View Full Version : foreign rill estate!
01-20-2008, 02:59 PM
so, supposing one was a young californian lady finna take out a loan and buy real estate in latin america because it's soo cheap and she bets in 10 years it'll be sooo expensive and if she buys a shitty beach front property now she could either move there when she's got a nest egg or sell it for a kojillion dollars when (:() the area is inevitably developed by The Man, could she do it?
I've heard about americans having summer homes in costa rica but would it have to be a time share or can americans actually OWN land generally speaking or does it really depend on the country? does anyones mamis o papis have non-lineage property in other countries?
01-20-2008, 03:28 PM
Americans can buy land down there. My dad had a colleague who used his retirement to create a beach resort on some island. Not sure which country it was though.
And he's using it as a business catering to tourists. So they put a lot of sweat and blood into building the place up (since they did it themselves). That kind of work will definitely bring the price up quickly.
So I imagine it's a reasonable venture. Though I know nothing about it. Nor can I offer any sources on how the market forecasts look or anything, but you should look into that kind of thing. I mean if the government goes communist or simply nationalizes foreign owned land you'll end up with a huge loan and no way to reprise it.
So uh, don't buy it in Venezuela.
01-20-2008, 05:22 PM
It really depends on the country. Bahamas or Cayman islands and similar other tax-havens make investment really simple so anyone in the world can buy a property but they are also quite wealthy places so it's probably not the kind of real estate you're looking for.
I've no idea about the red tape in other countries. Unless you're a citizen of the country (or can strike a deal through a citizen), the procedure could be a little complicated. My best advice would be to call around couple of American realties companies (look 'em up on Better business bureau first) or individual brokers and try to make as much sense out of the procedure as you can. Ask a lot of questions about the procedure, inquire about their services and prices and "guarantees", ask if they have some sort an investement guide perhaps to browse through. Keep on shopping around until you found someone who isn't there to rip you off or until you're familiar enough to do it yourself. It can't be that hard if other people have done it, you just have to know what you're doing.
01-20-2008, 07:07 PM
i only know stuff about EU real estate laws (duhh) but just wanted to say that's a pretty sweet idea. it definitely does depend on the country though, so you might need to hire a reliable person to guide you through the process.
good luck <3
01-20-2008, 09:32 PM
Personally, I'd look into a lot of things before investing. Numero uno is talking to someone familiar with the real estate laws of that particular country. I'm sure it's more lenient between US Americans and the banana republics, but I know that over here in China, we waiguoren can't own property (though there are ways around it, with proper bribage).
Secondly, there are a lot of things that could go wrong, so I'd just advise you to be careful. Is the area on track for development? Is this for certain? How stable is the country's government/economy? (I'm not saying that like there's a 50/50 chance of complete and total chaos because it's a third-world country, but if we're talking a long-term investment of significant sums that will tie you down for years, you should be very, very sensitive to such things - it was miscalculation of such an occurance, for instance, that bankrupted one of the largest hedge funds in US history, run by "Nobel prize-winning" economists). In a similar vein, what is the possibility that, in the course of a decade, a hurricane will hit the area (as someone who's extended family once shared a house on the Gulf of Mexico, I can tell you that hurricanes can fuck your shit up), because such a 'cane stands the chance not only of knocking apart your house, or at least requiring more money to repair damages, but also might devastate the area and make it less attractive for tourists. Also, I can't find any information on the exchange-rate fluctuations within the past few years - currently, with the dollar at historic lows, you stand to lose a fair amount of money if it rebounds, which is very possible over the long term.
...interesting, according to one site "The Costa Rica currency exchange rate has an unusual relation to the US dollar called a 'decaying peg', this means that it is not defined by the US dollar's constant value but grows weaker at an approximate 3.3 colones more than the currency exchange rate per month. In Costa Rica, the exchange rates change daily as explained before the cost of living is extremely affected by this situation."
If this is the current situation, I would be very cautious about putting dollars into a currency, that, over the long term, is guaranteed to grow weaker. Essentially, your investment is automatically handicapped at something like 6% annual growth, which is huge. By the way, that's ON TOP of the x percentage that you'll have to pay to the bank to repay the loan. So you have to plan on the value of the property appreciating at a faster rate than the combined, continued devaluation AND the percentage you'll have to pay on the loan, and that's just to break even. Now, to make it even more bleak. Instead of all that money that you'll use to repay the loan, you could be, at the minimum, taking it and putting it in a simple savings account, which generates something like 3% annual growth, so taking opportunity cost (the "hidden" costs that you pay, taking into account other possible ways that you could use your money) into account, you need even more annual growth in your investment, just to break even.
Really though, if you're considering a large investment, especially one that will be tied down by a loan, you shouldn't just ask random people on the 'net - make sure you know the local situation (i.e. who is developing, how confident are they in their development, the comparison between it and other destination spots in terms of tourist growth). If oil costs continue to go up, airplane prices will too, and if the dollar stays weak, those two forces combined could cause less Americans to look abroad. ALSO, what will you do with it if you own it? If you want to buy a house, you'll need someone to look after it. If you want to rent it out so you'll have money coming in, you'll really need to maintain it, unless you're just planning on buying it for the land, which you figure will be bulldozed and paved in a decade, but if you plan on that, you essentially plan to spend a decade paying off a loan and not using that money for any other purpose than the possibility that you'll get a massive pay-off down the road.
Essentially, I'd be really, really cautious. If you are certain that you'll move down there, and that it'll be cheaper to take out a loan now when you don't have a lot of money (and pay all the related costs) than it will after you've built up a tidy sum, then do it. Of course, I haven't been taking the cost into account. If you only plan on spending, say, $2,000 then it'll be much easier to pay off the loan, and there's much less risk in getting tied down/losing a substantial portion of your saving than if it's ten times that much.
