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Live in Panama City





Arriving in Panama City, you recognize instantly that this town is open for business, pushing for growth, and both embracing and chasing prosperity. Your heart rate quickens, and your mind works quicker, too, trying to keep up with the commotion all around.

Arriving in Medellin has the opposite physical effects. Your heart slows a bit, your mind settles.

Live in Medellin





Unlike Panama City, Medellin's cityscape isn't all high-rise condo towers and features nary a single building of glass or steel. From any height (the windows of one of the city's luxury penthouse apartments for example, or the top of one of the surrounding hills), Medellin appears a sea of red clay tiles and red brick buildings interspersed regularly by patches of foliage and flowers. The effect, again, is calming, peaceful.

You can learn a lot about a place both from and by its taxi drivers. They're a top source of getting-to-know-a-city information and insights, of course, but they're also a barometer of the mood of a place. In Panama City, taxi drivers are in a hurry. They honk their horns constantly. They weave in and out of traffic, from lane to lane, pushing for constant progress. They can't abide sitting still or even slowing down and tend to run traffic lights and ignore things like "Stop" signs. They also tend to be unhelpful, even rude. A Panamanian friend describes them as "among the least appealing people on earth." I can think of a handful of exceptions (including our own retired taxi driver, Alberto), but, in general, I'd agree with my friend's assessment.

In Medellin, the taxi drivers, like their city, are gentler and calmer, happy to stop to offer directions or even to chat. In Medellin, you rarely hear the honking of a car horn, not by a taxi driver and not by anyone else either. It's also worth noting that, in Medellin, taxis are not only ever-present, but also always painted yellow and metered, unlike in many of the places where we recommend you spend time. Again, orderly...genteel.

Medellin is impressively green, with trees, plants, and small gardens everywhere, and remarkably clean. In the central neighborhoods, you see no litter. The metro, a point of pride for the local population, is spotless and like new. At every station and in every train we've ever ridden, I've looked for but have been unable to find even a cigarette butt or piece of gum on the ground.

Panama is working hard to clean up and green up its capital city. The long stretch of parkland along the bay known as the Cinta Costera has dramatically changed the face of Panama City for the better (and is being expanded). Still, while one might describe Medellin as genteel, an appropriate adjective for Panama City might be gritty.

Walking around Medellin, especially outside the central tourist zone, Lief and I feel like an anomaly. This is less and less true, as Medellin becomes more discovered by expats and retirees. However, in Panama City, Americans are everywhere. We have been part of the landscape in this city for nearly a hundred years.

From a cost of living perspective, I'd put these two cities on par...depending on the relative strength of the Colombian peso. Right now, the U.S. dollar is right around the middle of the range it's traded in versus the peso since we began paying attention a few years ago. We watch this, looking for opportunities to exchange dollars into pesos to cover carrying costs for our apartment in Medellin. In Panama, where US$1 is US$1, this isn't an issue. The American in Panama has no exchange-rate risk to worry about. If you intend to retire on an income fixed in dollars, this can be an important plus.

The most exciting thing about Medellin from a value point of view is the cost of real estate. The real estate market in Panama City has settled noticeably from its boom-time highs of five or six years ago. Today, you can buy in this market for US$1,500 to US$2,200 per square meter (down from the US$2,000 to US$3,000 per square meter of the golden age of last decade).

In Medellin? You can buy in El Poblado, considered the best address in the city, for as little as US$1,200 per square meter (resale). In less central, more local neighborhoods, you can buy for less.

The real estate market in Medellin reminds me of the market in Panama City when we first began paying attention to it about a dozen years ago.

Panama is one of the world's most welcoming countries when it comes to establishing residency. In Panama, the would-be expat, retiree, or entrepreneur has more than a dozen options for how to establish full-time residency, including the new "Friends of Panama" visa option, which amounts not only to the most user-friendly, turn-key residency option in the world today but also the most user-friendly, turn-key residency option in the history of residency options. Plus, it can lead to a work permit, which is a big deal.

Colombia, too, though, offers good foreign residency options, including one for pensioners and another for investors. The minimum investment requirement in each case can be less than for comparable options in Panama.

One practical matter that is not as straightforward in Colombia as it is in Panama is opening a bank account. It's not possible as a foreigner to open a local bank account in Colombia unless you have a personal introduction to the bank. If someone tells you otherwise, they're speaking optimistically and not from real world experience.

