Our Panama City-based team huddled around the conference table in our office the better part of Friday afternoon trying to find an answer to this question.
Here's the first thing to know on this subject: Rents in this city have fallen significantly over the past 12 to 18 months.
When we moved here two years ago, the rentals market was at a frothy peak. Owners could name their price, and would-be tenants would bid against each other for even modest digs. If you found a place you liked and could afford, you knew to offer a cash deposit on the spot, lest you follow up even later that same day to discover the place had in the interim been grabbed up by someone else.
Our young Marketing Manager Harry, for example, rented a studio outfitted with what amounted to a nod toward a kitchenette (no kitchen sink, for example, and only a hot plate to cook on), because anything bigger was outside his budget.
"Do you remember that place?" Harry joked on Friday. "I can't believe I lived there as long as I did. I guess those few months qualify as character-building..."
Harry paid US$650 per month for the privilege of renting that tiny kitchen-less studio.
And we, shopping for a three-bedroom apartment with space for an office at the time, had four such properties snatched away from us before we learned to bring a pocketful of cash with us to any viewing.
What's the current state of the Panama City rentals market?
Rents have fallen 25% on average, and Harry's US$650 today would afford him a one-bedroom apartment (with an actual kitchen) in a decent building in a convenient location.
What's changed? Well, it's a different world today than it was 2 or 2 ½ years ago. But, specifically, here in Panama City, a whole lot of new inventory has hit the market. New condo towers with units renting in all budget ranges (low-income local to international business executive) have come online, making the long-term rentals market more competitive.
Meantime, hundreds of new hotel rooms (including, notably, in the new, mega-sized Riu Hotel, the city's biggest, opened last month) have also become available, having the same effect on the short-term and tourist rentals markets.
This is all good news. The Panama City rentals market was ridiculously over-heated two years ago. What we're seeing now is a natural, welcome correction. And it's creating an opportunity for you to rent for less in this town than has been possible for years.
We've agreed to reduce the rent for the tenant in our investment rental on Balboa Avenue. The nice Brazilian banker lady who has rented from us for the past two years wants to renew her lease again, but she has asked for a reduction in cost, as she recognizes the realities of the current marketplace along with everyone else.
We could have refused (as I know many other rental property owners are doing) and then hoped to find another long-term renter for a higher amount or maybe tried our luck on the short-term market.
Both those things seemed risky. In a market like this, you take the rent in hand and count yourself lucky to be able to continue to realize a reliable return.
Our net yields over the past four years we've owned this investment property have, at times, been absurdly high (more than 20% per year, for example). We knew that wouldn't last and recognized that we were enjoying an anomalous period in this market's cycles.
Our return last year, given the amount of rent our Brazilian banker lady was paying, netted to about 13%.
Our return this coming year, at the new rent she'll be paying, will net to slightly better than 10%. On a global scale right now, a double-digit net yield is hard to come by. Again, we're counting ourselves lucky.
Can you still buy today at a price that would allow you to realize a reasonable net yield (I'd say up to 8%) from rental income, even given how increasingly competitive this marketplace is growing?
Yep. We'll detail how and where at our Live & Invest in Panama Conference later this month.
We'll also walk through how much you should expect to pay in rent, neighborhood by neighborhood in Panama City and region by region beyond the capital.
This event has been sold out for some time. However, we'll be recording all the sessions and presentations and will make the recordings available as soon as possible following the conference.
We're planning our first Live & Invest in Panama Conference of 2011 for March 29-31. We're not ready yet to take registrations for this event, as we're still shopping for a venue. We need someplace bigger than where we've been holding our Panama City conferences, so we can accommodate more readers. We're thinking the new Riu Hotel will be the place. It has capacity for up to 1,300 conference attendees. That should fit us!
We'll publish full details for this program as soon as possible. Meantime, you can get your name on the pre-registration list to be eligible for special discounts off the registration fee.
Do that here now.
Kathleen Peddicord
P.S. What else this week?
Friend and developer in Belize Phil Hahn wrote this morning to report that he has received the environmental permits for his latest project in this country, Carmelita Gardens. This is an important milestone for Phil that creates an opportunity for you.
Phil now can proceed with his plans to build 18 cottages on the river, the start of his Carmelita Gardens community. In addition, there will be a pool, a café, and a property management office. With these services in place, cottage owners will have an easy outlet for renting their places when they aren't using them.
