I’ll Be In Medellin May 11-13—You Should Plan To Meet Me There

Jan. 29, 2015
Panama City, Panama

Dear Offshore Living Letter Reader,

When I bought my apartment in Medellin, Colombia, I wrote that I don’t try to time currency exchange rates when investing in real estate. I can’t predict which way exchange rates are going to move any more reliably than anyone else can, so I don’t try. A reader at the time wrote in to say that my position was silly and that he was going to wait to invest in real estate in Colombia until the exchange rate was where he wanted it to be.

Three-and-a-half years later, the rate of exchange between the U.S. dollar and the Colombian peso has moved dramatically in favor of the U.S. dollar-holder. Your U.S. dollars buy about 35% more right now than they did in mid-2011, when I bought my apartment. During that same period, property values in Medellin have increased by at least 35% in peso terms. The guy who was waiting for the currency to move in his favor should feel comfortable buying right now. On the other hand, he’s going to pay 35% more in peso terms than I did when I bought. And I’ve had use of and rental income from my apartment in the meantime.

The guy who could have and who should have bought in 2011 aside, the current exchange rate is an opportunity to buy into what is a solid and appreciating market at what amount to 2011 U.S. dollar values. Continue reading “Lief Simon Hosts Live And Invest In Colombia Conference In Medellin May 11-13” »

Is Greece Real Estate A Buy?

Jan. 26, 2015
Panama City, Panama

Dear Offshore Living Letter Reader,

When I was in Athens in July 2013, effects of the austerity measures that had been in place for more than two years by that time, intended to help save the ailing country and its bankrupt economy, were visible everywhere. Traffic was light, restaurants along the shore were mostly empty even though it was the height of the season, garbage was rotting in giant piles across Athens, Greeks we spoke with were frustrated and demoralized, and real estate prices were low.

This last, of course, was of particular interest to me, and one big question on my mind at the time was whether real estate in Greece was a good investment.

I concluded no then, and I’m still not convinced this morning after the “anti-austerity” party won yesterday’s elections in Greece.

The euro is down to 11-year lows, hovering around US$1.12 as I write, so investing in something in the Eurozone is an idea anyone with U.S. dollars in his bank account wants to be paying attention to right now. Currency pundits are calling for euro parity with the U.S. dollar before the end of this year. We haven’t seen that since 2002. Again, this is a window of opportunity that you want to consider acting on.

At the same time, it’s possible Greece won’t be using the euro long term if the anti-austerity party now in power doesn’t keep to the terms agreed for the bailout provided by the rest of the Eurozone in 2010.

Should we care what currency Greek property is priced in? It doesn’t matter much if no one is buying Greek property.

So the question becomes whether the new government of Greece can turn the country’s economy around… erase a 25% or higher unemployment rate… and reduce debt levels from their current 175% of GDP. Continue reading “What Does The New Anti-Austerity Party In Greece Mean For The Country’s Economy And Property Markets?” »