The alternative is to open an account with what's called a "fiduciary," the local equivalent of Charles Schwab. Unlike opening a bank account, this is relatively straightforward and a reasonable strategy for dealing with local bills. The downside is that transaction fees can be high.

The other downside to Medellin compared with Panama City is that few in Medellin speak English, whereas, in Panama City, it's very possible to get by speaking no Spanish.

In addition, Medellin (again, very unlike Panama) is not a tax haven, and taxes are high. Living in Medellin, your tax burden could increase, depending on your nationality, where you hold legal residency, and where your income comes from. The country even imposes a wealth tax (after five years of residency). Note, though, that moving to Colombia with only retirement income should be a tax-neutral event. Colombia, like most countries, doesn't tax foreign retirement income.

Unlike Panama, Colombia imposes exchange controls. These are manageable if you plan and execute any investment in the country carefully and correctly. But, again, they're not an issue at all living in Panama.

Bottom line, here's how I'd break all this down...

Living in Panama City Versus Living in Medellin:

Cost Of Living: It's a tie, more or less, depending on the relative strength of the Colombian peso...

Cost Of Real Estate: As much as 50% less expensive in Medellin...

Climate: Way more comfortable in Medellin...

Quality Of Life: This is completely subjective and impossible to pin down. Nevertheless, I'll go out on a limb and say that the overall quality of life is much more appealing in Medellin than in Panama City...

Ease Of Residency: Panama is one of the easiest places in the world for a foreigner to establish full-time legal residency, especially if he comes from one of the countries included in the new "Friends of Panama" visa program. However, Colombia is also a very straightforward option in this regard. Certainly, I wouldn't take Colombia off my list for fear of a complicated struggle related to becoming a resident...

Ease Of Banking And Doing Business: Here, Panama wins hands down, with its international banking industry (the exchange-of-information treaty the country signed with the United States in 2010 notwithstanding); its lack of any exchange controls; the absence in this market of any currency exchange risk (as Panama uses the U.S. dollar as its currency); and its greater prevalence of English-language speakers...

Infrastructure And Accessibility: Another tie...

Taxes: Panama is the screaming champion on this score, a true tax haven, while Colombia qualifies as a high-tax jurisdiction, with, for example, a 33% corporate tax rate. Again, though, if you're a retiree making a move with retirement income, you probably don't have to care about this...

Health Care: Top notch on an international scale in both cities...

Ease Of Settling In: Panama City is a kind of halfway house for expats, a very easy and comfortable first step overseas. Medellin is more an emerging expat destination, though it is more discovered and therefore easier to navigate as an expat or foreign retiree all the time...

Which place might be better for you?

I can't say. As I remind you often, it depends on your personal circumstances, your priorities, and your preferences. What is your current situation and what kind of experience are you looking for?

I can tell you that we've decided not to try to choose but, instead, have worked over the past few years to incorporate Medellin into our long-term retire-overseas plan.

As a new friend in Medellin, another expat who also divides his time between that city and Panama City, put it recently: "Do business in Panama but live in Medellin. That's the ticket..."

Lief and I would agree.

We won't be relocating from Panama anytime soon. We've based our business here for the long haul. However, we have made a commitment to Medellin, too, with the purchase, two years ago, of an apartment intended to be another home base for us and where we hope to be able to spend time regularly starting later this year.

We're even making plans for a satellite Live and Invest Overseas office in Medellin, to complement our base in Panama City. Stay tuned.

Kathleen PeddicordContinue Reading:

  • What Is A Cedula?

Image sources: Medllin - Antioquia and Hollic


The "penthouse life" you might call it, complete with waterfront two-story penthouses in buildings with saunas, spas, massage rooms, squash courts, and 24-hour concierge doormen and supported by five-star restaurants, trendy bars, and international-brand shopping (Tiffany, Hermes, Cartier, Rolex, etc.) nearby.

We spent four days in Manhattan over Christmas, indulging in that kind of life. We ate at steak houses with white-glove service, stopped for champagne cocktails, shopped Fifth Avenue, and ate US$20 hamburgers for lunch (once). By the end of the four days, Lief and I both were eager to move on. Who could afford to live like that indefinitely? Not us.

At least not us in Manhattan. However, here in Panama, we're realizing, not only is that standard of living available, but it comes at a price that many more of us can absorb.

