The Travel 3 Count, where we bring you 3 travel stories that you shouldn’t miss.
Ecuador’s Galapagos is a must see destination in 2013.
1. Destinations to Watch in 2013
First Up: Conde Nast Traveller’s destinations to watch in 2013 list includes some of Latin America’s gems. Here are the top Latin America destinations to watch in 2013.
- Panama. No longer just a place where ships pass in the night, Panama is the cool Caribbean destination of the moment.
- Mexico’s Mayan Riviera. The Mayan Riviera is set for a bounteous year in 2013.The vibe is deliberately hippy-chic, lo-fi by day and up-tempo at night and is a great place to stay for discerning travelers seeking barefoot luxury.
- Ecuador’s Galápagos Islands Galápagos is one of the most fascinating places on earth, an evolutionary melting pot. It’s already at the top of many wishlists, for the intrepid and for animal-lovers.
2. 21 Cheap Places to Visit… Where Does Latin America Come In?
Up Next. Want to travel, but don’t want to spend lots of money? These 21 cheap travel destinations let you get the most bang for your buck. Want to try it? Tim Leffel’s can help. His mission is to show cheapos how to find travel destinations they can afford.
Where is his favorite cheap spot in Central America’s? Ometepe, Nicaragua.
In Nicaragua, it’s a wide-open blank slate, because there isn’t much tourism outside of Granada and San Juan Del Sur. That means there are but a few nice hotels and restaurants and your main mode of transportation is mostly on chicken buses. But if you want cheap and exciting, Nicaragua is your choice.
3. 6 Must See Latin American Destinations
Finally: With over 7 million square miles to cover and 430 million people to meet between Central and South America, deciding where to start your Latin American adventure can be a little tricky, but with Bootsnall Travel Guide’s six must-see Latin American destinations, the planning just got easier.
- 1. Quito, the Amazon, and Cuenca – Ecuador
- 2. Rio de Janeiro and Iguazu Falls – Brazil
- 3. Lima, Cuzco, Lake Titicaca and Machu Picchu – Peru
- 4. Buenos Aires to Santiago via Bariloche – Argentina & Chile
- 5. La Paz, Sucre and more – Bolivia
- 6. San Jose to Panama City – Costa Rica & Panama
Adventure-lovers rejoice! These top sports are certain to deliver pure beach bliss, idyllic islands, curious creatures, and small towns packed with charm.
Granada, Nicaragua, has a lot to offer visitors. Rich in culture and history, Granada is a much sought-after travel destination. It’s a great jumping off point to tackle other little known, but adventurous day trips. Here are 5 to get you started.
Take a swim in a crater lake, Laguna de Apoyo outside Granada, Nicaragua.
1. Take a Swim in Crater Lake
Granada is HOT. And though it’s on the shores of Lake Nicaragua, it’s nowhere that you want to swim. But head outside of Granada to Laguna de Apoyo, an ancient volcanic crater and rimmed by green hills. Along its edge are many hostels, most of which will allow you to use their beaches. Admission’s cheap, around 6 bucks.
2. Climb a Bell Tower for a $1
For just a buck, you can ascend Iglesia la Merced. Built in 1534, sacked and burned by Henry Morgan in 1670, then rebuilt, the church itself is pretty, but climb to the top for the single most spectacular view in Granada.
3. Hike an Active Volcano
Volcan Mombacho is the 4,400 foot volcano that towers over the city of Granada. It’s beautiful, green, and begs to be climbed. Though it’s active, it hasn’t erupted in over 500 years, so have no fear. There are three different trails to choose from, each varying in difficulty. The guide costs $15 for a group of up to 5 people, or $20 if you want your tour in English.
4. See a Stone Idol Carved in Bedrock
About 15 miles south of Granada sits Zapatera, an extinct volcano surrounded by Isla el Muerto and a dozen or so other islets. These islands were enormously important to the Nahuatl people, who used them primarily as a vast burial ground and sacrifice spot. The sites of La Punta de las Figuras and Zonzapote are particularly rich in artifacts and have a network of caves that have never been researched. Ask around and seek out the petroglyphs carved into the bedrock beaches of Isla el Muerto.
