South America

Finding and purchasing your dream home in the top locations of South America…

The continent of South America is also known as the southern subcontinent of the Americas. The entire landmass is located in the Western Hemisphere and mostly south of the equator. However, a few of the locations we recommend lie in the northern hemisphere including most of Colombia, a small portion of Brazil, and parts of Ecuador including Quito which straddles the equator itself.

Most of the continent is located in the tropics and the geography is dominated by the long Andes Mountain range and the Amazon River Basin. With lush jungles, wide rivers, coastal beachfront areas, and even vineyards you can find just about any natural setting you might want to explore.

South America is a perfect destination for many U.S. and Canadian expats since it lies in similar time zones and the northern-most countries are only a few hours away by air. Many major airlines serve the larger cities in South America where you’ll find modern airports and friendly locals.

Weather

The South American locations nearest the equator offer excellent year-round weather, especially those at higher elevations such as Quito, Ecuador and Medellín, Colombia. While in destinations like Santiago, Chile you can enjoy four seasons and snow is common in the highlands.

Language

Most countries in South America speak Spanish, while Brazil’s native language is Portuguese. If you can learn a little Spanish, you can travel around the continent without having to master several languages. You’ll find more English speakers in the larger cities depending on your country of choice, but you’ll need some Spanish in the smaller, more traditional villages.

Lifestyle

You can immerse yourself in the culture of Spanish-inspired, colonial towns that seem to be frozen in time, or marvel at the large, cosmopolitan cities with first-world infrastructure, public transportation, quality roads, drinkable water, and every convenience you are accustomed to “back home.”

If you are looking for an exceptional quality of life, at a reasonable cost of living, the amazing opportunities in South America are not to be missed.

An easy investment that earns 6% to 9.4% in Panama City

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Panama enjoys one of the world’s booming economies, with its role as the Americas’ business hub still rapidly expanding.

I’m writing to you today about an opportunity to make a property investment in Panama City, with an increasing forecast yield of 6% to 9.4%. The developer is also offering a couple of financing options and a discount for cash buyers.

The offer will interest investors seeking a professionally managed income investment, which also brings some personal benefits and perks from Global Hotels and Resorts. The name of the project is Hotel Las Américas Golden Tower.

Background on the Golden Tower project
Global Hotels and Resorts is no newcomer to the hotel construction and operations business, and they have a number of properties already in production. Two that I’m familiar with are the Capilla del Mar—a traditional oceanfront luxury hotel in Cartagena, Colombia—and the Hotel Las Américas Resort, Spa, and Convention Center, a megaplex resort development also in Cartagena.

After staking their claim in Cartagena’s hot market, Global Hotels and Resorts turned their sights to Panama City and the opportunity to take advantage of its economic expansion that continues to gain momentum.

Why Panama?

As the “Hub of the Americas,” Panama remains the region’s business and economic center. And the long-term economic picture in Panama continues to be bright. I don’t need to rehash all the reasons why Panama has been successful to this point…let’s look at the future.

On top of everything Panama had going for it already, the current canal expansion is set to double the Panama Canal’s capacity next year, which will have a significant long-term impact.

Canal profits are expected to increase from about US$800 million to US$2 billion annually. (That averages out to about US$600 profit per citizen.) In practical terms, this means that Panama will have an additional US$1.2 billion to spend each year to enhance their already-strong economy; something they’ve been good at in the past. The GDP is expected to double within eight years of the expanded canal’s opening and triple within 20 years.

So there’s every reason for a hotel developer to expect that the demand for space will continue to gain momentum into the foreseeable future. …

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Four investment options in this expanding market

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US$1=1,904 Colombian pesos

Dear Overseas Property Alert reader,

Capital gains of 10%…rental income of another 6%…and developer co-investment returns of up to 22% annually. These are the numbers that caught my attention for this property in Bogota.

Let me give you the details.

Colombia is the third largest economy in Latin America, after Brazil and Mexico. It’s one of the few countries in the world that sustained positive economic growth during the Great Recession, with a forecast GDP growth of 5% this year—better than the United States, UK, Europe, Mexico, or Brazil. Inflation is at a record-setting low: just 2.19% for 2013.

Significantly, Colombia has a rapidly expanding middle class—probably the most important macro element of any market you’re considering investing in. The number of people in Colombia’s middle class jumped 56.1% between 2002 and 2012, and is forecast to rise another 83% during the next 11 years, through 2025.

So Colombia offers the investor a growing economy with an expanding middle class.

Bogota is the growth engine of Colombia
Bogota alone contributes a huge 24.5% of Colombia’s total GDP, yet still maintained its own GDP growth rate of 4.1%.

International attention continues to focus on Bogota. In fact, the number of multinational corporations in Bogota went from 492 to 1,423 in the 10 years through 2012. That’s a 289% increase.
…

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Multiply your purchasing power with a Self-Directed 401k

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In 2012, I purchased an income property in Medellín. It’s a two-story condo on the 17th and 18th floors of a new building on Medellín’s Golden Mile. Since closing, it’s generated around US$1,900 per month…about 8.5%.

That same year, I invested in a foreign stock exchange, opened accounts in foreign currencies, and even opened a cash savings account that generates 5% interest.

What these transactions all have in common is that I used my retirement funds—money from my old 401k plan, which I converted to a self-directed retirement plan.