Specifically, this kind of living is on offer on a little peninsula in the heart of Panama City called Punta Pacifica. On this spit of land, the highest-end of any high-rise towers in this city of high-rise towers have been built, including the infamous Trump Tower. In addition to ultra-modern, ultra-amenity buildings, this area has been developed to include real sidewalks (uncommon in this city), grassy medians (non-existent elsewhere in this city), park areas, and lots of trees and shrubs. As the final few of the towers to be erected here (it's a small area, so only so many buildings are possible) are nearing completion, it's also one of the least congested and quietest spots in the city. Everywhere in Panama City is under construction or renovation in some way, including in Punta Pacifica, but, again, the work in this small region is nearing an end, making it unique and accordingly appealing.

As it's a peninsula, all of the buildings have front-line water views from at least one side. All of the buildings also have all of the amenities you could ever hope for and compete with each other on this score. As I mentioned, these buildings compare with what you can find in center-city London and downtown Dubai.

Just a few minutes away is Panama City's high-end shopping mall, MultiPlaza, which has just expanded to add dozens of new internationally recognized retailers. There's the paneled wine bar in Trump Tower for evening respites and all over Panama City you'll find truly five-star restaurants, where the food, the ambiance, and the service can be compared favorably with what we recently enjoyed in New York.

All of this comes at a cost, of course. Punta Pacifica is the most expensive living option in all Panama. Per-square-meter sales prices average US$2,000 right now (except in Trump Tower, where agents are trying to get US$2,500 per meter and more...don't pay it). Penthouses rent for US$4,000, US$6,000, and more a month. Monthly condo fees can add another US$500 to US$1,000 monthly. A couple of drinks in the Trump Tower bar will set you back US$20.

However, comparable digs in comparable buildings with water views in Manhattan or London? They'd cost you multiples of what you'll spend in Punta Pacifica. This is one of the few legitimate examples worldwide of being able to buy what qualifies as true luxury-level living for a fraction what you'd spend for the same level of living in one of the world's recognized brand-name cities. If luxury is what you want but you can't afford it in the places where jet-setters and rock stars typically seek it out, this would be a very good option to consider.

Our new Panama Letter Co-editors, Denis Foynes and David Sexton, introduce subscribers to this small and unique section of Panama City in this month's issue. Even if you're not in the market for the luxury life, I think you'll appreciate what it means about Panama City's future prospects to be able to report that this lifestyle is among the many available here at a very competitive price.

Their report is being finalized and should be in subscribers' e-mailboxes shortly.

Kathleen PeddicordContinue Reading:


As well, Casco Viejo boasts central squares of the kind you find in European cities, with wooden benches and trees for shade, plus narrow streets paved with narrow bricks, restaurants and cafes with sidewalk seating, eight historic churches, the Panama Canal Museum, and the Teatro National (where we recently saw a production of "Tosca"). In this compact section of the city surrounded by water on three sides, a UNESCO World Heritage Site, you find more of interest per square meter than anywhere else in the entire country. Really, you could make an argument for the position that there's more to discover and enjoy in Casco Viejo (more history, more architecture of note, more nightlife) than anywhere else in all Central America.

I was introduced to Casco Viejo about 12 years ago by a friend, an American living in Panama who understood my interest in centuries-old tumbledown structures of brick and stone. One morning, my friend told me he had something special to show me. Turning the corner off Avenida Balboa and passing by the garishly painted Oriental-style arch that stands, still, today, at one entrance to Casco, as residents refer to it, I was instantly delighted by the row after row of two-, three-, and four-story colonial structures with shuttered windows and iron-railed balconies.

So taken was I by the collection of historic structures before me that I didn't see what was all around them. Trash on the sidewalks and in the gutters...barefooted, barely clothed children...skinny, mangy mutts...people hanging out in open doorways at ground level and from open windows above, nothing better to do that fine sunny morning...

Twelve years ago, Casco Viejo was a barrio. Speculators had just begun buying up the old colonial buildings, and, here and there, one or two had been renovated. But the picture overall was of a ghetto. Those early-in investors had their work cut out for them. Before they could renovate or rehab, they had to evacuate. The big old houses were occupied, most times, by maybe a dozen or more people representing multiple families, often all squatters.

Lief and I were among those early buyers. A couple of years after my first visit to the district, we bought a French colonial-style building on the corner of the main plaza and renovated the 400-year-old building into three apartments and a ground-floor office. We were living in Ireland at the time but housed our Panama City-based staff in the little Casa Remon office and stayed in one of the apartments above it when we were in town. When we weren't, the three apartments were rented. About five years ago, the building sold for about two times what had been invested in it.

