October 23, 2009
Panama City, Panama
PLUS:
- What Is The Cost Of International Health Insurance In Antigua, Guatemala?...
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The Smart and Experienced Money Is Moving Into International Real Estate...
But how do you begin? Where do you start?
Last week Lief Simon and 15 other international real estate investing professionals discussed how and where to position yourself in world property markets for profit.
Those in the room with us at the
Global Real Estate Profits Summit in Panama City last week sure had a great time considering those opportunities in turn. If you weren't able to join us, we missed you.
Here's your chance, though, to gain access to every one of the recommendations presented. This is time-sensitive material. Some of the opportunities, discounts, and offers discussed are available for a limited time only.
Reserve your Global Real Estate Home Profits Program now.
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Dear
Overseas Opportunity Letter Reader,
At Lief Simon's
Third Annual Global Real Estate Profits Summit last week, attendees spent two-and-a-half whirlwind days considering the top property investing opportunities worldwide.
But...invest in a piece of real estate in another country? Yikes. How do you get started?
Here's your guide to how to buy real estate in a foreign country:
First: Understand
why you're buying. For investment or for personal use?
The answer may not be clear-cut. And, in fact, the best case is when you find a piece of real estate in a place where you want to spend time that also holds out the potential for an investment return (in the form of capital appreciation and/or a yield from rental).
State your objectives and exit strategy expectations clearly for yourself and for anyone else buying with you. Every decision you make related to the eventual purchase is affected by the property's intended use.
If you're buying, straight-up, for profit, every decision is based on the numbers. If you're buying for personal use, even part-time, you'll make your choices based on many things, including some that can't be quantified in a spreadsheet.
Now that you understand why you're buying, you need to decide
where you want to buy
what. Here are some stars to steer by:
- Where in the world should you focus? I've been making specific "recession-market" recommendations over the past few months (and will continue to do so). As you consider them (and the rest of the globe), think about:
- The Path of Progress. This is a key factor when buying for investment but important if you're buying a retirement or second home abroad, as well. What infrastructure improvements are planned? A new airport, new train station, new highway, new hospital, etc., can mean a new universe of potential buyers...which is good news if you're buying as an investor looking to develop or to flip. These things, though, also translate to better living.
- Inventory Supply and Demand. In Panama City, right now, for example, a glut of high-rise condos is coming online. These units were launched and sold pre-construction over the past two-plus years. Now they're being delivered...and their volume is one reason Panama's capital market continues to soften.
- Costs of Acquisition. Remember that they go beyond agent commissions. Depending on the market, they can also include: legal fees, notary fees, registration fees, title insurance (we strongly recommend it), and transfer taxes (sometimes called "stamp duty"). In Ireland, for example, stamp duty can be as much as 9% of the purchase price.
- Carrying Costs. Including: maintenance (a house on the beach requires a lot of it, for example); a caretaker (if you won't be in residence full-time yourself); property taxes (not every country charges them, and, in some countries, they're negligible); income taxes (if you'll be earning rental income); capital gains taxes (when you eventually resell...again, not every country charges them); other local taxes; property management expense (you'll need a property manager if you intend to rent); rental management expense (separate from property management and, again, necessary unless you're going to manage all the details of your rental investment yourself...something I don't advise); and homeowner's association/building/condo fees.
- Economic Outlook. Critical if you're buying for investment, but you don't want to ignore the market climate even if you're buying purely for personal use. Markets move up and down...and then up again. At what point in this cycle is the market where you're thinking about buying right now? In which direction is it moving?
- Opportunity for Diversification. In terms of market, type of investment, type of property, and currency.
- What kind of property should you be shopping for?
- How much space do you need? If you intend to rent the place out when you're not using it, understand what rents best on the local market. Apartment or house? One bedroom or two? Think in terms of cost per square meter when making comparisons.
- Where do you want to be? In the heart of downtown...or out in the country? On the coast or overlooking a river? In a gated community, a local neighborhood, or off on your own with undeveloped acres between you and your nearest neighbor? Consider climate, traffic patterns, transportation (where you settle determines whether you'll need to invest in a car, for example), the convenience factor, and nearby amenities (shopping, restaurants, nightlife, parking, etc.).
- Furnished or unfurnished? If you buy unfurnished, where and how will your source furniture?
- What's your budget? Everything follows from this. Be clear on it before you start shopping. Don't forget closing costs, attorney review, other due diligence costs, and title insurance.
Kathleen Peddicord
P.S. Lief Simon and 15 fellow global real estate professionals continued this conversation with specific real estate markets in mind at the
Third Annual Global Real Estate Profits Summit in Panama City last week.
Over those two-and-a-half days, the assembled experts presented more than 17 current real asset investment opportunities in the world's most interesting markets right now. And we got it all on tape. The
Global Real Estate Home Profits Program, with both the audio recordings and the slide shows, is now available for pre-release reservation.
Reserve your copy at a discount of nearly 45% here.
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"I am curious to know if the living expense quotes I see in your newsletters include
health insurance. My wife has ordered your "
Top Health Insurance Options" reports, and we are anxious to see the health costs details.
"We own property in Antigua, Guatemala, so we will not have any mortgage to pay. Your quote of a about US$600/month for living in this city sounds great. Any idea what it would be with a good health plan?"
-- Barry F., United States
As Guatemala Correspondent Michael Paladin
has reported, indeed, you could live well and comfortably in Antigua on as little as US$600 a month, assuming you own your own home and are not paying rent or a mortgage, as you suggest, dear reader.
This budget does not include the cost of health insurance. Michael reports that many expats living in Antigua don't carry it. The cost of medical care is so affordable that many here opt to pay doctor's bills, etc., out of pocket.
However, if the thought of going naked, as it were, makes you nervous, you have a number of options for international health care, all detailed in our "
Top Health Insurance Options For The Retiree Abroad" kit. The cost depends largely on your age. It is possible to arrange coverage for as little as US$100 or US$150 a month if you're younger than 50, have no pre-existing conditions, and are ok with a relatively high deductible.
I speak from experience. Lief and I have high-deductible coverage through BUPA that costs less than US$100 a month apiece. Premium costs increase with age.
