Quote:
Originally Posted by pornprotege
i want to diversify my investments and i never touched real estate before. some fine folks have told me to look into some market in panama, costa rica and some other place in asia where it's booming and you get a decent ROI over 1-2 years oh just holding the property and reselling it.
im not too versed into real estate, and was wondering if anyone here have first hand experience with this... especially with financing. how do you go and finance 50-60% of a property in a foreign country (panama, costa rica, etc). I know some GFYers are doing just that in those market, that's why i thought i could ask here
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Can only talk about Costa Rica and an element of Panama pornprotege.. and will try to answer best I can.
Both Panama and Costa Rica have had some of the highest rises in real estate in the world over the last..... roughly six years. The market remains *very* strong, but the entry level is now far higher than it was. There are no indications that this will change in..... who knows, but gutty feeling, for around 10 years ahead.
Can quote the latest CR govt figures on real estate appreciation - this depends on region, but generally for foreign investment areas, the capital appreciation last year was between 40-60%. (Tho, not sure exactly how they calculated these, - it could depend on the purchase price and there will be extremes on that). Own personal experience is reflected in a 50% rise in our investments over the last year - so suppose the govt stats are much in line with this level.
Don't want to predict much, but again, gutty feeling based on a knowledge of the market and the plans (and existing projects currently progressing), that this level will not change much for a fair while ahead. Each year over the last few years, there has been in increase in construction of around 78% and it's likely to be around the same for this year.
On factor to consider in both Panama and Costa Rica is.... depending on what currency will be used to inject funds into your investment, this can have advantages. All real estate in both countries is priced in dollars (or can be priced in dollar if not already). This means if you are paying in Euros or BGP, there is a benefit on currency exchange. Simple example... a property or land worth, eg $300K is actually only costing 150 GBP and what you get for that is far more than would be possible in the UK or Europe.
It has been fairly customary to have US and Canadian folks investing here - US particularly because of geo convenience and this is still continuing surprisingly. We had a meeting in Denver about 10 days ago and expected a "subdued" turnout - but it was actually massively overbooked by US folks still having an interest, which is maybe odd, considering the real estate scenario in the US. At the same time, there is more interest from Canada and now a considerable interest from the EU, which, I suspect will be another "mass injection" of people - partly because of the exchange rate and the main other reason is direct air flights from these countries. Last week we had the first of another flight direct from London Heathrow to here.
One of the main problems at the moment is locating suitable property - this is definitely getting harder to do and have two people working on it almost full time now. (Have not even bothered doing construction for a few years - but concentrating on buying as much viable land as possible - construction can come later). Despite that, it is still possible to purchase whatever and this can have a more than reasonable ROI.
Not sure of your location pornprotege, but it's important you know the regions and study them well. Generally... least for Costa Rica, any property on the Pacific Coast is good property. You can test out the net for this, but ignore the asking net prices - they are usually higher and better deals can be done locally.
On financing property here, not a good idea. It is far better to get financing from, prob your home country, since local "mortgages" are silly and at a rate of around 29% +/annum. (This scenario was a leftover from the past when the local currency was tied to US $, and, tho that has changed, - there is no hurry to reduce the rates, but it's only a matter of time.)
If you eventually find a property and need finance, one of my associate directors has plenty sources (tho no idea of the detail on this - would need to check with him) for either home or plot purchase and using in the region of 160 banks globally to facilitate these - so chances are, wherever you are located, there is a possibility he may be of help.
If you need legal representation in Cost Rica, and strongly advise this - no problemo. Can recommend a few trustworthy lawyers with experience in this field.
Better say what the background is here... we buy land in bulk and that knocks the cost/acre down considerably. We then go thru the legals and surveys (these are often severely out of date) and then plot the property, a lump we retain in our own corps, but then sell to whoever with the benefit of reduced cost on the bulk purchase. Along with most properties we also supply a non-trading corporation which is used to hold the asset and the buyer is given all shares and total control of this. (This also saves future land transfer taxes if an investor wants to sell his asset - he just passes over the corp to the new buyer - tho not one investor has sold yet - for obvious reasons
) From an investor angle, this pretty much makes sure they get max potential on appreciation and this has been around 50+% plus each year.
Unfortunately all we have on offer at the moment is a backlog of folks waiting for an opportunity and something to invest in - but eventually we will when we can find more land to buy, but if you have any questions or need a clue where to look, or need a legal representative here, no problemo