5. Buy a Cheap Souvenir at a Local Market
Not too adventurous, if you speak Spanish, but Masaya Market is where the Nicaraguans shop. So most vendors only speak Spanish. It’s the best place to buy souvenirs in all of Nicaragua. With aisles upon aisles of Nicaraguan delights, and unlike in many souvenir markets, you barely have to bargain. It’s not a touristy spot, so you’re going to get a real feel of a true Nicaraguan market.
Further Reading on Granada
For an in depth look at Granada check out our Granada Starter Kit, a 64 page book packed full of info on Granada.
Panama City ranks as the cheapest place to live in Latin America.
A global study of the cost of living published by the EIU ranks the most expensive and cheapest cities in the world. While Tokyo continues to hold the top spot for the priciest places to live in; Panama City, Panama placed 8th among the world’s cheapest places to live.
The Global Survey Cost of Living, published twice a year by the EIU, compares hundreds of prices on 160 common products and services, such as food, drink, rent, utilities, education costs, and household items.
The 10 cheapest cities in the world
1. Karachi, Pakistan 2. Mumbai, India 3. New Delhi, India 4. Kathmandu, Nepal 5. Algiers, Algeria 6. Bucharest, Romania 7. Colombo, Sri Lanka 8. Panama City, Panama 9. Jeddah, Saudi Arabia 10. Tehran, Iran
Top 10 most expensive cities
1. Tokyo, Japan (up one place) 2. Osaka, Japan (up one place) 3. Sydney, Australia (up four places) 4. Oslo, Norway (up one place) 5. Melbourne, Australia (up four places) 6. Singapore (up three places) 7. Zurich, Switzerland (down six places) 8. Paris, France (down two places) 9. Caracas, Venezuela (up 25 places) 10. Geneva, Switzerland (down seven places)
The Economist Intelligence Unit’s Worldwide Cost of Living survey is a full service that enables human resources line managers and expatriate executives to compare the cost of living in 140 cities in 93 countries and calculate fair compensation policies for relocating employees.
With the fastest growing economy in the Americas, Panama has often been compared to 1970’s Brazil or present day Singapore. And with ongoing projects such as a $5.3 billion expansion of the Panama Canal and a $13.6 billion government investment in infrastructure, this Central American country is not slowing down. Its sophisticated banks and stable economy attract investors worldwide.
In addition, the Panamanian government has a long history of establishing incentives and atmospheres that make investing in this beautiful landscape even more attractive. The list below highlights some of the more significant benefits:
Panama Incentives for Retirees & Expats
Retiree Tourist Visa
The Turista pensionado affords retirees (who must be a minimum of 18 years of age), who can show proof of income, the following benefits:
- Import of household goods (up to $10,000) free of taxes
- Import of a car for personal use every two years
- Property tax exemption on a home that is your only residence
- Discounts between 15-50 percent on restaurants, hotels, entertainment, and professional services
Panama Real Estate Laws
Law 54 – Foreign Investor Protection
This law grants foreign investors and their businesses the same rights and freedoms as Panama natives. They are also granted the right to dispose of their investment profits and repatriate their interest, dividends, and profits.
Article 44 – Private Property
This section of Panama’s constitution guarantees that the rights of property owners are protected for both Panamanians and foreigners alike.
Law 24 – Reforestation Investment
This law provides benefits, including a 25-year income tax exemption, to those who purchase property for the purpose of reforestation.
Law 2, 2006 – Island Property and Concessions
This law allows foreigners to purchase island property, for the first time ever, provided that it is used for the purpose of tourism and that certain other conditions are met. Concessions, or lease agreements, for government-owned land can also be granted for use in tourism.
Law 9 – Casco Viejo Development
These tax deductions and exemptions were created to encourage the restoration of this section of Panama City. Renovation costs are 100% tax deductible. Income from the sale or rental of the property is exempt for 10 years, and the property itself is exempt for 30.
Panama Investment Incentives & Protections
Banking & Currency
Panama uses the U.S. dollar as its currency and, as a result, has no exchange controls in place to limit the amount of currency that can be traded.
