The plantation's manager is a fourth-generation farmer in Panama with experience not only growing mangos but also selling them. He has long-standing relationships in place with juice companies in Panama, which are standing by to purchase as many mangos as he can produce. Right now, the majority of juice companies in this country are forced to import their mangos, which is far more costly than buying locally. In addition, the developer is in contact with groups in the United States, from dried fruit wholesalers to grocery stores, lining up contracts for selling the plantation's mangos directly into the U.S. marketplace, where they would be worth much more than the local Panama juice companies are paying. (Note that current projections for return for this investment are based on the price the mangos are currently being sold for in Panama, meaning that, again, the projections are conservative.) Phase one of the plantation has been sold out. Phase two is selling at a rapid rate, and implementation is well under way. Thus, again, the planned price increase. I have asked the developer, however, if Live and Invest Overseas readers could have one final chance to get in on this opportunity at the original phase one launch price of US$33,500. He has agreed and will honor that price for LIOS readers for the next two weeks. Thereafter, the price permanently increases to US$36,500. You can request more information here.
"Kathleen, if I rent an apartment in a foreign country, specifically in Central America, do I have to get preapproved and a credit check?" --Joseph B., United States If you're renting short-term, you leave a deposit and pay the rent up front. No credit check or other documentation is required in most cases, as the presumption is that you are a tourist and will leave the country without hassle (that is, the owner doesn't have to worry that you might refuse to vacate the property when the time comes). If you're renting long-term, it depends on where in the world you're renting. The requirements are generally more lax in Latin America than in Europe. In France, even for a grey-market apartment rental (meaning a rental that doesn't go through a rental agency…those rentals require a stack of documents thicker than your combined tax returns for the last 10 years, everything notarized), you'll have to provide proof of income and/or assets and probably a local guarantor (this for sure if you're not a legal resident of the country). To that end, you may be asked to show tax returns from back home, pay stubs, and/or bank statements. In Latin America, the formal requirements for a long-term rental are less onerous; still, as a foreigner who is not a legal resident, you might have trouble finding a landlord comfortable renting to you, depending on where, specifically, you're looking. Landlords don't like renting to people who can just up and leave the country overnight. This has happened often here in Panama City, for example, and landlords in this town are gun shy these days. Credit checks are typically only used and/or useful in the context of a mortgage application…meaning they're relevant only in markets where it's possible for a foreigner to borrow locally for the purchase of real estate. Banks in Panama, for example, will ask for a U.S. credit report from Americans and whatever is available in the UK for Brits when considering a mortgage application.
In one case, the land is collateral for eight investors. If you've ever tried to get eight people from different countries and backgrounds to agree on a single path forward and been successful, please get in touch. You have skills I lack and could benefit from. In another case, my collateral is an apartment. This is even more complicated. The short story is that the contractor walked off the job after having been paid a substantial amount of money for the construction but before finishing the work. Somewhere between the developer signing the agreement with the contractor and the contractor bailing, the contractor stopped paying on his insurance bond that guaranteed completion. The condo development is unfinished, and we who invested along with the developer are left holding the bag. In addition to the direct-developer investment, the lady who wrote in to me last week has lost in other ways, too, though the other investments she told me about aren't write-offs, at least not yet. One is a lot in a development where the developers haven't fulfilled all the amenities. The lot has value but no real market right now. The woman also invested in a renovation project in a colonial city. That didn't work out because the architect she chose (on the recommendation of an attorney I recommended) turned out to be a scoundrel. She managed in this case, though, to come out a little to the good after all was said and done. The nice thing about real estate is that, unless you're leveraged, it's difficult to lose all your investment. Still, holding property that you want to sell but can't can seem the same as losing your investment. I've been investing in real estate for more than 20 years and have bought in more than 20 countries at this point, more than 40 purchases and counting. Most have been positive and profitable experiences. Some are still playing out, and, for these open investments, the current values of the properties are greater than what I paid for them in every case except one. The key is to manage risk. To that end, I follow a few mantras. I break them regularly but do so knowing that I'm breaking them. When I do, I carry out more