I'm a big fan of Belize and was sold on Phil's Carmelita community from the first time I saw the property. This is Belize at its best. And you have the chance now to become a part of it at the earliest stage (meaning the best pricing).
Lots are priced at US$35,000, but Phil is offering Live and Invest Overseas readers a 10% discount until his house plans are completed.
That means you could buy your riverfront lot atCarmelita Gardens today for just US$31,500.
In addition, if you start building within one year, Phil will give you another 10% credit on the lot price toward your construction costs. He's doing this to stimulate early construction, which he knows brings big dividends as the project matures...
Here are 11 things I've learned from the school of hard knocks after three international moves across three continents with two kids, a dog, a turtle, a husband, and two businesses...
Thailand is arguably the cheapest place on earth to live well. Intrepid Correspondents Paul and Vicki, on-and-off residents of the country for more than two decades, have long been teasing and tempting me with tales of US$1 Pad Thai lunches and US$11-a-night hotels (including breakfast and free Wi-Fi)...
"In the 1990s," writes Intrepid Correspondent Paul Terhorst, "Vicki and I lived in Las Vegas for two years. Nearly everyone in Las Vegas, we discovered, comes from somewhere else.
"One night at a party, people took turns explaining how they happened to wind up there. My favorite story: 'This is where my car broke down.'
"This woman was on her way from somewhere in Ohio to somewhere in California. Her car broke down in Las Vegas, and she had no money to pay for repairs. She got a job in a casino. That was 26 years ago; she's still there.
"You see this often. People let life happen when they are in their 20s or 30s. The car breaks down. A friend has an inside track to a job at a fine restaurant. Grandma dies. The bank is hiring. We have nothing much going on, so we get a job in a casino, at the restaurant, or in the bank. We move into Grandma's house...
"Then--and here's the point--somewhere in our 30s, we refuse all further change. The purest coincidence got us to where we live. The merest fluke put us in the present job. Now other parts of the world may beckon, other jobs may offer more. No matter. However capriciously we got to where we are, even if simply because our car broke down, we insist on staying there. Further change has become out of the question, no matter how miserable we are.
"This behavior has always mystified me. I'm a fan of capitalism and freedom. Capitalism assumes that if you're unhappy with what you're doing, you'll change.
"But that's not how the world works. If people are unhappy with their jobs, they agitate, join a union, go on strike, lobby for political change, maybe blow up the workplace. But most never even consider changing jobs.
"Similarly, when the landlord raises the rent, people vote for rent control, or sue, or withhold payment, or seek help from city hall.
"But most people never consider moving.
"Everybody behaves this way--except you and me..."
ALSO THIS WEEK From Global Real Estate Investing Guru Lief Simon:
My beat is real estate, but timber qualifies in my view...assuming you're investing in land planted with trees rather than in shares of some timber company.
Historically, timber has enjoyed the best risk/reward ratio of any investment sector. Depending on whose chart of historical returns you consult, timber as an asset category has produced an annualized ROI in the 12% to 15% range every year since they started keeping records on investment risk versus return.
A friend calls timber "a long-held secret of the world's wealthiest people." It's low volatility, a hedge against inflation, and an asset class that operates independent of the stock market.
On top of this, timber is the kind of investment I like. It's real and productive. This is more important right now than it's ever been. If you don't have some of your money in this kind of real, productive asset, you should.
Here's how a direct timber investment should work...
You buy the land. A management company plants trees on it and maintains them for you. They take care of everything--from insect and weed control to thinnings--until harvest time. Come harvest time, the management company organizes the cutting and the sale of the trees. The revenue from the harvest goes to you, as the owner.
Here's the best part: You still own the land, meaning you can replant and start the process over for another harvest.
I'm over-simplifying things, of course, but the point is that you want to be buying the land.
I've seen offers where you buy only the trees and the management company owns the land. Once you harvest the trees, your investment is done...closed out.
And I've seen many offers where you buy shares of the operating company that owns and manages the land and the timber. I find this option much less appealing, because you're not buying a real productive asset; you're buying a company. You have no control over the land, the timber, or how the business is operated. The only thing you control is the timing for when you sell your shares.
On the other hand, you probably don't want to learn how to grow and manage a forest. That's why I recommend direct ownership of the assets--land and trees--with a management company in place to take care of everything for you.
One opportunity that I've long recommended is teak farms in Panama. A friend, Robert Kroesen, who I met years ago during my first few scouting trips to this country, has a reforestation company that today owns and manages more than 3,000 hectares of teak plantations (and that is aggressively working to acquire more land).
