neighborhood, like a shopping center being built next-door. Ask around to find out why so many units are being offered for sale. The best source of reliable information on this can be the building's doormen. 

#8: What kinds of cars are in the parking garage? This may sound strange, but a building with well-off owners who care about the property will likely have a garage full of nice, well-kept cars. The more expensive they are, the better. If you see old junkers in the parking garage, take it as a warning.

If you're buying in a planned community, consider these four questions:

#9: How many unsold units remain? We were looking into property for sale last week in Mazatlán, Mexico, and found a large, brand-new apartment for sale—with an almost 180-degree ocean view—at a good price. But then we noticed that there was another just like it... and then found two more. After checking the building's completion date, I found it was completed almost four years ago.

Something's wrong here, something I can't see by investigating online. I'm traveling to see the area and property next month, and I'll figure it out. But if you see a large number of still-unsold units in a finished building, you should smell a rat. 

#10: How is infrastructure being funded? Many planned communities depend on property sales to fund the promised infrastructure and community amenities. This can mean that, if sales are insufficient, infrastructure and amenities never get finished, leaving owners holding the bag with unfulfilled sales promises on unimproved land.

I won't tell you to avoid sales-funded developments full stop. However, if the developer needs sales to fulfill his promises, that's an item that should be in your “risk” column.

The golden rule here is to “buy what you see.” This is an oversimplified way of verifying that, if the project were to stop today, leaving the remaining sales promises unfulfilled, you'd still own something that you believe to be of value. 

#11: What is the competition in the area? I once looked at a project in Uruguay that was 2.5 miles from the beach, practically requiring its residents to have a car—call it Project A. The houses were expensive by local standards, between US$250,000 and US$450,000. Project B, in the same town, was located right on the water, offering brand-new apartments for US$75,000, with plenty of unsold units. 

The town became popular with expats—partly due to Project A's promotional efforts—but almost everyone opted for cheaper and more convenient properties in Project B or elsewhere in town. Local competition wasn't the only reason Project A failed, but it was an important factor.

#12: Can the developer deliver what he's promising? I've written about this in detail in the past. Take a look here: 10 Questions To Ask Before Investing With A Developer Overseas.

Buying property in another country can be safe, rewarding, and profitable. Just be sure to follow the rules and apply the same common-sense behavior you would back home.

I'll be at the Global Property Summit starting March 18 in Panama City, co-hosting with Lief Simon. Along with a lot of actionable overseas opportunities, our group of experts will be covering all the tricks of the trade when it comes to buying properties abroad. You can get more information on the Global Property Summit here

Lee Harrison

Editor's Note: The Early Bird Discount for this year's Global Property Summit expires in two week. This is your last chance to register saving US$250 per person. Do that here now.

Continue Reading: How To Move Money To Colombia

Read more...
 
Start
Prev
1
Powered by Tags for Joomla
Enter Your E-Mail:

Readers Say

"I wish to congratulate you for the quality of your reports. The plain, matter of fact, but essential and wise information we all need to take vital decisions, especially in these extremely difficult times."

Peter L., United States

Search

"I particularly appreciated your information today about the joys (?) of international rental property. What I admire is your honest, tell-it-like-it-is approach. A lot of people have been hurt by nothing but glowing reports about offshore living from various sources. Your honest, direct approach is a real service."

— Arlean K., United States

Kathleen Peddicord

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.

SIGN UP TO OUR FREE E-LETTER

Sign up for Overseas Opportunity Letter

Receive our editor's latest research reports...absolutely FREE!

letters The Best Places For Living And
Investing in the World for 2015