That gives you an idea of the rate of appreciation in this sector over the half-dozen years or so leading up to 2008-2009. Prices have stabilized and perhaps fallen slightly since, but, out here on this little peninsula, there's been no crash. Still many buildings remain unrenovated, but investors aren't desperate to sell. These are properties with intrinsic value, and global interest in this small section of Panama City continues to expand.

Since my first visit a dozen years ago, Casco Viejo has been spruced up and cleaned up in many ways. The entrance from Balboa has been reconfigured. The old Oriental arch remains but now is overshadowed by a broad new passageway. While the former narrow, not-quite-double-lane road in was a gauntlet through street vendors, beggars, and boarded-up wooden shacks, today's entrance, which I saw for the first time a few weeks ago when we made the trip to Casco for our evening of opera, compared with the old one, qualifies almost as grand and genteel.

Today's Casco Viejo is home to dozens of restaurants, bars, cafes, and nightclubs, as well as nicely renovated and outfitted condos. If your budget isn't small, this is a great Panama City lifestyle option.

Even if your budget is modest, Casco Viejo could be a great choice if you're flexible and open-minded. Apartment-shares aren't hard to come by.

Cost of living here aside, again, nowhere else in Panama is as charming or romantic.

This month's issue of my Panama Letter features a full report on expat life in Panama City's most historic zone. If you're a Panama Letter subscriber, you should have received this special issue in your e-mailbox last week. If you're not yet a Panama Letter subscriber, you can get on board here now.

Kathleen Peddicord

P.S. What else this week?

  • Chris and Cindy Bouchard came to Puerto Vallarta for a three-month sabbatical. They had no plans to move to Mexico...or anywhere, for that matter. They just wanted a break. Then they'd get back to their real life.

So, when the three months were over, they returned to their home in Vancouver, Canada.

Back in Canada, though, something occurred to them. Their life in Mexico had been better.

"We'd spent our three months in La Cruz, which is 15 miles north of Puerto Vallarta," Chris and Cindy explained to the group assembled for our Live and Invest in Puerto Vallarta Conference last week. "We didn't know anything about the area, really, before arriving, but we were captivated by the place...

"Bottom line, though, it is possible to buy a condo here for as little as US$100,000 or less, and that's a remarkable thing given the location and what you're buying into.

"The market in Puerto Vallarta is unique, a kind of a microcosm in relation to the rest of the country," continued Wayne, who has been a full-time expat in this part of the world for 16 years.

"Prices are down from the peak, and, fewer buyers means better deals. Shopping here, though, you have to keep in mind an important fundamental about this marketplace. About 95% of the property here in Mexico is held debt-free, with no loan against it. That means that few sellers, even in this down market, are in a need-to-sell position. Most of those selling want to sell. It's possible to negotiate big discounts off asking prices but not typical. This may not make sense to you, as a buyer coming into such a down market, but it's the reality. You can offer 30% off the asking price, for example, but be ready for the seller to turn you away.

"In Bucerias, 8 miles north of downtown PV, you can buy oceanside for US$70,000 to US$100,000. Larger condos in this area go for US$200,000. One 10,000-square-foot, six-bedroom property here is on the market for US$1.5 million. That works out to about US$150 per square meter (about US$1,600 per square foot). That's a good price...

  • "It's not like the old days, when, if you had an accident, you might be taken to a little hut on the beach under a palapa where they'd give you a shot of tequila and then stitch you up," joked Pamela Thompson, owner of HealthCare Resources Puerto Vallarta.

"Our facilities today are state-of-the-art," she continued for attendees at our Live and Invest in Puerto Vallarta Conference.

The Banderas Bay area of Puerto Vallarta today boasts 6 private hospitals, 500 registered physicians, and 50 registered dentists. Plus many more qualified, highly trained, but unregistered practitioners.

All this 21st-century health care infrastructure is complemented by a strong tradition of natural healing. Curanderos, as they are called, are Mexico's original healers and still outnumber allopathic physicians.

The region's growing medical tourism industry is tapping into these extensive resources, attracting people looking for dental care, plastic surgery, weight loss surgery, and diagnostics, in addition to things like hernia repair, cataract surgery, knee and hip replacements...

"It used to be that people came for cosmetic surgery," Pamela explained to the group. "Now so many North Americans are realizing that they can come and have their gall bladder or hip surgery taken care of here, as well. Even factoring in the cost of the airfare, the hotel, and other travel expenses, these procedures cost much less here than you'd pay in the United States...

