Why Own Real Estate in Mexico?

Investment Real Estate Location Profile

Mexico is bordered by the United States to the north and Belize and Guatemala to the southeast. Mexico is about one-fifth the size of the United States.  Baja California in the west is an 800-mile peninsula and forms the Gulf of California. In the east are the Gulf of Mexico and the Bay of Campeche, which is formed by Mexico's other peninsula, the Yucatán. The center of Mexico is a great, high plateau, open to the north, with mountain chains on the east and west and with ocean-front lowlands lying outside.The consistent tropical climate, pristine beaches, and historical culture have established many communities within Mexico, such as Puerto Vallarta, Cancun, Baja, and Las Cabos as highly desired vacation destinations.  However, until the late 1990’s real estate in Mexico was only able to be owned by Mexican citizens.  It was unconstitutional for non-Mexican residents to acquire ownership interest in real estate.  Since that time, federal laws have been instituted to allow foreign investment and real estate ownership.  In today’s article we will examine Mexico’s past, present and future and why one should consider it a place to invest their financial resources in real estate.

GEOGRAPHY

Mexico’s thirty-one (31) states and one (1) federal district covers almost 780,000 square miles making it the world’s 8th largest nation.  The country curves from northwest to southeast, and continues northeast to the Yucatan Peninsula.  To the South and West, Mexico is bordered by the Pacific Ocean.  The Sea of Cortez lies between the mainland and Baja California.  The east coast of Mexico is bordered by the Gulf of Mexico from the USA border to the northeastern tip of the Yucatan Peninsula.

ECONOMY

The economy of Mexico is supported by about 108M Mexican residents.  The national currency is the Peso.  End of Year 2007 economic estimates show key metrics demonstrating strength and stability such as real GDP growth rate of 3% on a base of $1.353 Trillion (about 1/4^th of the US), as well as low inflation of 3.8% and very low unemployment of 3.7%Tourism, agriculture, ranching, timber, mining, oil, natural gas, fishing, and manufacturing are Mexico’s primary revenue earners.  Mexico has a free market economy and free trade agreements with most of their main trading partners.The recent administration has expanded and invested in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports to support the present and expected future growth.   

FUTURE OUTLOOK

The Mexican economy has come a long way from the economic instability of the past.  Past economic collapses caused severe problems and economic instability, the last of which occurred in the mid-1990’s.  During this period of political and economic unrest, and for long term stability, Mexico was forced to drastically de-value their currency.  The short term effects of this move were overnight increases in credit interest, as high as 80% and inflation that climbed as high as 50%.  This instant cost of living increase spelled disaster for many businesses and residents.  This issue was quickly brought under control and best practices were put into law to extend the economy to make broader contributions globally, to consistently grow the middle class, and to increase tourism and real estate development.Mexico has a very rosy outlook.  For the first time, in the face of a severe real estate correction in the United States, Mexico boasts a thriving housing sector whose record growth leads Latin America.  Long thrashed by swings in the U.S. economy, this is a significant sign of increased economic independence and stability. 

Interestingly, the booming Mexico real estate market is now providing an outlet for many that are looking to escape the U.S. downturn.Money and credit liquidity are now more attainable than ever in Mexico due to new laws put in place to encourage domestic and foreign real estate development and mortgage growth.  The increases in domestic savings and wage growth have created the opportunity for many Mexican residences to own their first home.  Supporting the new-found growth, President Felipe Calderon has set a national goal of one million mortgages by the year 2010.  Behind the boom are six years of economic growth and stability -- and a national shortage of six million residences. While interest rates are falling, just six percent of Mexico's 25.7 million homes are financed with mortgages -- compared with about 67 percent in the U.S.

The pent-up mortgage demand in a nation of 108 million people means lenders can be choosy, enforcing strict standards that have held delinquency rates below 4 percent in third quarter-2007, compared to 5.6 percent in the U.S.  The Mexican lending environment is very stable because lenders don’t need to expand portfolios with high risk loans to weak credit applicants to grow business.  There is no Mexican subprime issue because that category of lending just doesn’t exist.  Mark Zaltzman, chief financial officer at Su Casita, one of Mexico's largest mortgage lenders commented, “'Mexico doesn't have a credit issue. We can still choose our borrowers because demand is so great.”''Mexico is in the early stages of expansion,'' recently commented Juan P. De Mollein, managing director for Latin American structured finance at Standard & Poor's. ``There are still plenty of points for evolution because there's still plenty of demand.''Now that the appropriate federal laws are in place to make it possible for foreigners to own real estate in Mexico, according to recent estimates, over six million American and Canadian buyers will migrate to Mexico to purchase real estate over the next decade.  Most of these real estate purchases are projected to be in the most luxury, already famous vacation destinations.  At a very conservative average price of about $300,000 per residence, Mexico is likely to see at least 1.8 Trillion dollars in real estate investment over the next decade.  Prospective buyers name beauty, location, convenience, and affordability as some of the main reasons they are looking to invest their resources in Mexican real estate.  This is the beginning innings of a longer term growth and prosperity trend for Mexico.  The world is taking note and migrating in droves.  Real estate prices in most desired Mexican locales have been on the rise over the past few years, a trend which looks like it will continue given domestic and international demand and growth projections over the next decade.