Law 8, 1944 – Tourism Investment
With as little as a $50,000 investment ($300,000 in metropolitan areas), those who wish to start a tourist-related business can enjoy a multitude of tax exemptions. These include import and property taxes, taxes relating to the use of airports or docks, and in some cases even income tax.
Bill 481 – Hotel Investments
This incentive is aimed mainly at hotel investments over $250,000 and include no tax on the import of building materials and tax exemptions on land and improvements for five years.
Law 58 – Outside Developments
This bill incentivizes the building or renovation of lodging facilities that are outside of the country’s Special Tourism Zones. Investment in areas such as the mountain regions or islands can result in tax-free importation of materials, equipment, and vehicles. A 20-year exemption on property taxes also applies.
Law 18 – Colon Free Zone
The Colon Free Zone is located at the Atlantic entrance to the Panama Canal. This free port is home to over 2,500 companies, employs over 28,000 people, and ships more than $16 billion each year. Companies operating within the zone, both foreign and domestic, are mostly free of taxes, provided that they meet a certain set of requirements. These include employing a minimum of 5 local workers, exporting a minimum of 60 percent of their merchandise, and maintaining certain reporting criteria.
Law 41, 2004 – Panama Pacifico
This area, formerly Howard Air Force Base, is another tax free zone established to attract certain categories of business. These include call centers, corporate headquarters, distribution and logistics centers, naval and aircraft goods and services, technology manufacturing, and the film industry. The site is also equipped with a One-Stop Shop that houses 12 governmental agencies under one roof for ease of conducting business, obtaining permits, etc.
Law 32, 1927 – Comprehensives and Simplified Regime of Free Zones
Passed in 2011, this act allows for the establishment of tax free zones anywhere in the country, provided that they do not interfere with the local ecosystem. To date, there are 14 free zones registered, nine of which are already operating.
Law 3 – Manufacturing Companies
Under this law, companies involved in the manufacturing and processing industry that export all of their products are exempt from direct taxes including import taxes on machinery and equipment.
Taxes
Panama is famous for its low taxes across the board. Income tax is only 7 percent after the first $9,000 and maxes out at only 27 percent. However, taxes only even apply to income from Panamanian sources. New home purchases are tax exempt for the first 20 years. Capital gains taxes are a low 10% and no inheritance tax exists.
Expats are falling in love with Belize. Here is a 10 picture discovery of the most interesting, if not the most popular spots in this tiny, Central American nation.
1. Barrier Reef
Belize is home to the second longest continuous barrier reef in the world. Here you will find some of the best snorkeling and scuba-diving sites in the world. It is lined with hundreds and hundreds of small islands, or cayes. Many are uninhabited, but others are home to developed vacation destinations such as the islands of Caye Caulker and Ambergris Caye.
Belize’s Barrier Reef is lined with hundreds and hundreds of small islands, or cayes.
2. The Atolls
Belize’s three mid-ocean atolls are arguably more spectacular than the barrier reef and its many cayes. Unique formations of small islands and reef surrounding a mid-ocean saltwater lagoon, atolls are an isolated and stunning phenomena. Belize has three of them: Turneffe Island, Lighthouse Reef, and Glover’s Reef. These atolls are very sparsely developed, and any visit here will be imbued with a sense of adventure, isolation, and romance.
Turneffe Island, Belize, one of three spectacular mid-ocean atolls.
3. Crooked Tree Wildlife Sanctuary
Located in northern Belize, this preserve is a swampy lowland home to over 250 resident species of birds and serves as a resting spot for scores of migratory species, and the principal nesting site of the endangered jabiru stork, the largest bird in the Americas. The best way to explore Crooked Tree is by paddling around the network of lagoons in a dugout canoe.
Crooked Tree Wildlife Sanctuary is home to the endangered jabiru stork.
4. Actun Tunichil Muknal
Actun Tunichil Muknal is a cave in the Tapir Mountain Nature Reserve near San Ignacio. A sacred site for the Mayans, the cave contains many examples of pottery, ceramics, and stoneware, as well as several sets of human sacrificial remains, one of which (known as the “Crystal Maiden”) has been almost entirely covered in limestone crystals by the natural processes of the cave.