With Robert's help over the past seven or eight years, I've learned a little about this business and have come to appreciate the opportunity tremendously.
Robert's company, United Nature, was founded in 1993, meaning he is now getting into full harvest for some of his early plantations. Growth rates have been good in the region of Panama where United Nature has cultivated its plantations, and Robert is positioned now to achieve an excellent return on his initial investment.
Robert started United Nature with a single partner as a personal investment undertaking. About 10 years ago, six or seven years after he'd been planting for his own portfolio, Robert began putting together packages for other investors. This had never been his intention, but, when people saw what he was doing and that he had the infrastructure in place to manage the plantations, they came to him asking to invest.
Rather than sell those people shares in his company, as other plantation operations in Panama were doing, Robert segregated out specific parcels of land for people to own directly. He continued to manage the plantings, the maintenance, and the harvesting, but each investor was given the opportunity to own his own piece of land and the trees planted on it outright.
Each investor with United Nature decides himself when to take the final harvest (though I'd say the sensible thing would be to take Robert's team's advice on this). And each investor can sell his land and/or his trees whenever he wants.
There is an active and expanding market of investors looking to buy older plantations. As other investment types become increasingly volatile and uncertain, more and more investors are looking to things like timber for long-term safety. However, many don't want to have to wait the full 17 to 25 years from initial planting to harvest. They're willing to pay a premium to accelerate the exit and the payout.
Robert's projected annualized ROIs are in the low teens.
This modest statement, though, doesn't do justice to the real opportunity here. Because this is such a long-term proposition, the total return come harvest time can be extraordinary. US$1 can turn into US$13.
Yes, I'm invested with Robert.
To learn more about investment options with United Nature, go here.
Another benefit to an investment in Robert's teak plantations, by the way, is that it can bring you a residency visa in Panama. With an US$80,000 investment in a registered reforestation project (United Nature's reforestation plantations qualify), you can arrange permanent residency visas for you and your dependents (that can lead to Panamanian citizenship).
Read more...
As Kaitlin explained to our group Friday afternoon, she and her friends learned that you don’t have to spend a lot to enjoy a big experience in the City of Light. Sometimes, you don’t even have to spend a little. Some of the best experiences this city has to offer come absolutely free. For example, Kaitlin explained...
- One day every month and every Bastille Day, most all museums in Paris offer free admission. Every Wednesday, for example, La Maison Européenne de la Photographie (5-7 rue de Fourcy, 75004 Paris; tel. 01-44-78-75-00) and La Fondation Henri Cartier-Bresson (2 impasse Lebouis, 75014 Paris; tel. 01-56-80-27-00) offer free evening admission.
- Every Thursday, galleries in the 3rd, 7th, and 8th arrondissements offer vernissages--that is, free openings with wine. Often, you can often meet the artist or the gallery owner.
- Right now through the end of August, Paris Plage, the beach built from sand trucked to Paris and deposited along the bank of the Seine in the 4th arrondissement, offers free access to riverside fun, live music, games, even free water aerobics (not in the river but in the public swimming pool that’s part of the annual Paris Plage venue).
- You can take a free guided tour of the Fragonard Perfume Museum (Le Musee du Parfum), housed in a Napolean III townhouse.
- Galleries Lafayette, one of this city’s grands magasins, offers free fashion shows every Friday at 3 p.m.
- Several restaurants in the city provide complimentary plates of food when you can order cocktails. In the 11th arrondissement, La Cordonnerie (142 rue Saint-Denis, 75002 Paris; tel. 01-40-28-95-35) offers couscous with your drinks every Thursday and Saturday starting at 8.30 p.m. In the 10th arrondissement, the Tribal Café (3 cour des Petites-Ecuries, 75010 Paris; tel. 01-47-70-57- 08), one of the pioneers of this "formule," serves fried mussels every Wednesday and Thursday from 9 p.m. on, and couscous Friday and Saturday nights.
- Meantime, wineries around the city offer free tastings in the hopes that you will be tempted to buy bottles of your favorites to take home with you. The prestigious Caves Taillevent (199 rue du Faubourg Saint-Honoré, 75008 Paris; tel. 01-45-61- 14-09) gives tastings every Saturday from 10 a.m. to 2 p.m.; La Grande Epicerie du Bon Marché, (38 rue de Sèvres, 75007 Paris; tel. 01-44-39-81-00) does tastings Fridays and Saturdays from 11 a.m. to 7 p.m. and almost every day during the annual wine festivals; and Petits Bouchons (105 rue Cambronne, 75015 Paris; tel. 01-47-34-89-31) organizes tastings practically every weekend, often with the wine makers themselves.