 Is Mexico the Right Place for Your Second/Investment Home?

Maybe…Depending on Your Goals and Objectives

What Part of Mexico is Right for You?

Contact Us to Help Sort it All Out! 

Why Own Real Estate in Panama?

Investment Real Estate Location Profile

Panama is a small tropical Latin American country bordered on The North by the Caribbean Sea and the Pacific Ocean on the South.  The consistent tropical climate, pristine beaches, lush mountains, and booming economy has gotten the attention of people from around the world.  In today’s article we will examine Panama’s past, present and future and why one should consider it a place to invest their resources in real estate.

HISTORY & GEOGRAPHY

Panama, a smaller Latin American country is home to a population of a bit over three (3) million people.  The climate in Panama consistent and tropical, with average temperatures around eighty (80 F), Panama is well known for is lush mountain ranges, and pristine beaches. About fifty (50%) percent of the population lives in the Colon region of the country local to the famous Panama Canal.  Panama's history has been shaped by its strategic location between the Pacific Ocean and the Caribbean. Early in the 16^th century, native Panamanian tribes quickly disappeared after the Spanish arrived with their weapons. Panama City, on the Pacific coast, thrived as Spain conquered and plundered Peru. Caravans loaded with gold traveled from Panama City to be loaded on ships bound for Spain. However, this wealth attracted pirates and, in the early 1700s, Panama's Caribbean shore was dotted with so many pirate strongholds that shippers chose instead to sail around Cape Horn to Peru. Panama's importance rapidly declined, and Spain did not contest Panama’s inclusion as a province of Colombia when it won independence from Spain in 1821.  Since that time, Panama has spent many decades suffering through various corrupt dictatorships and unscrupulous government regimes, including the most infamous General Manuel Noriega who after losing the election in 1989 attacked the winning candidate on national television and remained in power with income provided by drug trafficking.  The dictator declared war on the USA in 1989 and after a short time with the help of 26,000 soldiers, the USA removed Noriega from office.  He was arrested and convicted of money laundering and is currently serving a forty (40) year prison sentence.In 1994, Ernesto Perez Balldares took office and fulfilled promises to end corruption, improve the economy, and implement nationwide health services.  Panama has never looked back.  Since 2004, the current president is Martin Torrijos, a Texas A&M graduate with a degree in economics.  He has worked diligently to continue to make strides and to grow the upstart free-enterprise democracy of Panama.

ECONOMICS

Blessed with unique circumstances due to a favorable location, Panama is more diverse than many economies.  Panama is a free-enterprise democracy with significant resources and is booming.  The country is making global strides in agriculture, financial services, tourism, and international transport via the Panama Canal.  A combination of surging world trade volumes and a boom in port development, infrastructure and commercial and real estate is bringing Chinese-style growth to the country and inviting comparisons with international business centers such as Dubai and India.

·         In 2006, the Panama economy grew about eight percent (8%). 

·         In 2007, the Panama economy expanded by at least nine percent (9%) and possibly over ten (10%). (Financial Times, 2007) 

This is a very rapid rate of growth, among the fastest in the world, and is produced over a broad portfolio of stable businesses.  The growth suggests that Panama has corrected their past inadequacies and has “arrived,” and is making a difference.  Panama is taking advantage of its geographic location and benefiting heavily from the growth of trade between Asian manufacturing centers the North American and European markets.  Since Panama took full control of its canal from the USA at the end of 1999, overall traffic has expanded by more than 33% and, the number of containers used to package electronics, textiles and other factory products transported across Panama has increased 300%. Due to this explosive growth and more expected in coming years, the Panama government is pushing ahead with ambitious plans to double the waterway’s capacity.  The expanded Panama Canal will be big enough to accommodate the largest maritime vessels increasing growth even more.President Martín Torrijos, a graduate of Texas A&M University with an economics degree has stabilized public finances and is supporting infrastructure upgrades to ensure the country is able to accommodate the influx of people globally coming for opportunity, tourism, as well as second homes and primary real estate residences.  Panama has also become the hub for banking in Latin America.  USA banks such as Citigroup and HSBC among others have a significant presence in Panama City.  Growth in this arena is also expected in coming years.  