Inside this cave lies the remains of Mayan human sacrifices.
5. Ambergris Caye
The island is the top tourist destination in Belize, and is the largest of several hundred islands in the northernmost waters of Belize. Most people get around Ambergris Caye by simply walking. There are many quality hotels in town, and many resorts on the island are less than a mile from the town of San Pedro, the only urbanized area on the island.
Ambergris Caye is the top tourist destination in Belize.
6. Caracol
Sitting high on the Vaca Plateau, 1650 ft. above sea level, Caracol is the largest Maya site in Belize. It was once one of the largest ancient Maya cities and at its peak around 650 AD it had an estimated population of about 150,000, more than twice as many people as Belize City has today. The largest pyramid in Caracol is Canaa or Sky Place, still the tallest man-made structure in all of Belize at 143 ft.
View from atop Vaca Plateau, Caracol, the largest Maya site in Belize.
7. Blue Hole
The Great Blue Hole is the most popular diving spot in Belize. This massive sinkhole under the water is near the Lighthouse Reef and creates a perfect circle of deep blue water. The deeper one dives into the Great Blue Hole, the clearer the water and the more breathtaking the scenery, as the array of bizarre stalactites and limestone formations become more complex and intense.
Blue Hole, Belize’s most popular diving spot.
8. Caves Branch River Tubing
Geologists recently discovered a vast subterranean network of Maya ceremonial caves. At the Nohoch Che’en Caves Branch Archaeological Reserve, guides will lead you across jungle pools to the caverns filled with artifacts like sacrificial skeletons. The spiritual underwater history lesson is a must-do.
Belize caves plus tubing, equals a must-do.
9. Mennonites
In the 1950s some 3,000 Mennonites emigrated to Belize, where they established communities in the Orange Walk and Cayo districts. Today, there are an estimated 8,000 Mennonites in Belize. They are primarily located in farming areas and have no hotels or tourist facilities, but the unexpected sight, on dusty rural roads, of pale-skin folks in old-fashion dress—the women in long plaid dresses and the men with suspenders and straw hats—in horse-pulled buggies will remind you of how diverse Belizean culture really is.
Belizean Mennonites embrace a simpler lifestyle.
10. Fly Fishing for Tarpon
The waters surrounding Ambergris Caye, Belize abound with fish and the island boasts some of the best fishing guides in the country. Tarpon are the largest, strongest, and most acrobatic of the Belize species. Even juvenile fish will put your angling skills to the test and strain your tackle beyond belief.
Belize offers up some of the best fishing spots in the Caribbean.
Photo Credit: fetus karate via Flickr
Sandwiched between Nicaragua and Colombia, between the Caribbean Sea and the Pacific Ocean, Panama and Costa Rica certainly have a lot in common. Situated in the heart of Central America, these two small nations are both rich in culture and scenic beauty, making them wildly popular tourist destinations, attracting people from all over the world each year.
Then what is it that makes Panama City, according to America Economia, a prime business location over San Jose, Costa Rica? While both cities were ranked relatively high on the list of “Best Cities for Business in Latin America”, with Panama ranking seventh, and San Jose twelfth, what exactly was it that allowed Panama City to jump those five extra spots?
What makes Panama so prime?
The answer lies in Panama’s economy, an economy prime for foreign businesses. Along with the fact that Panama has been a dollarized country for over 100 years, instantly making foreign investors feel more comfortable, Panama also has specific laws put in place to protect foreign investments.
A businessman himself, current President Ricardo Martinelli is behind many of the laws promoting foreign business and trade that have made Panama, economically, the fastest growing country in the Western Hemisphere.
Conducting business in another country can be a daunting task simply because you are working in a place with a different economic climate than your own. Yet while many countries tend to put up barriers, Panama has been working to demolish them. In Panama, foreign entrepreneurs are not only welcomed, but encouraged to purchase or open new businesses, and due to dollarization, Panama’s stable banking sector and USA-Panama free trade, foreign business owners will be more inclined to do so.