Kathleen Peddicord P.S. What else this week?
- "France and the United States date to about the same time," began French friend and legal expert Jean Taquet in his address to our group assembled in the St. Petersbourg Hotel in Paris this week."The trouble in France was that, unlike in the United States, where the enemy of the Revolution wore red coats, the enemy of the French Revolution, the aristocracy, was unrecognizable on sight.
"Therefore, the French take it as part of the birthright of their Republic that no one and nothing can be taken on sight. Representations can be deceiving, the French believe. Therefore, they are interested in only what is written down, only what is on paper.
"This is the explanation for the French love of paperwork.
"I don't say this excuses the perspective, but I hope it will help you to understand why, in this country, the document and the dossier are all that matter." Here's another thing to understand about the French perspective...
- "I have just recently discovered your website and its interesting and exciting information," writes a new reader this month.
"However," she continues, "I have to say that most all the countries you promote outside the EU as safe (this is part of your pitch) are regarded as unsafe to dangerous by different government agencies counseling their citizens about international travel, including Canada, the United States, France, and Switzerland.
"We have young children, and personal security is top on our priority list when it comes to making a move abroad...
"And then this, from another concerned reader, in response to a recent report we published on low-cost medical and dental care in Malaysia.
"Kuala Lumpur has the highest murder rate in the world! I would not go there if the dental work were free..."
Let's take the general safety question first…
- "It's always a good idea to rent first when making a move overseas," writes Asia Correspondent Wendy Justice, "especially in a place like Malaysia, which is so culturally and ethnically diverse. In a place offering so many options, you want to spend time on the ground before making a determination as to the right location for you.
"From the hustle of the capital city of Kuala Lumpur to the laid-back state capitals on the island of Borneo...from the historic charms of Georgetown, Melaka, and Ipoh to the idyllic beach communities of Cherating, Kuantan, Teregganu, and Mersing, each region of this country comes with its own way of life. You should try one or more on for size before thinking about investing in a home of your own in this country.
"The good news is that it's easy for a foreigner to find a rental in Malaysia…"
- Lind Adams of the United States writes this week to ask:
"Kathleen, could you please address some of the possible pitfalls to watch for when attempting retirement to Panama? With all the vast experience and knowledge you and your staff have, I am sure you could offer some good information on things to be cautious about when making such a move...
"Here you are...10 things to understand before you move to Panama..."
ALSO: From Global Real Estate Investing Guru Lief Simon: " Paris is a market that holds its value." That's how Devon de la Salle from the French property agency Imoinvest began her presentation to our Live & Invest in France group this week. Devon's a real estate agent, but that doesn't make her assertion any less true. Even through la crise, as the French call the global financial meltdown we've been living through, Paris apartments, indeed, have held their value. Ask a Frenchman why this is, and he might tell you it's because his countrymen are so stubborn. Not to overstate the situation. There was a decline last year in number of transactions, but this is recovering. The number of sales transactions so far this year is up 76% compared with last. There have been declines in values in sections of the city, as well, but, again, prices are rebounding. Average values across the city are up by 5.3% on an annual basis through April. Why is Paris continuing so stable and strong? Maybe it has something to do with the French temperament, but I'd say it has more to do with the universal and perennial appeal of this city, the most touristed in the world. And, importantly, Paris' ability to ride out the current storm has to do with the French banking system. There's no such thing as "creative financing" here in France. "I worked as a real estate agent for years in California," Devon explained today, "and, boy, did I love creative financing during the heyday of the market in that part of the world. I made a ton of sales thanks to creative financing. But then we all saw the downside to this approach..." The trouble in the Paris market today is lack of inventory. There are definitely more buyers than sellers right now. This means you have to be in the market, ready to make an offer when a property that fits your criteria crosses your radar, especially if your focus is the central arrondissements--that is, the 1st through the 8th. Stephane Adler, our French notaire, who also addressed our group today, confirmed. As in most of the world, there's no Multiple Listing Service in France. However, this country has what's referred to as the " notaire system" for the purchase of real estate. You can't buy a piece of property in France without a notaire, and for every transaction, careful documentation is kept, including particulars such as number of sales and price per square meter arrondissement by arrondissement. In other words, even though you can't do a comps search, you can reference a great deal of information to help you read this market at any time. Notaire data right now shows us just what anecdotal experience and real estate agent speak tells us, as well. This market slowed, and prices fell, slightly. But recovery is well under way. I'd suggest that if you've ever considered investing in a Paris pied-a-terre, this is a moment of opportunity to act, especially if you’re shopping with U.S. dollars. The euro is down sharply against the Greenback, meaning you've got more buying power than you have had in more than a year. Look for an apartment in the heart of the city (again, the 1st through the 8th arrondissements) selling for 300,000 euro, give or take. This budget won't buy you big (perhaps one bedroom), but it will buy you a solid asset that you can look forward to holding its value for you over the very long haul. It’s a straightforward proposition for a foreigner to borrow locally to buy real estate in this country. Longtime friend Tahmiane Madani, Managing Director of France Home Finance, walked attendees at our conference this week through the process and the options.