By using a self-directed retirement account you can really put your retirement funds to work on the overseas property market, as well as overseas financial markets. You can personally control the funds and invest them as you see fit while preserving your tax-deferred status on the principal and gains.

Originally, I believed that the only way to do this was to set up a self-directed IRA, so I set out to create one. And in hopes of avoiding a financial planner’s large setup fees and annual charges, I decided to do it myself.

Setting up a self-directed IRA was not as easy as I’d hoped
After two weeks of staring at the computer screen, I learned a few things…most-significantly, that it was way harder than I thought. Here’s some of what I learned.

It’s hard for do-it-yourselfers. There are scores of companies out there that can set up a self-directed IRA for you…but the knowledge of exactly how to do it yourself is very hard to come by.

Determined to do it myself anyway, I spent a hundred bucks on a special report on how to set up a self-directed IRA, from a well-known e-letter publisher. …

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Look here for sunshine, warm seas, and capital gains

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Look here for sunshine, warm seas, and capital gains
Also: “Why aren’t you talking about Costa Rica?”

April 8, 2014
Puerto López, Ecuador

Ecuador’s currency: U.S. dollar

Dear Overseas Property Alert reader,

We sat down to dinner at an open-air restaurant just south of Puerto López, Ecuador. It was a quiet night, with a pleasant ocean breeze coming in from the Pacific. The waves crashed rhythmically against the face of the cliff far below. A thick row of tropical plants separated our table from the adjacent walkway, which worked its way down the cliff to the beach. The waiter had just finished uncorking the wine.

But the peace was shattered as the large head of a wild burro burst through the hedge and positioned itself over the table. She snatched a large mouthful of fresh-cut flowers from the centerpiece, chewed them for a few seconds, and then withdrew her head into the darkness. A few minutes later, she reappeared at the romantically lit swimming pool, where she took a long drink before moving off into the night. It turned out she was a local mascot, and I’m sure we weren’t the first visitors to be surprised like this.

This instance says a lot about the Ecuadorian coast. You can find beautiful beaches all over the world, but you won’t find many with Ecuador’s natural appeal and untamed character.

And the good news today is that there’s a classic “path of progress” investment shaping up in the town of Playas thanks to a major infrastructure upgrade and the coast’s largest development project.

The Ecuadorian coast has always offered a lot…but now we can add a solid investment potential to its list of many benefits. …

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Earn a hassle-free 10% rental yield in this emerging rental market

City Properties, Featured, Property Regions, Property Types, South America / By

April 1, 2014 Cali, Colombia

Dear Overseas Property Alert Reader,

My recent trip to Cali, Colombia, brought the most pleasant surprise of the past five years. The weather was great, the city was fun, the restaurants and nightlife awesome, and the people welcoming, open, and friendly.

Best of all, I saw rock-bottom prices—some of the best property prices on the continent. And these low prices can result in rental yields of between 10% and 20%.

If you didn’t see my first Cali report, follow the link to read up on Cali’s neighborhoods and property deals.

Rental yields are the best investment play in Cali. You can earn a 10%, “hassle-free” yield by managing a long-term, furnished rental. But if you want to take on the additional work of monthly or weekly furnished rentals, that yield can go over 20%. More on that to follow…

With respect to capital gains, Cali is a great place to buy an inexpensive home in a warm climate in a friendly country. But I would not buy in Cali to flip the property for a profit near-term. I didn’t see any market force in Cali that was poised to push prices up. I’d expect steady, slow growth in prices…but no more than that. …

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Bargain properties, great lifestyle, and a low cost of living

City Properties, Featured, Property Types, South America / By
apartment view of an expat apartment

The real estate market in Cali, Colombia, is the most exciting scene I’ve witnessed in a long time. This is an attractive city, with low property prices, a low cost of living, low cost of ownership, and high rental returns.

Best of all, prices start at less than US$66,000 for a nice apartment in one of the best neighborhoods.

Bottom line, Cali is hard to beat. It’s the least expensive market I’ve found in a modern city in Latin America. This is a hotbed of real estate bargains. Properties here are a real steal.

Getting a feel for what a city is like and for the lifestyle it offers is an important step in getting to know a city’s real estate market. And at resale or rental time it will help you to know who your potential buyer or rental client might be. Follow this link to read my previous article on Cali to see why it’s a good place to invest or retire. …

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Discover Beachfront Brazil and Affordable Tropical Island Living

Beach Front Properties, Featured, Property Types, South America / By
discover beachfront brazil

Itamaracá, Brazil, is the best place I know right now to buy a beachfront home at a reasonable price, thanks to the strength of the U.S. dollar against the Brazilian real over the last six months. At R$2.35/US$1 today, dollar-holders have seen their buying power increase 41% since the real was at its high of R$1.55/US$1 in mid-2011.

And there are few places in the world will you’ll find a three-bedroom house on the beach for less than US$125,000 that can also generate a great rental return.

When I drove over the causeway onto Itamaracá (pronounced ee tah mah rah KAH) for the first time back in 2008, the island appeared in front of me like an imaginary tropical paradise rising out of the sea. Its shoreline was lined with thick, tangled mangroves and spiked with tall palm trees reaching into the blue sky. Green, lush hills rose up behind the mangroves to the island’s peak, about 2 miles farther on. …

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