Panama has many advantages that make foreign businesses run exceptionally smooth. The Panama Canal, a 48 mile ship canal that connects the Atlantic Ocean to the Pacific Ocean, plays a vital role in regards to trade and global influx by allowing goods to be imported and exported at a significantly faster rate.
Near the Panama Canal entrance is the Panama Pacifico, a 1,400 hectare business ‘park’ built on what was once the United States Howard Air Force Base. Any business built within the park will be free from income taxes, import duties, real estate taxes, remittance tax, international calling tax, and dividend tax, making it an ideal spot.
Like Panama, Costa Rica’s official language is Spanish and much of their national revenue is fueled from trade and tourism. Unlike Panama, the national currency in Costa Rica is the colone, which gives Panama an immediate edge when it comes to conducting foreign business. Ranked twelfth on the list, which is still very respectable, the main reason Costa Rica fell short to its neighbor is because of its inaccessibility to foreign business in comparison.
Why not Costa Rica?
While Panama welcomes foreign business with open arms, Costa Rica tends to keep them at arm’s length. According to the Small Business Administration in the United States, only half of all businesses will survive five years. Unfortunately in Costa Rica, the success rate is even lower. Why exactly is this?
- Acquiring permanent residency in Costa Rica is difficult. In Costa Rica, unless your planned business is going to require more than $200,000 in capital investment, you won’t be getting residency. You, like most foreigners living in Costa Rica, will have to remain a “tourist” and leave the country periodically every 30 to 90 days to renew your visa. Of course to many, it is a small price to pay to reside in such a beautiful country.
- Starting a business in Costa Rica will be expensive and a little tedious. Gathering all of the necessary paperwork and permits together will take 160 days and will cost more than the average annual income.
- Once the business is established, it will also be expensive to run. As a direct result of the nation’s small population, and with no Panama Canal, foreign business owners can be expected to pay premium on things like imported foods, construction supplies, and technology as they are transported through the mountains.
At number seven and twelve on a list of forty-six cities, both Panama and Costa Rica have exceptional business climates for those considering opening a business in a breathtaking tropical environment. With thousands of tourists flocking to these cities each year to enjoy the luscious landscapes, exciting wildlife and Latin American culture, either city, according to America Economia, would be considered a wise selection. Yet between the two, Panama comes out on top. A dollarized country with a business-savvy President and laws tailored to promote foreign business and trade, Panama City is awarded the title of city with the best business climate.
Cuenca, Ecuador Named Top Expat Destination for 2013
The world’s top retirement spot? In truth, it depends on you. There are many appealing options for a new life in retirement as an expat, as many people are now looking for ways to stretch their dollars. It makes sense, living expenses can be cheaper, cultural experiences richer and the lifestyle more satisfying as an expat.
The top retirement spots for 2013 have a variety of cultural offerings, climates, and lifestyles. Each destination is desirable in its own way, but they all offer something increasingly hard to come by at home: A good quality of life for a reasonable price.
Here is a guide to the best places to retire overseas in 2013:
1. Ecuador
Living on $1,600 a month including rent isn’t unreasonable in a place like Cuenca, Ecuador. Buying a house or condo near the water could cost you less than a quarter of popular U.S. destinations of similar climate. When you make the move, Ecuador allows you to import your household goods duty-free, and with its new, simplified visa process, it’s no wonder Ecuador tops the list as a best-value retirement paradise.
But for many, the true draw is the perfect climate. The nation lies on the equator. The beaches are tropical, but up in the Andes, the weather is mild and spring-like year-round. Best bonus yet, it’s one of the best countries for an expat business start-up.
2. Panama
In Panama’s capital city you can have all the U.S. comforts of a big city, including outstanding healthcare, restaurants, and daily activities. On a monthly budget of $1,700 to $2,500 a month you could eat out regularly, have a housekeeper come in a few times a week, and enjoy movie dates a few times a month.