due diligence and I'm prepared to lose my money. Mantra #1: I don't buy property in a place where I haven't been. The corollary to this rule is to visit any property before investing in it. That's not always feasible. Further, visiting a place and seeing the piece of real estate you intend to invest in before you invest is no guarantee the investment will play out in your favor. I've visited properties and decided, as a result of my on-the-ground research, to invest only to have things fall apart. That said, probably my best and my worst investments to date both have been in properties that I didn't visit before buying. The one that didn't work out was a pre-construction project in the UK. Everything looked good on paper. The location was central in the town where the building was going up. A colleague had a friend involved in the project. Both assured me I couldn't lose. So I acted without making the trip to see the place myself. Unfortunately, thanks to overbuilding in the town, which I would have recognized had I gotten on a plane, the rental projections were optimistic, to put it politely. Worse, I bought with leverage. In the end, this was a total loss. On the other hand, I also acted on an opportunity in Panama City without seeing the project for myself. Again, this was on the recommendation of a colleague. This investment, though, has been, you could say, the most successful of my career. I've made far greater returns in whole numbers from loads of other buys, but, on paper, by the percentages, this one is near-perfect. The property has appreciated nicely in value, year on year, and has generated a double-digit net yield every one of the seven years I've owned it. It has been occupied by renters better than 90% of the time. Lief Simon
Good luck finding this level of sophistication and infrastructure anywhere else in Ecuador outside Quito (which we also would not recommend as a place to live). Why Not Boquete? Boquete has long been heralded by many (starting, in fact, with us, more than 15 years ago) as one of the world's top retirement havens. However, we decided not to include this Panamanian mountain town in our 2014 Index for two reasons. First, the cost of living in Boquete continues to rise. Second, you have other better choices elsewhere now, which we wanted to feature instead. We limit our Index to 21 destinations. This is an arbitrary restriction that forces some hard choices. The truth is, as more places worldwide become more appealing for the would-be retiree, other places, including some well-known, like Boquete, become less so. Boquete is still a great turn-key choice for overseas retirement, but we'd say it no longer belongs on a short list of the world's top 21 choices. One big draw of Boquete is its large and growing expat community. If the idea of retiring to a place where many others like you have already paved the way and stand ready to welcome you to their ranks, you have other more affordable choices, including Cuenca and Chiang Mai, for example, both of which offer super-cheap, high-quality lifestyles (and both of which are included in our Index this year). Puerto Vallarta and Barcelona are two other expat-friendly options featured in our 2014 survey. The cost of living is higher in Puerto Vallarta and Barcelona than in Cuenca and Chiang Mai...and higher than in Boquete. However, the cost of living isn't unreasonable for the quality of life available for purchase. The quaint mountain town of Boquete just can't compete for lifestyle with chic, cosmopolitan Barcelona or Pacific oceanside Vallarta. Why Not Uruguay? Uruguay has gotten expensive, too expensive for the lifestyle on offer, and it's likely to become more expensive still. Uruguayans are used to the devaluation of their peso. They refer to appreciation as atraso cambiario, "the exchange rate is running late." Because of this phenomenon, prices for many big-ticket items in Uruguay (including real estate, cars, and even high local salaries) are quoted in U.S. dollars. Why Not Brazil? High crime rates keep much of Brazil off our radar and out of our survey. That said, south from Ceara to Natal, you can enjoy super-cheap coastal buys in safety. Further, the bureaucracy, red tape, and corruption at all levels involved with getting anything done in this country are significant downsides to life here. The country doesn't make establishing residency easy and offers no retiree benefits program. Also, Brazilians speak Portuguese, which, for most of us, is not as easy to muddle through as Spanish, French, or Italian. Why Not Ajijic, Chapala, San Miguel de Allende, Or Merida? Mexico offers many well-publicized options for the foreign retiree. Why did we choose Puerto Vallarta over the rest of the choices for our 2014 Retire Overseas Index? Because if offers the best option anywhere for the retiree looking for developed Pacific coastal living on a budget. Nicaragua, Panama, Costa Rica, and Ecuador all also offer Pacific coast options, but none is anywhere near as fully appointed as Puerto Vallarta, which offers marinas, country clubs, golf courses, shopping, and fine dining. Yet, you could retire here on a budget of as little as US$1,910 per month, which is more than an average budget for other countries with Pacific coastlines in our Index but a very reasonable amount given the lifestyle on offer. Why Not New Zealand? We like New Zealand as a part-time retirement spot, but we didn't include it in our survey this year because it's just not a realistic full-time option for the typical retiree. The