FUTURE OUTLOOK

Panama is a country that welcomes emigrants from The Americas and Europe.  Approximately 80% of Panamanians are from at least partial European decent, and they realize their growth is global and needs influxes of financing from other places to be sustained.  Panama no longer has a military.  The USA ensures the national safety of Panama.  With the increases in the broader economy, the Panamanian middle class is expanding and enjoying a better, more stable quality of life.  Literacy is high….over 91% can read and write.The official currency of Panama is the US Dollar.  This is convenient for those migrating from the US as there are no concerns about exchange rates and their effects.  Also, although the USD is the main currency, Panama is constitutionally forbidden to introduce additional dollars into their financial system.  This is a refreshing change from other less stable economies that literally just print money when needed causing instability and irrational swings in inflation.  Federal laws are in place to protect both the buyer and seller in real estate transactions and property is owned by acquiring title on a fee simple basis much the same way as in the USA.  In fact, many real estate transactions, and mortgages on property in Panama are carried forward and secured by US title companies and banks.Further, Panama has a really beneficial tax structure in place to encourage non-citizens to consider investing their resources in Panamanian real estate.  For example, Panama does not charge taxes on any income gained outside of Panama. The future is bright for Panama and for those choosing to buy the “right” Panamanian real estate.  Panama has a stable, free-enterprise democracy, an economy that is establishing long term growth trends, and a strengthening middle class.  This is the beginning innings of a longer term growth and prosperity trend for Panama.  The world is taking note and migrating in droves.  Real estate prices have been on a significant rise throughout Panama over the past few years.  However, real estate is starting at a very low base and still sells at a large discount to many surrounding markets. 

Is Panama the Right Place for Your Second Home?

Maybe…Depending on Your Goals and Objectives

Contact Us to Help Sort it All Out!

Why Own Real Estate in Jamaica?

Investment Real Estate Location Profile

Jamaica, an island of beautiful white sand beaches, crystal clear waters and lush mountains has long captured the imagination of Americans and others, however the nation’s past reputation for petty crime and entrenched poverty have often left tourists wary of traveling there.  In today’s article we will examine Jamaica’s past, present and future.

HISTORY & GEOGRAPHY

(146) miles in length and (50) miles wide, Jamaica is situated south of Cuba and west of Hispaniola in the Caribbean Sea.  The climate in Jamaica is tropical, with hot and humid weather, although higher inland regions have a more temperate climate. The island of Jamaica is home to the Blue Mountains inland, and is surrounded by a narrow coastal plain. Most major towns and cities are located on the coast. Chief towns and cities include the capital Kingston, Portmore, Spanish Town, Mandeville, Ocho Rios, Port Antonio, and Montego Bay.Discovered by Christopher Columbus in 1494, Jamaica is the third largest island in the Caribbean, and the most populous English-speaking Island in that region.  From its discovery till 1655 Jamaica was a Spanish territory until it was seized by the British.  Independence came slowly to the Jamaican people, finally achieving sovereign status in 1962.

ECONOMICS

More diversified than most Caribbean economies, Jamaica has significant resources.  The country is involved in agriculture, mining, financial services and tourism.  Unfortunately Jamaica experienced a bout of hyperinflation in the 1980’s.  Inflation peaked at 80% in 1991, but recent economic reforms have led to a dramatic reduction in inflation.  Additionally, significant investments in infrastructure bode well for Jamaica’s economic future.  Sir Kenneth Miller, President and Founder of the UN National Committee for Habitat recently commented, “The modernization and re-development of MBJ Sangster International Airport and the North-coast Highway project, connecting the resort towns of Negril, Montego Bay and Ocho Rios, both projects with major private sector participation, have spurred unprecedented levels of foreign direct investment. Indicators suggest that Jamaica may move ahead of many other Caribbean nations in coming years.”  Ranked remarkable number 17th by the World Investment Report, Jamaica has attracted in excess of US$3bn in private, foreign investment in the last three years alone, and change is taking place in almost every industry corner, including real estate, tourism, banking, telecom, energy and transportation. In addition to some ultra-luxury real estate projects, notable projects under development along the northern GOLD COAST include the 25,000 seat Trelawny Multi-purpose Stadium under construction, a new Convention Centre in Rose Hall and the new Shoppes at Rose Hall offering high end duty free shopping and entertainment.

CRIME

Plagued by a history of poverty, Jamaica is finally becoming very successful in some locations at reducing crime as they were in reducing inflation.  In the exclusive areas, tourists and real estate owners are very safe.  With the billions of dollars in consistent infrastructure investment and more on the horizon, most areas, especially along the Gold Coast of Montego Bay, have become a prime location for privacy, beauty and privilege.