  • "How long will the drive take from Tulum down to Belize City?" I asked our friend Phil, who'd volunteered to give Lief and me a lift down the coast.

"Hard to say," Phil replied. "It all depends on the border crossing. It can take 10 minutes to get across...or it can take two hours..."

Crossing a border by land in this part of the world can be an adventure. What questions will they ask? Will they want to search your vehicle? Your bags? Take you aside for a private conversation during which someone might be looking for a little something on the side?...

Also This Week...from Resident Global Real Estate Investing Expert Lief Simon:

It is not possible for a foreigner to finance the purchase of a piece of real estate in most of Latin America. Local banks either don't lend to foreigners at all or the terms are simply too unattractive to make sense compared with what you might be used to. In most markets, your only option as a foreign buyer is to pay cash...or to find a seller willing to finance himself.

This was the case in Mexico for a long time, for both foreign and local buyers, as evidenced by the fact that 95% of residences in Mexico are owned free and clear, with no mortgages held. However, today, that statistic is changing, as more banks are willing to lend.

Foreigners looking to buy in Mexico were first served by U.S. banks setting up operations in Mexico specifically targeting the North American (that is, north of the Rio Grande) market. These banks offered reasonable terms, similar to what you could get farther north. Over the years, these American lenders have exited the market for various reasons. Some were bought out by bigger entities; others pulled out because they had limited cash following the economic downturn. Mexican lenders are stepping up to fill the market void.

The good news, as a result, is that, as a foreign buyer in this country, it is possible to borrow locally for the purchase of a second home, a full-time residence, or an investment rental. Loans are in U.S. dollars, which works out well, as most real estate in the expat and tourist areas is priced in dollars. (Note, though, that, if you're living in Mexico and have local income, you can get a peso loan. The interest rate will be higher.)

Other terms are similar to what you'd be used to, with up to a 30-year amortization possible and both fixed- and adjustable-rate loans offered(most countries don't offer fixed-rate mortgages for longer than five years). The bad news is that the maximum loan-to-value you can get is 65%, and current interest rates are hovering around 8%.

Still, being able to finance in another country at all is a big plus.

You'll need to show the Mexican bank proof of income and a credit report, just as you would in the United States or Canada. The minimum credit rating most banks require is 680.

Seller financing is becoming more common in Mexico, as well. The terms won't be as good as for a bank mortgage, but you'll have less paperwork. Seller financing can be a good option if you're looking to finance for a short period until you sell something up north or if you don't think you'd qualify for bank financing.

The bottom line is that the foreign buyer does have options in Mexico for in-country financing, which is one more feather in this country's cap as a top destination for U.S. and Canadian retirees.

For more details on financing in Mexico, you can contact MexLend.

Representatives spoke at our Live and Invest in Puerto Vallarta Conference last week, and, as they explained, MexLend works with a broad base of lenders.


Another is that, if the movie is to be believed, a whole world exists in Panama City that Lief and I know nothing about. Could a world-class counterfeiting and smuggling ring be operating out of Chorillo? I guess so. I grew up in Baltimore, Maryland, which, indeed, is home to an underground drug world (have you seen the TV series "The Wire"?). Living there for my first 35 years, reading the local papers each day, I knew this other reality existed. I'm happy to be able to say, though, that I never came face-to-face with it. Never saw a drug land shoot-out, never witnessed a buy or a bust.

I was entertained watching the drug dealers, counterfeiters, armed robbers, and all-around bad guys in "Contraband's" depiction of Chorillo and the docks at Miraflores and, mostly, struck by how sedate our lives here in Panama City are by comparison. You might even say dull. Certainly they're ordinary.

If you're considering or preparing for a new life in Panama but haven't yet spent an extended time in Panama City, you might be wondering. The greasy guy with the wolf and giant albino boa in cages in his warehouse? Is he typical? The shoot-out between the robbers and the Panama City police on the that common?

Not in my experience.

My experience of Panama City is more to do with dragging 12-year-old Jackson on weekly visits to the Riba-Smith grocery store so he can help me carry and load...trying to keep my garden alive three months into the dry season...remembering parent-teacher meetings at Jack's school...taking Jack and his friends for Pizza Hut lunches and, now that it's opened in Albrook Mall, Gap shopping sprees...

Sometimes things get more interesting. A few weeks ago, Jackson was invited to spend a weekend on the San Blas islands with a friend's family. They camped out, slept in tents, cooked over an open fire, swam and snorkeled in the beautiful waters off this quintessentially Caribbean archipelago.