truth is, New Zealand (like Australia) isn't overly keen on the idea of foreign retirees and doesn't make it easy for the retiree to establish residency. In fact, in most cases, it's not possible. Why Not Costa Rica? About three decades ago, Costa Rica decided to make a business of the foreign retiree. The Costa Ricans invested in a formal and successful advertising campaign, targeting Americans primarily. Tens of thousands of would-be retirees from the States took up the invitation and relocated to this beautiful land of hills and rainforests. The benefits Costa Rica offered retirees who became resident were terrific, including the original pensionado program against which others were measured for decades. In addition, way back when Costa Rica made a name for itself as a top retirement choice, the cost of everything from groceries and eating out to prime coastal property was super cheap. Fast forward a couple of decades, and, thanks to investors and speculators, Costa Rica wasn't so cheap anymore, neither its cost of living nor its beachfront real estate. And, while prices had risen dramatically, the infrastructure hadn't kept pace. Retirees were happy to overlook falling bridges and unpaved roads when prices were low. Harder to rationalize putting up with failing infrastructure in the face of appreciating costs. Worse, after working so hard to woo American and European retirees, Costa Rica seemed to change its mind. The Costa Ricans didn't eliminate their famous pensionado program; they simply eliminated most of the tax breaks it had promised, as part of a deficit-reduction austerity package. And they didn't grandfather in existing pensionados. So those who'd chosen Costa Rica for the retiree benefits it offered were surprised and disappointed to find that those benefits existed no more. Now the Costa Rican government is considering a further pensionado program adjustment. They're talking about increasing, maybe substantially, the minimum monthly income requirement to qualify. And, again, if the change is made, existing pensioandos won't be grandfathered in. To renew your status, you'd have to qualify under the new requirements. Kathleen Peddicord P.S. Our 2014 Retire Overseas Index is featured, in full, in this month's issue of our Overseas Retirement Letter. If you're not yet an ORL subscriber, become one now to receive this bumper special annual edition, hot-off-the-virtual-presses. Or you can purchase a copy of the Index on its own here.
The utilities figure for each of our 21 budgets is straightforward; groceries and entertainment, much less so. If you shop at local markets and stick to a basic, local diet, your monthly groceries bill could be US$150. If you shop at U.S.-like grocery stores (which exist in every place on my list below) and want to eat like you ate back home (prime rib, Entenmann's, and French wine), your monthly food bill could be two, three, or four times US$150. Likewise, entertainment. Our Index budgets include amounts for eating out once a week and going to the movies a couple of times a month, say, or perhaps taking one in-country trip per month to explore your new home. You could, if you wanted and your budget allowed, eat out four nights a week and take international vacations twice a year. On top of the overall cost of living wherever you decide to retire you'll have the cost of housing. I recommend renting first, to give yourself a chance to get to know your new home and determine if it is, in fact, the right place for you. For each of the 21 top retirement havens on our Index list, therefore, we indicate an average cost for renting a one-bedroom, one-bath residence in a neighborhood that would be appealing and appropriate for a retiree. After you've been in residence for a while, you may decide you like the place well enough to commit long term with an investment in a home of your own. Buying a piece of real estate in another country can also offer the potential for return, from capital appreciation over time and from cash flow if you decide to rent the place out when you're not using it yourself. Therefore, for each of the 21 destinations on our Retire Overseas Index list, we also figured an average cost per square meter for the purchase of property. This is the best way to consider this. In fact, breaking down a location's property market to an average cost per square meter for a particular kind of property is the only reliable way to compare that location's property market with the property market anywhere else, the only apples-to-apples strategy. In Nashville this week for our annual Retire Overseas Conference, we'll be sharing the results of this year's Retire Overseas Index, including the monthly budgets, the rental costs, and the average per-square-meter cost to purchase real estate for all 21 destinations featured...and a few others, to boot. Here's a sneak preview for some of the destinations being featured... In the Americas: Ambergris Caye, Belize Monthly budget: US$2,055 Rent per month: US$1,000 Purchase per square meter to purchase: US$2,000 City Beaches, Panama Monthly budget: US$2,440 Rent per month: US$1,200 Price per square meter to purchase: US$1,900 Cuenca, Ecuador Monthly budget: US$1,010 Rent per month: US$300 Price per square meter to purchase: US$1,100 Granada, Nicaragua Monthly budget: US$1,040 Rent per month: US$500 Price per square meter to purchase: US$1,500 Medellin, Colombia Monthly budget: US$1,530 Rent per month: US$650 Price per square meter to purchase: US$1,050 Puerto Vallarta, Mexico Monthly budget: US$1,910 Rent per month: US$850 Price per square meter to purchase: US$2,490 In Europe: Algarve, Portugal Monthly budget: US$1,500 Rent per month: US$615 Price per square meter to purchase: US$1,960 Barcelona, Spain Monthly budget: US$1,725 Rent per month: US$1,085 Price per square meter to purchase: US$5,500 Pau, France Monthly budget: US$1,930 Rent per month: US$1,285 Price per square meter to purchase: US$2,300 In Asia: Chiang Mai, Thailand Monthly budget: US$920 Rent per month: US$400 Price per square meter to purchase: US$1,100 (note that foreign ownership of real estate is restricted in Thailand) Dumaguete, Philippines Monthly budget: US$910 Rent per month: US$350 Price per square meter to purchase: US$1,200 Nha Trang, Vietnam Monthly budget: US$660 Rent per month: US$300 Price per square meter to purchase: Foreigners can't own property Kathleen Peddicord P.S. What brings us to Nashville this week? Our annual Retire Overseas Conference! For years, friends have encouraged me to visit Music City. Finally, I was able to engineer a good reason. We arrived yesterday, and I can tell you that my friends' reports did not embellish or overstate. This is a fun town. Live music everywhere. It's not too late to make plans to join us here for what is going to be the biggest retire-overseas event of the year, this Friday through Sunday at the Lowes Vanderbilt Hotel. In addition to the three-day Retire Overseas Conference Aug. 29–31, we're also hosting a first-ever Retire Overseas Expo the day before (Thursday, Aug. 28), from noon until 7 p.m. This half-day special event is open to the public, an ideal way to dip a toe in the retire-overseas waters, and, best of all, absolutely free for Live and Invest Overseas readers. Regular admission is US$25. However, simply confirm at the door on the day that you're a Live and Invest Overseas reader, and you'll be granted full access at no cost. One way or another, therefore, I say: Get thee to Nashville. Dozens of correspondents and expats from around the world will be convening here today through Thursday so they can be on stage with us throughout the weekend to help showcase the world's top retirement havens for the nearly 300 registered attendees. Come on down and join the fun. Details of the Retire Overseas Expo taking place Thursday, Aug. 28, are here. Details of the Retire Overseas Conference taking place Friday, Aug. 29, through Sunday, Aug. 31, are here. See you soon.
I've been on the receiving end of the rumor mill in this part of this country. Someone, for example (I can't remember who...doesn't matter), started telling people that Los Islotes doesn't have any roads and never would have any roads. Those statements are out there in the universe now, being repeated and retold, exaggerated and enhanced. They come back to me regularly. What can I do? Nothing. Except point out that, in fact, Los Islotes is crisscrossed by roads that our Project Manager Gary Mosely has spent the past 18 months cutting, covering, and providing drainage for. I suggest to every naysayer that he come down to have a look for himself. Usually, when I do, I don't hear anymore from said naysayer. Because most people spreading rumors aren't interested in knowing the truth. It's more fun to continue the gossip. I spent the past two weeks in Cayo, Belize. Talk about a Coconut Telegraph. This region suffers more than most. The level of gossip at work here is a marvel. And frightening. In fact, San Ignacio and environs suffer from two levels of rumor-mongering...local and expat. The two cross over from time to time. Belize's infrastructure is Third World. Still, somehow, everybody knows everything about everybody else all the time. The less true or more exaggerated the thing, the quicker everyone knows it. Today's Coconut Telegraphs are powered by social media. While I was in Belize last week, someone forwarded me a Facebook posting by a lady who made a specific and hard-to-believe accusation about something someone said. I know the someone being quoted, so I called him. Nope, he had not made the statement being attributed to him, nor had the event during which the statement was supposed to have been said ever taken place. Why did the lady make the post? Who knows. As they say, it's only fun until someone gets hurt. Rumors are no different. For some, gossip is entertainment. For others, the agenda is more malicious. In my experience, in the developing world, rumor and deception are the friend of the con man (or woman). Bring down your legitimate competition, and you can more easily fleece your mark. What's the point for you, as a would-be expat, investor, or businessman overseas? I'd say it's this: While you want feedback from expats already in residence on what it's like living in a place or what you should know before investing there, you must realize that, by tapping into the local expat community for information, you're going to have to wade through all the gossip. Until you know who's who, who you can trust, and who is operating with an agenda, take everything you hear with a grain of salt. You don't want to end up labeled as part of one clique or another until you know who the cool kids are. Lief Simon Editor's Note: Lief Simon writes a twice-weekly dispatch on living, investing, and doing business overseas called Offshore Living Letter. If you're not on the list yet to receive it, get on board here now.
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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.
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