THE FUTURE

Jamaica has significantly improved their economic foundation, which is leading to a higher standard of living and much increased global attention and sustained increases in annual tourism.   Because it is important to feel safe when vacationing or investing overseas, the best option for tourists and investors is the northern coast (Gold Coast) of Montego Bay, especially in the most elite Rose Hall district.  The Gold Coast of Montego Bay is well known for its stunning beauty, captivating beaches, and now its high-end luxury real estate and shopping.  With commitment from the Jamaican government in recently spending prodigiously in the region to improve their airport, roadways, and police protection, tourists and real estate owners are afforded all the comforts of other resort locations with the unique character and the beauty that is only Jamaica, The Gold Coast has become a very sustainable location to own luxury real estate.  Jamaica compares favorably with all the Caribbean islands, due to its unique culture, accessibility (only a couple hours direct flight from most US hubs) creative and friendly people, ideal weather, wonderful beaches and spectacular mountains and an abundant water supply. Jamaica provides an opportunity for investment real estate buyers to have it all and get ahead of a long term positive economic and infrastructure boom.

Anguilla - Physical Characteristics

Anguilla is an island in the Eastern Caribbean that is (16) miles long and (3) miles wide and boasts (33) white sandy beaches and transparent turquoise waters. Its topography of copious reefs, white coral rock and stunning coastline entice visitors from around the world.  The unspoiled reefs make Anguilla a mecca for snorkeling and diving and its history as a British territory and spice island foster the exploration of numerous underwater wreck sties.   Anguilla’s tropical climate yields a year round average temperature of 80 degrees Fahrenheit with approximately 35 inches of rainfall annually.  Water temperatures are in the upper 70ºs to lower 80ºs. Optimum diving conditions are in the summer months when visibility is at its highest and there are little or no ground seas. Anguilla has long been considered among the most exclusive islands in the Caribbean.  Famed for its fine sand beaches, the island has long attracted the rich and famous to its shores including Uma Thurman, Brad Pitt, Denzel Washington, Beyonce Knowles, beau Jay-Z and others. 

Anguilla - Economic Drivers

Due to its beautiful beaches, but lack of overall resources, tourism has long been the island’s dominant economic force.  In the early 1980s, the local government exercised a considerable amount of foresight and set regulations limiting development to boutique hotels and resorts. Nearly thirty years later, Anguilla continues to flourish as an inconspicuous retreat. Void of discos, casinos, duty-free shopping, or cruise liners, Anguilla offers discerning globetrotters a true escape, free of worldly diversions. Anguilla is home to world-class resorts including Cap Juluca, CuisinArt and Malliouhana – all recognized in Condé Nast Traveler’s Top 15 Caribbean Resorts for years running. The island was also recently rated as the world’s 15^th Best Island by National Geographic Traveler for its “beaches of legendary beauty, friendly people, fine dining and art.”

Anguilla - History

Claimed by the British in 1650, this historic relationship remains in place today as it is a British dependent territory and it’s governed by a parliamentary representative system.  The island’s small population of 13,500 is predominately Christian and English speaking.  Driving is on the left as in the U.K., but Electricity is 110 AC voltages, the same as in the US.  Anguilla’s currency is the East Caribbean dollar; however the U.S. dollar is also widely accepted.

Anguilla - Critical Factor Analysis

When considering a real estate investment in Anguilla (or anywhere) many factors must be evaluated independently.  The first, of course is price.  As has been well-documented, real estate prices in much of the world have reached excessive levels.  As the real estate bubble has now popped, real estate prices (in general) are now much closer to their historical norms with relation to incomes, rents, and other measures.  Location in any real estate investment is another crucial factor.  It is here that Anguilla excels.  The island’s small size and population have allowed it to remain insulated from the mass construction and less affluent tourists (that eventually downgrade the exclusivity factor) that frequent many other desirable locales.  Anguilla has only a small airport, requiring most tourists to arrive via ferry or small plane from St. Maarten or Puerto Rico, ensuring that its beaches will remain some of the world’s most beautiful and private.Another critical factor is the rule of law.  Anguilla’s British background, use of English, and comfort level with American currency make it a safer investment than some other exotic locales that may not share similar traits.

Anguilla - Conclusion

In conclusion, Anguilla’s many positive attributes including beauty, affluence, exclusivity, climate, and government system, far outweigh its negative dependence on tourism and vulnerability to Mother Nature.  If one were interested in investing in Caribbean real estate, Anguilla should be at the top of your list.