Long-term Yields You Can Count On

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Jan. 5, 2009

Paris, France

PLUS:

  • Global Real Estate Is No Longer The Golden Child…But Don’t Count It Out Entirely…
  • This Is The Time To Shop For Yields…
  • And Here’s How To Yield 15.87% Per Year Over The Next 20 Years
  • Cheap And Not Communistic…
  • Felize Ano Nuevo From Sunny, Warm, Tranquil Granada…

AND:

  • The Clock Is Ticking On Platinum Program Panama Circle Invitation…

Dear Overseas Opportunity Letter Reader,

“Given the financial roller coaster of the last several months,” writes resident global real estate investing expert Lief Simon, “it’s hard to make sense of what to do with your investment capital. Certainly, international real estate is not the golden child it was even 18 months ago. Many property markets have taken hard tumbles, especially at the high end. Top-end Dublin real estate, for example, is down 45% to 50%.

“Don’t let this kind of news scare you away from global property investing altogether. It’s not as easy as it was a few years ago to buy for upside, but it still makes sense to have some of your investment portfolio in real estate outside your home country.

“You aren’t going to find the broad no-brainer opportunities that we were stumbling over during the boom. The chances to buy smart are fewer, and, to find them, you need to return to the fundamentals.

“For example, right now, you want to be shopping for yields.

“Typically, in the context of real estate, ‘yields’ means rental yields. Indeed, this is a good option in the current climate. I’m seeing solid and reliable returns from rental investments in Panama, Argentina, and Paris right now.

“But there’s another opportunity for long-term yields that you should be paying attention to: productive land. That is, land that you can lease out or on which you can grow cash crops or raise animals yourself.

“One of the best-producing land plays over time is also one of the easiest crops to grow and manage: trees. Timber is a commodity that will always have a market and that (very important) doesn’t have to be harvested at a particular time. That means that, if prices for your wood are less than you want or expected, you can leave your trees in the ground and let them continue to grow until prices reach a level you like.

“A drawback of investing in trees is the limited cash flow. Unlike cattle that mature in less than a year and then can be taken to market, you have to wait 10 to 25 years for trees to mature before you see any real return. (Teak can take 20 to 25 years to mature; pine 15 to 20 years; eucalyptus maybe 13 years.)

“Still, the annualized returns and the reduced volatility you enjoy from an investment in trees (and the land they grow on) can be a smart part of an overall portfolio diversification strategy. Historically, timber produces a 12% to 15% annualized return.  This is better than the average long-term stock market return…and certainly better than the 40%+ stock losses we all suffered in 2008!

“And, again, timber investing comes less risk overall.

“Fire is one key risk. Teak trees, however, are effectively immune from forest fires after about three years of growth. Pine and eucalyptus aren’t as lucky in this regard, but proper management should help minimize the fire factor.

“Insects are another risk. As with fire, teak is fairly immune after three years, and pine and eucalyptus grow in climates where there are fewer devastating insects to worry about.

“Again, market risk is mitigated by your ability to leave the trees in the ground and growing until you deem the time is right to sell.

“And, at the end of the day, after the harvest, you still own the land the trees were growing on. You can plant again.

“Of course, starting your own tree farm is no easy thing and probably not something most of us are up for. Much easier to partner with someone who has the experience and the infrastructure to manage the plantation for you.

“I’ve highlighted teak opportunities in Panama for you in the past, and these continue to make sense.

“Today, I want to introduce you to a new opportunity in Argentina. It comes from a colleague I’ve worked with for almost 10 years.

“Steve Rosburg, through his company Ushay, has launched a new timber project after having successfully funded and followed through on two previous such undertakings. For this new venture, Steve has secured 1,438 acres in the Province of Corrientes that will be planted with eucalyptus (32%) and pine (68%). The eucalyptus will be harvested and sent to nearby paper mills. The pine will be harvested for lumber and manufacturing.

“Diversifying between two species reduces the overall risk of the project. Eucalyptus has a shorter growth cycle than pine…13 to 15 years, compared with 20 years. Eucalyptus also re-grows from the same stump, eliminating the need to clear the land and replant. Three harvests can generally be taken from a eucalyptus tree before you have to pull the stump and replant.