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.
That first visit, I met with a real estate agent who greeted me dressed in cut-off shorts and bare feet and who took me for a tour by boat, which, he explained, was the only way to see much of the island. Remember, three dirt roads... That was 23 years ago. Returning to Ambergris this week, I barely recognize the place. The Sunbreeze is still here, but it's double the size I remember and now includes conference facilities. Today it's one of dozens of accommodation choices on this island, including four- and five-star international-standard resorts like the Victoria House at the island's southern end and Coco Beach up north. Some of the roads criss-crossing San Pedro (yes, there are more than three) are even paved! There are big grocery stores, furniture shops, spas, salons, a fitness club, golf cart rental agencies, and too many real estate agencies to count. It seems the agents (at least those I've met with) now wear shoes. And today you can drive the island nearly end to end, as we did yesterday afternoon. "The condo market went crazy on the island four or five years ago," our hostess for the tour explained. "At the upper end, they were selling for $500,000, $700,000, even $1 million. "That market has disappeared," she continued. "In fact, the market overall dried up dramatically a couple of years ago, but it's returning. This first quarter of 2010, we're seeing sales again, mostly at the under $300,000 level." One agent I spoke with tried hard to persuade me that this market is more than returning...that it's moving up quick. "We're still at the early-in stage here," he explained. "I see a tidal wave of interest building and tremendous appreciation on the horizon." Maybe. More likely right now is a good time to hit these white-sand beaches in search of fire-sale opportunities. Kathleen Peddicord P.S. Beyond the nearly unbelievable level of development since I last walked these shores, the other thing that has impressed me this visit to Ambergris Caye is the community of expats that has established itself here. This is a place now where you could settle in among like-minded fellows, be made to feel welcome, and enjoy all the comforts and services of home straightaway.P.S. What else this week?
- I stood off to the side of the road, out of the way, while the good people of San Ignacio, Belize, went about their midday business. I watched as the elementary schoolchildren, having finished their morning studies, filed out onto the street, skipping and racing and giggling as they made their ways to their respective buses for the ride home for lunch. Across the road, the river gurgled, and children too young to have been in school all morning splashed in it in raucous defense against the noontime heat. Vendors offered cold drinks, fresh fruit, fried fish lunch specials, pirated DVDs, housewares, and canoes for rent from small wooden structures and open-air huts. Young mothers passed by on bicycles, their babies on their backs or balanced on their handlebars.
The canoe man dragged one of his biggest canoes down to the riverside and positioned it on the bank for our eventual use, as we'd asked him to do. I waited and watched, then, finally, identified a lull in the traffic and darted across the road to make my way down to the river to join the others.
Such a busy place for the middle of nowhere.
The surprise, though, is that this place, San Ignacio, is not nearly as nowhere as I remembered it to be...
- The most important thing to understand about findingrental accommodation (short or long term) in a foreign country is that you can't do it long distance. Not if you want to get a good deal and avoid surprises.
For, to get a good deal, you must shop beyond the Internet market, and, to do that, you must have feet on the ground, either yours or those of a reliable local contact you trust.
You can begin your search long distance, googling "For Rent" opportunities in the place where you'd like to spend time. You'll find those houses and apartments listed either by other gringos (that is, fellow non-locals) or by locals with the wherewithal to advertise their rentals on the Net. In other words, this route leads to the high-ticket and priced-for-the-gringo-market properties.
Google "Se Aquila" (in a Spanish-speaking market) or "A Louer" (in a French one), and you improve your chances of penetrating the market to a more local level. But the real deals never make it anywhere a search engine could find them.
