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Why And Where To Diversify Into Global Property In 2015

08 Jan
Investing In Global Property In 2015

Dinner With Four Pros

I sat at the end of the table one recent evening, enjoying my wine and trying to learn as much as I could from the four guys whose company I was sharing. These are guys whose opinions I respect a great deal when it comes to things like why and where to invest in real estate overseas.

Here’s my fly-on-the-wall report from a very enjoyable dinner with my husband Lief Simon and three of his fellow property investing pros, Lee Harrison, Mike Cobb, and Kent Payne…

Why Buy Property Overseas

I wondered of my four dinner companions…
Lief:Diversification. I see real estate as the ultimate vehicle for diversification—across countries, markets, economies, politics, currencies, asset types…”

Lee:For a better retirement. I’ve made several real estate purchases in different countries now, and in each case I’ve started the search with the question: Where do my wife and I want to be? We buy the place that works best for our lifestyle agenda. In every case, though, we have enjoyed not only use of the property but also good or better investment returns. In Montevideo, Uruguay, for example, we doubled our money on the apartment we bought to live in and then sold three years later…”

Kent:For the adventure of it. I’m in the business of real estate, and, of course, I want to make money. But the impetus for me to take my property investing business overseas was an interest in broadening my horizons. I’ve been living in Nicaragua for seven years. I’ve been learning a new language, becoming part of a new culture. The opportunities that this lifestyle has opened up for me are innumerable…”

Mike:For the yield. I agree with Lief that the big advantage to investing in real estate in other countries is the chance it provides the investor for true diversification in all ways, including for generating cash flow. When some markets are down, others are up…when some currencies are losing purchasing power, others are gaining…”

How Do You Identify A Market Of Interest

I wondered next…

Lief:I look for path-of-progress opportunities and an expanding middle class. Sometimes those two things go hand-in-hand…as they are in Panama right now…and that can create the potential for big upside long term…”

Lee: “Again, I start with where I want to be. For me, global property investing has become a way to fund a lifestyle I never could have afforded otherwise…”

Kent:Infrastructure improvements. This goes along with Lief’s path-of-progress strategy. I see that here in Panama City, for example, the new metro has opened. This must be affecting values for apartments within proximity of each new metro stop…”

Mike:I look for growing tourist traffic. This is a good, fundamental indicator of the potential for short-term rental yield…”

Investing In Real Estate Outside The United States Vs. Investing Stateside?

I wanted to know…

Lief:No Multiple Listing Service. This has big practical implications and makes the buyer’s job much harder…”

Lee:You need an attorney. He (or she) becomes the one person you can trust to guide you through the process safely…”

Kent: “Again, I’d have to go with Lief. The single biggest difference for anyone shopping for real estate in any country in the world other than the United States is the lack of an MLS. This has such big practical downsides…”

Mike:You can’t take anything for granted. When looking at houses in another country, for example, you might walk into a bathroom, see two taps, and assume, without even thinking about it, that the sink is plumbed for hot and cold water. Maybe…but maybe not. Bend down and look under the sink. Often in a country like Nicaragua, Belize, Ecuador, or Panama, you’ll see a single pipe coming from the wall with a Y-splitter sending that same pipe to both taps. In other words, that sink has cold water…and cold water…running from two spigots…”

Where are these guys looking to buy in 2015? Lief shared details of the markets he and his colleagues have on their collective radar right now earlier in the week. If you missed that dispatch, you can catch up here.

Kathleen Peddicord

Mailbag

“Lief, I was in Costa Rica in 1978 and vowed to return and live…then Nicaragua happened. I’ve been back to both of those countries numerous times, as well as Panama (where you and I met once), Mexico, Belize, Honduras, Ecuador, Peru, and Argentina. However, Colombia is in a totally different realm than any of the others. I’ve been to approximately 60 countries and wouldn’t even consider visiting there, much less moving. I have friends in law enforcement, and they think you’re nuts…lol.

“I’m sure you’ve been asked this before, but I cannot understand your preoccupation with a place that most people wouldn’t ever consider. If I could filter out your sending information on Colombia to me, I’d do so.”

M.F.

Hey, cool, I’ve been to 60 countries, too!

I’ve also lived and worked in 8 and invested in real estate in at least 25. When I first recommended Nicaragua, readers wanted to know how I could be so irresponsible. Didn’t I know about the Sandinistas? When I first recommended Panama, readers wanted to know how I could be so irresponsible. What about Noriega? When I recommended Argentina after that country’s currency collapse in 2001, readers wanted to know how I could be so irresponsible. Argentina is in chaos, they told me. How could I, in good conscience, send readers into that fray?

I made money in Nicaragua following my own advice. I made and continue to make money in Panama following my own advice. I made money in Argentina in 2001 following my own advice and am preparing to follow my own advice by investing in Argentina again in the wake of the next collapse in that country, which is near upon us.

And I’m making money in Colombia, specifically in Medellin, following my own advice. I’m also having a great time every time I’m able to return to that pretty little city for a few days of R&R.

You could make money in Medellin, too, if you wanted. First, though, you’d have to get past what “most people” are saying about the place. Most people thought Nicaragua, Panama, and Argentina were no-go zones, too, back in the day. They all were wrong then, and “they” are wrong now about Colombia.

Don’t write off Medellin without first seeing for yourself what I’m talking about. Get on a plane.