A week later, the same friend's family invited Jackson to travel the Panama Canal with them on another friend's sailboat. The group sailed, overnight, from Colon back to the Amador Causeway in Panama City, navigating the three locks along the way. Jack's report on this once-in-a-lifetime experience (for which he was allowed to miss two days of school): "It was awesome!"

And, a couple of weekends ago, we took Jack, his friend Valerian, and two friends of ours to Santa Fe, one of our favorite mountain towns in this country (because it's still almost completely undiscovered and undisturbed), to visit the riverfront property we own there. Jack and Valerian swam in the river while we adults dangled our naked feet over the edge of a big rock on the river's bank. The cold water flowing over our toes helped to mitigate the effects of the bright midday sun overhead...

Jack's school bus collects him at 6:45 each morning. Lief and I depart for the office about 7:30. We all return home, from work and after-school activities, by 6:30. Family dinner is at 7 p.m. Followed by homework. Some Friday nights we go to Happy Hour (my favorite spots are in Casco Viejo). Saturdays are errands, chores, visits from friends. Sundays we bar-b-que on the back patio.

That wouldn't be your life, of course. But it's ours.

My point is that life in Panama City, like life any place, can be what you make it. We could seek out the drug dealers and other unsavories in Chorillo, if we wanted, and connect our lives to theirs...just as I could have sought out the drug dealers and other knuckleheads in West Baltimore years ago.

But I have all I can handle getting Jack to school on time each day and keeping my business in business.

I do, though, appreciate Mark Wahlberg and company showing me a more exciting side of life in my adopted home town.

Kathleen PeddicordContinuing Reading:


Gary, Lief's project manager for Los Islotes, had left the office early to drive out to the west coast of the Azuero Peninsula, where Los Islotes sits, to meet with an inspector from ANAM, Panama's environmental agency. The inspector was coming out for a regularly scheduled site visit. The guy, though, called Gary, just after Gary had pulled away from the office, to say that the trip was off. Would have to be rescheduled. Because of the Indians.

Members of Panama's Ngobe-Bugle indigenous tribe, protesting mining and hydro-electric dams on their land, have been registering their opposition to these projects by blockading roads around the country. No way to get from Panama City to Azuero the morning Gary and the inspector intended to make that trip. No way, in fact, to get many places in the country that day...or for some days to follow. Gary and the inspector would have to make their site visit another time.

Gary turned around and came back to the office. Which ultimately proved a good thing, as he was around later, to help with the Alberto thing. But I'm getting a little ahead of my story.

Alberto had been busy all morning. He and Marion had two urgent agenda items that day.

First, we had some furniture that needed to be put into storage. This wasn't so much urgent as scheduled. We had movers showing up. Someone needed to show them what to move where.

The second agenda, though, did qualify as critical. Thanks to a paperwork snafu, Lief, Kaitlin, and Jackson's residency visas were about to expire. (For some reason, my application was made separately and was all in order...while the rest of my family was at risk of becoming illegal aliens. Why? Who knows. We've learned not to ask those kinds of questions...)

Marion was meeting the movers to manage the transport of the furniture to the rented storage unit. Marion orchestrating the move, Alberto would be free to run around the city getting together the documentation that we needed to be able to file the visa extensions. The deadline for this was 24 hours away. If we didn't get the right papers filed with the right authorities inside that window, Lief, Kaitlin, and Jackson might have to begin their visa processes all over again. From the start. Dios mio.

So Alberto dropped Marion off with the movers and then set off on his paper chase. When he'd finished collecting the paperwork, he was to collect Marion from the storage depot and then go with her to make the required filings on our behalf. The clock was ticking.

Meantime, back in the office, Lief and I were trying to get a little work done. Until Elodia called upstairs to us in a panic.

"What's the trouble?" I asked Lief when he came back up to my office after speaking with Elodia.

"Alberto hit a guy. I mean, he hit a guy's van. With his car. Well, our car. The guy cut Alberto off, trying to pass him, and Alberto smashed into him. They're waiting for the police to show up."

In Panama, it's illegal for anyone in a vehicle to leave the scene of an accident involving that vehicle until after the police have arrived on the scene and taken statements. Not any policeman will do. It must be one of the special traffic policemen authorized for this duty. In the end, that day, Alberto waited four hours for the right policeman to show up (three other types of cops stopped by sooner, but their visits didn't count).

Gary volunteered to go help Alberto. He took his digital camera and said he'd be back with photos.