- "With so many pretty little towns in the region," writes France Correspondent Lucy Culpepper in her feature report on the Béarn region of that country in this month's issue of the Overseas Retirement Letter, "it's difficult to choose a favorite. But, for me, the town of Morlaas stands out. It is a good size, not too big or too small. I find it very welcoming, offering every facility and service you need, plus aninteresting historical center and a beautiful country setting...
ALSO THIS WEEK, from resident global real estate investing expert Lief Simon: The real estate market in Panama City is going to crash, isn't it? Some think so. On the surface, this seems the safe position to take. Much of the world has seen precipitous real estate price declines over the past two years, and, yes, the Panama City market has softened noticeably. Meantime, dozens of buildings remain under construction. As all of this new inventory comes online, and investors and speculators who bought pre-construction try to off-load their purchases, the thinking goes, this market will be flooded. And it will bottom out.
That's the popular thinking, but it's superficial and misguided, overlooking important fundamentals...
Aug. 22, 2008:
“My concern is that Nicaragua is a socialist/communist dictatorship. Back in the 1980s, land was taken from Americans. What assurance have you that this isn't going to happen again?”
-- Maritza P., United States
In fact, the land confiscated in the 1980s in Nicaragua was taken from Nicaraguans. Perhaps some land was taken from Americans, as well, but, fundamentally, this was a Nicaraguan v. Nicaraguan issue.
However, to answer your question directly: You have no assurance that the local government isn’t going to confiscate your property…not in Nicaragua…and not anywhere else either. In the States, they call it Right of Eminent Domain…which translates, roughly, to mean that the U.S. government has the right to take your land (or house or whatever) if it believes it has a better use for it (say a highway or the expansion of an airport).
The possibility of national confiscation exists everywhere. Is it more of a concern in Nicaragua right now than anywhere else? I don’t believe so…
***
“I am gathering all the information I can about moving to Panama, either Panama City or Boquete, from Tyler, Texas. My husband, who is a retired university professor, and I are searching for an affordable long-term lease while we settle in and look everything over. I’m having difficulty finding many one-bedroom or small home leases to consider. How do you think would be the best way to find out what’s available?”
-- Pat F., United States
I understand, and I sympathize. It’s no easy thing right now to find an apartment to rent in Panama City. Everyone we spoke with before taking up residence here last month told us not even to try to arrange a Panama City rental long-distance. You’ve got to be on the scene, they assured us, ready to go to see an apartment as soon as it becomes available for rent and prepared to make a decision and leave a deposit on the spot.
We dismissed these suggestions as so much sensationalized rhetoric at first. But, as we owned a small apartment in the city already, we decided not to push things. Sure, it’ll be easier to find a bigger place once we’re in the country, we figured…
Easier…but still no piece of cake. The reports we’d received of how competitive the market has become? In fact, they were understated. I spent a solid two weeks pounding the cracked and muddy pavements of this town searching for an appropriate rental that fit our budget. In the end, we increased our budget twice…were gazumped…and finally resorted to a personal plea to an owner friend of a friend.
Bottom line, though, we’ve found a great place that we’re looking forward to moving into next week. Here’s the secret: Don’t try to go it alone. Enlist a local agent’s help. We worked with Giulia Gonzalez and recommend her highly. You can contact her here: Panama@LiveandInvestOverseas.com.
Having said that, here’s the conundrum: An agent (like Giulia) earns her money as a percentage of the rental rate. Meaning an agent isn’t typically interested (especially in the current market, where there’s no shortage of high-end business) in spending a lot of time helping you find a small, cheap unit. Because her fee is likewise going to be small.
Your best bet for finding a small, cheap rental is through the local classified ads. However, unless you speak fluent Spanish, practically speaking, this doesn’t work. Maybe you can make out the ads…but can you call to schedule viewing appointments? Can you ask questions of the owner to clarify details? Can you review the contract (which will be in Spanish, of course)?
If your language skills aren’t up for the challenge, you need an agent’s help.
Which brings us back to our conundrum.
Here’s my suggestion…the strategy we employed to find a studio apartment for our marketing manager: Engage an agent (like Giulia) and offer to pay her a reasonable flat fee to search the classifieds for you, to arrange the viewings, to help you understand the particulars, and to review the contract. Pay her enough to make it worth her time. You’ll save money (and time and hassle) in the end.
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