“With eucalyptus in the mix, Steve’s plantation should yield a generous cash flow starting in 13 years (remember, this is long-term investing) and continuing through 20 years, when the pine is harvested.

“This is the kind of investment that works nicely as part of a retirement portfolio…or perhaps as a gift for a young child or grandchild. You’re setting up a yield today that could pay for college tuition, say 15 years from now.

“Steve’s projected annualized ROI for this project is 15.87% over its 20-year lifetime.

“Minimum buy is but US$50,000.

“Steve has already sold more than 30% of the available investment units in three weeks to his private client list. He has agreed to allow us to invite Live and Invest Overseas readers to participate. And my advice is to act now. This is one of the easiest and most accessible wholesale real estate investment opportunities you’re going to find, and it won’t last long.

“If you’re wondering what to do with your long-term investment cash after the roller coaster year we’ve had in the stock market, this kind of back-to-basics, yield-producing play is the answer. Get in touch here.”

Kathleen Peddicord

 

TODAY:

“What a celebration on the eve of the New Year here in Granada,” writes friend and expat Jay Snyder from his adopted part-time home in Nicaragua.

“Standing on the upper deck of our condos, we were treated to an unbelievable explosion of fireworks in every neighborhood in the city. Three-hundred-and-sixty-degree surround-sound and light show.

“We did our share to contribute to the festivities. The neighbors were all out in the streets, in their rockers. We passed out champagne and cookies, as well as lots of hugs and well-wishes for a Felize Ano Nuevo. It was a special time.

“There is a huge disparity of wealth in this country, as you know. Much more so than in the United States. Ortega has a great opportunity to do something about it. We’ll see. I’m not holding my breath.

“A big wind farm has just been completed in Rivas that will provide 6% of the country’s power needs. Plans are for two more, and, ultimately, by 2020, the hope is that only 8% of the country’s energy needs will be provided for with fossil fuel. News media is suggesting that Nicaragua could become a model for all Central America with its
aggressive energy plan and policy.

“That’s all for now from sunny, warm, tranquil Granada…”

***

We alerted you over the weekend to our New Year’s 2009 gift to you: An opportunity to take advantage of our most important invitation of 2008, membership in our new Panama Circle, for only one-third the cost right now.

This is the answer to how to make your live, retire, and invest in Panama dreams come true in 2009. We’ll even give you US$3,000 to help launch your new life in the world’s top retirement, investment, tax, and offshore haven.

However, to be frank, because the cost to us of fulfilling this service is great…and because we can provide the benefits and the level of support we’re guaranteeing only so long as membership is kept strictly limited, we’ve got no choice but to attach a deadline to this special New Year’s invitation.

The clock is now ticking. You have until Jan. 15, 2009, to become a member of the Panama Circle and pay only one-third the membership fee now.

After Jan. 15 this Platinum Payment Program invitation is off the table.

Meantime, the US$3,000 is only the start of what we’re prepared to do to help you realize your Panama dreams. Full details here.

MAILBAG:

“Can you suggest an inexpensive place like Ecuador to live that is not a communist country? I don’t think I would feel right or safe in a country that is communist.”

— Ria G., United States

Ecuador isn’t a communist country, dear reader. Ecuador is a republic with a democratically elected president.

That is not to say the course of democracy runs smooth here. Protests, oustings, dismissals, incompetency and corruption challenges, re-appointments, and mysterious deaths have resulted in eight presidents for this country in the past decade.

In other words, presidents come and go in Ecuador…but they’re not communists…and the Ecuadorians don’t seem much bothered by their passage. The current president, Rafael Correa, is a young (granted, far left-leaning) economist educated in the United States.

That said, Ecuador remains the world’s most affordable place to retire right now (more on this later in the week). Other super-cheap options as we head into 2009 include Uruguay and Thailand.

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Live And Invest Overseas

Live and Invest Overseas is the world's savviest source for top opportunities to live better, retire in style, invest for profit, do business, and own real estate overseas. Established in 2008, the Live and Invest Overseas' editors and correspondents have more experience researching and reporting on top opportunities for living well, investing for profit, doing business, and owning real estate around the world than anyone else you'll find.