Marion called. The movers had finished. Where was Alberto? He was with our bashed-up Prado. Marion should hail a cab.

By the time this message was relayed, it was too late for Marion to make it over to the scene of Alberto's accident, get the required documents from him, and then go back across town to the Department of Immigration. They'd be closed for the day. That would have to wait for the next morning. When we'd be within 12 hours of the pending deadline.

The Prado out of commission, Lief and I would be hailing a cab, too, I guess, to get home that night...

No, no...not so fast. We'd use our friend's car, parked, at the time, on the street in front of our office.

The friend, on an extended stay out of the country, left his car with us for safe-keeping. We'd been wondering where we'd store it. Didn't want to leave it on the street indefinitely. Not that we'd worry so much about it being stolen. But a car parked on the side of the road in this town is fair game. You never know who might swerve, slide, or smash into it. Panama's capital is increasingly a great big bumper-car arena. Too many vehicles. Too much construction. Nowhere any shoulder.

Where could we park our friend's car so it'd be under cover and safe from the free-for-all that Panama City's calles have become?

Now, an answer to that question had presented itself. The Prado would be away for repairs, probably for some time...leaving an open spot in our covered driveway.

Problem solved.

Kathleen Peddicord

P.S. We made the filing deadline with the Department of Immigration...with three hours to spare. Lief, Kaitlin, and Jackson remain legal aliens.

P.S. What else this week?

  • As I've been reminding you over the past month or so, an important part of our editorial agenda this year is making comparisons, drawing out the advantages and the downsides of the world's top retirement havens for 2012.

Today, in that spirit, let's consider Pacific coastal options...

If this is the retirement lifestyle you're in the market for, your search will lead you to choices in Costa Rica, Nicaragua, Panama, Ecuador, and Mexico...

  • "Early in the morning," writes Mexico Correspondent Lauren Stanley, "joggers and dog-walkers are the only ones on the malecón, the seaside boardwalk separating the white-sand beach from the cobblestoned street with its row of shops. Often there is a slight haze in the air, softening the Pacific's blue and blurring the sharp edges of the high-rises seen in the distance, across the bay.

"At this hour here in the Romantic Zone, the only sounds are the waves as they curl onshore and the occasional whoosh of a passing vehicle. The row of whimsical bronze sculptures along the malecón--among them a boy riding a seahorse, a couple in love, and (my favorite) pillow-headed figures climbing a ladder to the sky--are their only company. This is not an early-rising city, and the shops and restaurants are still closed. Their enticing displays--gem-studded jewelry, gaily colored ceramics, chic beachwear, and more--will be available later, as the city wakes up.

"On the quiet side streets, that climb steeply toward the hills, people leave homes and apartment buildings to do their daily shopping just as they would anyplace...just as though they weren't lucky enough to live in one of the most romantic cities in the world.

"For that curving white-sand beach nearby fringes one of the world's largest and most beautiful bays--the Bay of Banderas. And the city that hugs its shores is the legendary resort of Puerto Vallarta, Mexico..."

  • Leaving the Puerto Vallarta airport our most recent visit to this part of the world, we knew right away that we were back in North America. Alongside the highway, we saw Wal-Mart, Home Depot, a mega-grocery store, Domino's Pizza...

"Can we go to Wal-Mart?!" asked young Jackson enthusiastically from the back seat.

Jack's experience of places like Wal-Mart to this point in his life has been limited to our annual Christmas visits to Baltimore, where my family lives. To him, Wal-Mart is a special treat, along with Toys "R" Us and Best Buy. The truth is, places like these are a special treat for me, too.

We've been living for more than 14 years in parts of the world that don't have big-footprint shopping. I feel a little ashamed to admit it, but I miss it.

Because places like Wal-Mart make life easier. It's easy to shop in a Wal-Mart (because there's so much choice, all under one roof), and it's easy to buy there (because the prices are so low).

Many things about being an expat aren't easy. We embrace the challenges, savor our way of life, and encourage our kids to do the same. But, now and then, I admit it: I enjoy an hour or two in a Wal-Mart as much as the next mom.

In this Puerto Vallarta region of Mexico, though, the expat life can be easier than it is elsewhere, and not only because there are three Wal-Marts here...

  • "Puerto Vallarta," writes Mexico Correspondent Lauren Stanley, "is located on Mexico's central Pacific coast, in the state of Jalisco. It's about a five-hour drive west of Guadalajara, Mexico's second-largest city and the Jalisco state capital.