But anyway, if I were you I'd do a LOT of research on the subject, and ask people that are better informed than I. Taking out loans for investments like that is a risky, risky business, sister.
01-20-2008, 10:05 PM
I wouldn't do it on a loan. You don't want to borrow money against something that's risky and that you have little control over. If you can save up, that would be good because at least you're not owing anything if something does go wrong. Also if you're investing in property you really want to be able to get out there and check it out for yourself, or have somebody reliable check it out for you before you purchase.
That and even if I was a financial risk taker, which I'm not in the least, I wouldn't be doing it right now because the markets are looking fairly shitty all-round and trying to get a loan in this environment just seems insane.
01-21-2008, 06:52 PM
well the property that got me going was a huge plot of unfarmable land in this little beach town I accidentally stumbled upon in mexico. it's $60,000. there isn't much electricity, it's hours away from everything, the population is something like 100, and they're pretty much self sufficient. there are some hippytourist things going on there because it's a sea turtle sanctuary but other than that it's completely unspoiled. there were 2 hotels being built when I was there and I have a feeling it's going to be discovered soon. vedy sad. there are hurricanes from time to time, but the people there have systems of keeping their houses relatively safe. most of the year the weather stays upwards of 80F. it's such a lush little community, you could go down there with nothing but $30 and a hammock and live more than comfortably for months. there's fruit trees everywhere and food otherwise is dirt cheap. I got a huge dinner of fish that'd been caught that morning for around $3 US.
anyway, of course I'm gonna dig a little deeper on this foreign real estate thang. and I'm not going to make any moves until I'm a complete expert on the subject. nicole, you're right about the loans. especially while my country is brinking on a recession. that's my biggest concern. real estate is such a gamble if you don't know what you're dealing with so I'd be sure to get a million and 1 educated opinions before proceeding with anything. there are always partnerships and other financial options other than loans too. it's just such a sure thing that it's going to be discovered and exploited, in which case the land would be worth kojillions. if it's not exploited, I could move there and live comfortably for years just on savings from maybe 6 months of solid work. basically, it's still a pipe dream (so to speak haw), but I'm beginning to take it seriously. and it's just such a golden opportunity and I don't it'll be as plausible when I'm middle aged and can probably afford it.
01-22-2008, 09:03 AM
Sounds like a paradise. I spent four years in a small vilage with a lot of green, fields and forests and rivers and horses... it's magical.
The Fed just slashed interests again....
And as far as the currency goes, it's always a bit of a gamble. But what if the dollar only continues to plunge? Or what about currencies that are closely related to the USD?
I don't feel like typing much, but investing, though a serious matter, isn't a bad venture at all right now. I mean, there are pros and there are cons.
01-22-2008, 09:47 AM
where was your paradise?
god, I'm getting like. .00006%. washington mutual blows.
01-22-2008, 11:46 AM
I lived in the Jordan valley, Israel. It's not quite a paradise, but the place was abundant in vegetation (including tropical fruits) and all things green and grey.
Here's an album I found that reflects the view. (http://picasaweb.google.com/lh/searchbrowse?q=%D7%A2%D7%9E%D7%A7+%D7%94%D7%99%D7% A8%D7%93%D7%9F&uname=guyflenner&psc=G&filter=1#0)
I was also about 15 minutes (on bike) from the river Jordan and about 30 from the lake Kinneret.
01-23-2008, 11:50 AM
it's beautiful. could you swim in that river or was it too strong?
living in a beautiful place does immeasurable good for your psyche. I grew up in the boonies around Big Sur, it's completely to blame for my unwavering sanity. that's why I have to move to mexico and sleep in hammocks and watch turkey vultures.
01-24-2008, 10:52 AM
The stream was strong in places, but you could certainly swim there. We did most of the actual swimming in the lake though and community pools. Christian tourists were known to swim in one stretch one of the river where Jesus was reputedly christened. Or is was it the place he walked on water? Whatever. Weirdos...
The best part about living in a place like this is the freedom. It's not the most beautiful, but its wild nature and the lack of people allows for many explorations and adventures. I absolutely adored to play imaginary games (with or without friends) in places where I knew that no one else would see me, or taking up challenges like climbing rocks and hills or forcing the river (in its strong parts) or building giant bonfires. As a thirteen year old, I packed matches, a pocket knife, a sleeping bag, food and water and biked with my best friend beyond the hills and back (easily 100km journey). I can't even begin to explain what it did to my psyche, but i'm fucking grateful for whatever it did.
01-24-2008, 07:03 PM
yo, some peoples i know were involved in the development of this http://www.lavida.com. if you go to "Availability" and then "owning land in Mexico" it has quite a bit of info.
here's the main part:
Until 1993, it was not possible for foreigners to hold title to land in Mexico that was within100 kilometers from a border, or 50 kilometers from either coast.
In 1993, then, the Foreign Investment Law was passed whereby foreigners may purchase land in restricted zones provided the deed is held in trust by a trustee. Thus, banks such as Banamex and Bancomer operate as trustees and can hold your deed in trust for you. The banks, which must hold a permit issued by the Mexican Secretary of Foreign Relations, charge an annual fee for this service, generally around $500 USD. The trust agreement is valid for 50 years and must be renewed thereafter for another 50 years within 90 days of the expiration of the first term.
hope this helps!
01-24-2008, 08:07 PM
Build a summer house in Mexico, Mags and we'll come.
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