overseas home

The Dramatic Return Of The Irish Property Market

Plus: Dealing With Inheritance Of Your Overseas Property

March 3, 2015
Dublin, Ireland

1 euro=US$1.13

Dear Overseas Property Alert Reader,

The property market in Ireland has been hitting the headlines in a big way over the past 12 months. After spending years spinning downward into what looked like a black hole it might never emerge from, the market bounced back—in dramatic fashion.

With around half the value of the average home wiped out—and after years of distressed property auctions at which homes were sold off at 80% and even 90% discounts—things suddenly changed. A bottom was reached, and price declines slammed into reverse.

In December of 2014, Knight Frank’s global property index revealed that Ireland had beaten Turkey, Dubai, and the U.K. and had the world’s fastest-growing real estate prices. The little green island’s annual growth rate hit 15% in the 12 months ending September 2014.

At a glance, this looks like the same old pattern of boom to bust we’ve seen in the Irish market time and again. But there’s more to it this time.

Six Reasons This Irish Boom Is Not About To Bust Like The Last One

When you look a little closer, there are some key differences between the last, ultimately doomed property boom and what we’re seeing in Ireland today. Those differences leave the door wide open for overseas investors to step in and make a killing.

Speculation Vs. Buy-To-Live: What fueled much of the property bubble that culminated in the crash of 2008 was property speculation among Irish homeowners. Prices had been rising for so long and at such a speed, that a second home looked like a fantastic investment to a lot of people. Everyone and their mother became a landlord, renting out their second property and using the rent to pay off their mortgage.

With plenty of liquid credit to fuel the drive, construction companies threw together homes in increasingly out-of-the-way locations with little by way of amenities in the locality. Whole estates were being bought pre-construction by people who had no intention of ever living in the houses they purchased. Speculation on poor-quality product was a key factor in the crash. When it came, “ghost estates”—whole streets of these empty, low-grade properties—were left behind with nobody to live in them. Continue reading

The Market In Panama City

Jumping Back Into The Market In Panama City

Jan. 13, 2015
Santiago, Chile

Panama uses the U.S. dollar

Dear Overseas Property Alert Reader,

Panama City was a miracle property market for many years. People who bought condos in those gleaming waterfront towers back in 2002 saw the values of their properties skyrocket over the next six years. Many income investors saw solid, double-digit returns, and it looked to some like the boom would go on forever.

This all came to an end, however, starting in 2008. The bubble burst, a huge condo inventory was hung out to dry, and prices dropped to the tune of about 25%… in some projects, as much as 50%.

To make matters worse, a large block of hotel units came online, driving hotel occupancy rates downward. In desperation, the hotel lobby forced through a law in 2013 that placed limits on a landlord’s ability to rent his unit short-term… dampening the most lucrative segment of the rental market.

So, by 2010, Panama City had a market that was characterized by a large inventory, soft prices, and poor rental returns. Not exactly a magnet for property investors.

But here’s one important thing to remember.

This wasn’t a financial crash, and it didn’t approach the crisis that was seen in the United States at that time. It was the bursting of a foreigner-fueled bubble in the luxury condo market.

The rest of the country remained strong, and Panama in fact maintained one of the world’s strongest-performing economies. As the Hub of the Americas, Panama remained the region’s business and economic center. And the long-term economic picture in Panama continues to be bright. Continue reading

Earn 8% Current Income And Capital Appreciation In Colombia’s Hottest Market

Plus: The Dark Side Of Beachfront Properties

Medellin’s short-term, furnished rental market is one of the best-performing income markets in Latin America today. Double-digit returns are common. But it’s hard to tap into it, because in 2010, the city passed a law which banned rentals of less than 30 days in most residential buildings.

This offer is a way to get in on Medellin’s excellent short-term rental returns—as well as its real estate market—without the hassle or cash outlay required to buy your own property.

This property investment is offering an 8% preferred dividend, plus capital appreciation.

The project is the construction and operation of short-term rental units, taking advantage of Medellin’s short-term, furnished rental market. The developer is experienced in building and managing these types of projects, and has done a few of them already.

The name of the project is Envigado Lofts.

The Project Location Is At The Center Of A Newly Booming Area

Envigado Lofts is located in Barrio Jardines, in Envigado. While I often talk about Envigado as if it were a neighborhood of Medellin, it’s actually a separate municipality, starting on the southern border of Medellin’s El Poblado neighborhood.

Envigado has long been a desirable spot for expats; it’s easily walkable, charming in a colonial sort of way, and has good zoning controls to preserve its low-rise character. But Envigado has traditionally lacked the drawing power of neighboring El Poblado. While appealing, it couldn’t compete well with the huge array of fine-dining options, cafes, clubs, and nightlife of El Poblado, or its long-standing reputation. Continue reading