"The city lies between the blue sea and velvet-green mountains that tumble down almost to the shore, and this setting is one of the first things you notice. As you walk along Vallarta's seafront, look down the cobbled side streets that debouche into the malecón.

"You'll see that these streets rise steeply to hills...sometimes within just a few blocks of the shore. These hills are dotted with homes and condominium buildings that offer sweeping views of the bay.

"The hills are part of the Sierra Madre Occidental mountain range that runs from the state of Nayarit, north of Jalisco, to south of Puerto Vallarta. Thanks to this geography, the city is long and narrow, hugging the shore.

"Over the years it's gradually expanded both north and south to its current size--20 miles or more for the core city and outlying areas, and with a population of nearly 256,000 in the 2010 census.

"Puerto Vallarta is a snowbird's delight. The region has a hot, sunny climate. Winters are dry and sunny, with temperatures into the 80s Fahrenheit. Summer temperatures can reach into the 90s, and this time of year is more humid. This is also the rainy season (June to September). Fortunately, there are usually sea breezes, and evening temperatures generally drop to the 70s even when the day has been hot.

"Until the 1950s, Puerto Vallarta was a small fishing village along a spectacular bay on the Pacific, modestly popular among Mexicans as a beach resort. Then, in 1963, John Huston filmed The Night of the Iguana in Mismaloya, a seaside village just south of Puerto Vallarta. The film's star, Richard Burton, was involved with actress Elizabeth Taylor at the time. She followed him on location...and the paparazzi followed her.

"Suddenly Puerto Vallarta was all over the news--and on the map, as far as Americans were concerned--and it's remained there ever since..."

Also This Week...from Resident Global Real Estate Investing Expert Lief Simon:

Kathleen has been writing to you this week about Puerto Vallarta, making the point that this is one Pacific coast destination where it's not silly to make a comparison to the southern coast of California. In fact, the two regions are very similar. The big difference is the cost. Puerto Vallarta serves up the same Pacific Ocean surf, the same white sand, and, very important, a comparable level of infrastructure, amenities, and services as you find in towns along the coast of southern California, but at a steep, steep discount.

That's all speaking generally. What about real estate values, specifically?

Puerto Vallarta can be inexpensive compared with many coastal spots in the States and even compared with some other South of the Border coastal retirement options. At the same time, it's a proven rentals market.

In the Puerto Vallarta region, including Nuevo Vallarta, you can find real estate for sale for as little as US$60,000 (for a condo) or for as much as many millions of dollars (for villa compounds right on the coast). In other words, whatever your budget, even if it's relatively modest, you can find something. This is one reason we like this region as much as we do.

As in any coastal area, prices go up exponentially the closer you get to the water. Older is less expensive. Newer and in a gated community with amenities costs more.

If you're considering the market as a prospective investor, again, you have lots of choice. Pay as much attention to location as to price. If you're shopping for a rental investment, buying cheap doesn't guarantee a good yield.

Using the US$60,000 condo as an example, the price looks great and breaks down to about US$850 a square meter...low by most any standard (don't mention this to the guy from Tucson who keeps writing to me to try to persuade me that Tucson is the world's cheapest place to buy real estate right now). But the location isn't going to attract vacation renters in this market with thousands of available units. If you're buying for investment, you have to balance price with rental potential.

On the flip side, the price of a US$635,000 one-bedroom condo on the water in a marina community may compare well with parts of southern California, but don't expect a great yield on that either. Even if you could rent it out every day during the high season (mid-November through April), the rent isn't likely to be high enough to help you break the 5% net threshold (my minimum expectation for a reasonable rental yield). This is the kind of property you buy for yourself with the thought that you'll rent it out when you're not using it to help offset some of the carrying costs.

Between those two extremes lies lots of opportunity in the Puerto Vallarta area...from reasonably priced condos in town that appeal to those who want to walk to the shops and restaurants to higher-priced (but not over-priced) condos on the water in the newer resort areas for those looking to be near the beach.

With such variety in a market, you have to get your boots on the ground to find the buy and the area that works for you. Fortunately, the Vallarta area has an MLS system (as I remind you regularly, this is a rare thing outside the United States), which can help you get your bearings without having to drive around and around for days or weeks trying to focus your search.

The important bottom-line point is that the Vallarta region offers properties at price points to work for any budget. We'll show you firsthand when we convene in this town for our Live and Invest in Puerto Vallarta Conference taking place May 30-June 1.

I hope to meet you there.

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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.


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