3 Favorite Overseas Property Investments Right Now
I just got home from spending time in Panama for our annual Global Property Summit, where our contacts from around the world brought to the stage the best real estate offers from their respective countries.
We saw a wide array of good investments.
I know everyone has his own favorites, based on his own needs and objectives. But I thought I’d pass along my own top picks from the meeting rooms in Panama City… the property deals that appealed to me the most.
Brazil Is Staging A Comeback, With Beach Lots Under US$50K
This year’s Global Property Summit featured a number of Brazilian offers that were all popular with attendees. Many were drawn to lots presented for the conference price of only US$9,900… and also to the Brazil beach condos, priced for attendees at just US$79,000.
But my favorite Brazilian buy right now are the lots presented that are actual, true beachfront… frontline properties. These lots are not only right on the beach, but they are also huge by local standards, running between a half-acre to one acre in size (2,000 to 4,000 square meters). A lot of just over one-tenth acre is more normal in Brazil (500 meters), with many even smaller.
Today, there’s much less project risk than when this development was first introduced last year. Now, the property has been officially subdivided, and all of the lots are individually titled… electricity is on-site and has been run to 30% of the lots… and the access roads have been completed.
Yet after all this progress, the prices have remained much the same. They’re currently listed at US$59,000… and you’ll get a US$10,000 discount if you’re paying in cash instead of in installments (10% down, with 30 monthly payments at 0% interest).
At US$49,000, this deal is hard to beat.
I like the offer because it capitalizes on the current strength of the dollar against the Brazilian real… and an exchange rate that’s rolled prices back to 2002 levels.
Also, I like the high intrinsic value of the lots relative to the purchase price. If the rest of the project were to disappear—the hotel, restaurants, etc.—you’d still have a very valuable piece of land.
There are just a few lots remaining. To find out more, get in touch here.
Agricultural Deals Continue To Be A Top Investment Choice With An ROI Over 16%
My next pick from the Global Property Summit is the current organic fruit opportunity in Panama.
To be honest, I find many of the agricultural offerings out there to be uninteresting, with so-so returns. But in this case, the product being grown is in high demand. It’s a premium-priced organic fruit, which changes the picture entirely.
The traditional problem has been how to invest in this industry to get a good return for an affordable entry point.
This developer has created an innovative investment package whereby the investor buys 1 hectare (2.47 acres) of organic farmland. The developer then plants the trees, raises them to maturity, and gets the fruit to market. In return for this fully turnkey investment, you split the profits, with 70% going to you and 30% to the developer.
Over the past couple of years, this group has offered a number of these agro-deals, and they’ve all sold out quickly. You may recall seeing offers for organic mangoes, guavas, and limes in the past.
The latest offer on the table is for organic avocados, referred to as “America’s new favorite fruit” by The Washington Post.
The trees live for 60 to 80 years, so your investment will provide returns for a long time. Each hectare produces between 20,000 and 30,000 pounds of avocados each year… but there’s little chance of oversupply; the United States consumes more than 1.4 billion pounds of guacamole annually, along with 900,000 pounds of fresh Hass avocados.
The cost of 1 hectare of avocado trees is US$45,000.
You’ll make no return for the first two years. In year three, you’ll make a modest return, but this is from sale of the intercrops, not from the sale of avocados. (Intercrops are rotated crops which are planted between the rows of avocado trees to replenish the nutrients in the soil and repel pests. In addition, their harvests provide additional cash flow and yield.)
In year four, you get a partial yield that will net you 12.7%. In year five, your return is forecast to be 22.8%… and it goes up from there.
The returns can go as high as 44% in some years, but the overall average over 30 years, after all costs, is projected to be 16.2%. Although, given that the trees live to be 60 to 80 years old, your return could be higher over the long haul.
I like this offer because of its reasonable point of entry and also because it is an “uncorrelated investment”… meaning its performance is not tied to stocks, bonds, or financial markets.
I also like the fact that your hectare of land is individually titled to you, so you have a hard, underlying asset rather than just a paper investment.
I’ve been out to the plantation, and I can assure you that these guys mean business. They’re serious, experienced farm operators who have seen success in several different countries.
To learn more about the Panama avocado investment, get in touch here.
Earn 10% ROI From A Short-Term Rental Unit In Santo Domingo, Dominican Republic
I like this offer because it is a straight-up, no-nonsense investment from a group that specializes in high-return real estate investments around the world.
The opportunity presented at the recent Global Property Summit is located in the Dominican Republic capital of Santo Domingo.
In the Dominican Republic, most real estate investment opportunities are focused on resorts, beaches, lifestyle, and golf. This project focuses on none of those things. Its purpose is to provide a fully managed, luxury apart-hotel to the business community in a high-demand area of downtown Santo Domingo.
I’ve spoken with folks who live in Santo Domingo, and they tell me that the location of the project is perfect for this purpose. This is not a resort property, but it’s only 30 minutes to scenic golf courses and 40 minutes to the beach… something your renters will appreciate on the weekends.
The developers chose the DR because it’s the Caribbean’s strongest economy, with good yields and favorable landlord laws. The country also provides generous tax incentives and currently suffers from a shortage of quality rental accommodation.
As a side benefit, the DR offers the world’s best and shortest path to a second passport.
This is not the first project in the neighborhood for this developer. Their first project is located nearby. In that case, they sold 95% of the units in just five weeks to their existing investor base. Construction is nearing completion at this time.
To invest in the new offer, you buy the apartment for US$96,000 and then invest an additional US$10,000 to cover taxes and furnishings. In return, you receive full ownership title.
The projected rate of return is 8.6% to 11.5%; the expected average return is 10%. These are net figures, after property management costs and HOA fees.
In addition, the expected appreciation on the apartments is 5% per year.
Again, I like this opportunity because it’s a straight-up investment, undiluted by the idea of beach vacations or golf trips. In my experience, these are the kinds of investments that will usually make you a better return.
I’m sure that I don’t speak for everyone with my “top three picks” from last month’s Global Property Summit. Every investor at the event had a different story, different objectives, and different circumstances.
That was part of what made the conference the success it was. Having a broad selection of opportunities to consider, as we did, and the ability to exchange ideas with fellow investors of differing perspectives and experiences is what an event like this is all about.
Lee Harrison
Editor, Overseas Property Alert