View of Panama City skyline, a top expat destination for 2013
Panama’s major draw is its Pensionado (pensioner) visa, where qualified retirees achieve residence status fairly quickly. The program entitles visa holders to discounts on medical treatment, dining, movies, and more. Most expats in Panama regret they didn’t come sooner, as many say they chose Panama for the friendly people…its rainforest…plentiful beaches and the choice of secluded or city living lifestyles.
In Panama it’s possible to put a toe in the Pacific after breakfast and in the Atlantic before dinner…on the same day. There are cloud forests for bird watching, such as the resplendent quetzal, and even orchid gazing, all in the same weekend.
3. Malaysia
Malaysia is Asia’s Panama. That is to say, this country is a regional and a global hub, for trade, for business, and for culture. Malaysia is a multi-ethnic and multi-cultural country which attracts many tourists annually.
Penang, Malaysia offers expats an affordable living under $2,000 a month in what is considered “luxury housing” in the states. Here, an expat can eat out often and enjoy all the things the city has to offer along with top notch medical care at an affordable price.
Malaysian expats feel the country has everything. Its weather is a tropical 82 F all year round and its beaches, islands, and jungles are pristine. It has some of the region’s best street food, great restaurants, bars, shopping malls, and movie theaters—and it’s all affordable.
4. Mexico
Mexico’s colorful and vibrant culture does rank high with expats who live here…look deeper and Mexico has much to offer. Mexico is an easy, convenient choice for many expats who are seeking a first-world country at bargain prices. No wonder a million or more expats make Mexico their home.
Today’s Mexico offers modern highways and airports, cable and satellite TV, Internet, and many other items expats enjoy at home. Want your “big” U.S. lifestyle abroad, you’ll get it in Mexico with an overall cost of living at about half of what you’d pay in the U.S. or Canada.
And one of Mexico’s biggest pluses is its sheer size and variety. If you want beach, Mexico has thousands of miles of it—chic resorts, sleepy beach towns, and everything in between. Prefer cool, mountain scenery? Mexico has that, too. More likely than not, whatever you’re looking for in a retirement destination you will find it in Mexico.
5. Costa Rica
Costa Rica is where you go to live the lush life. It is lush with nature—misty rain forests, extraordinary wildlife, active volcanoes, and fabulous beaches—as well as such comforting amenities as malls, supermarkets, restaurants, museums, and social clubs.
U.S. retirees have flocked here for years, drawn by its mild climate, prosperity, literacy rate, health care, and, significantly, stable government. Another plus: Costa Rica’s commitment to a thriving natural park system that is second to none in Latin America. This is as biodiverse a country as you’ll find anywhere. The country offers micro-climates, meaning you can fine-tune your weather by moving up and down the hills.
Though not the bargain it was a decade ago, Costa Rica continues to draw moderate-income retirees, who meet the country’s requirement of income of $1,000 per month from Social Security or a pension. Best part, residence is easy enough that just about anybody can do it. Residents are eligible to join the universal health-care system, known as Caja. The cost, based on income, can be as low as $49 a month. After that, care is free.
6. Nicaragua
Want a budget-friendly retirement destination? Think Nicaragua. Geographically, the nation is blessed with two long coastlines and two big lakes, plus volcanoes, highlands, rain forest, and rivers. In this manner, it has everything Costa Rica and Panama have, but it’s less discovered and developed and available to adventurers and eco-travelers at bargain rates.
Property values have fallen significantly in this country over the past several years, thanks to Ortega’s re-election and then the global recession. As a result, you can buy one of Granada’s classic Spanish-colonial haciendas for $50,000 or less. A couple could live comfortably in this city on a budget of $1,200 per month.
Best of all, its lower cost of living does not mean you have to sacrifice the quality of life, in fact, it’s possible to live in Nicaragua with even more luxuries than you were accustomed to, simply because the prices are so low.
Retired Expat Communities
All these destinations have large expat communities, so doing your research can put you among other people like you; with similar interests. Learning a foreign language will probably be a requirement; but again if you have a sense of adventure, and don’t want the typical cookie cutter retirement this could be something new and stimulating.
The Costa Rica 3 Count, where we bring you 3 stories that you shouldn’t miss.
How to open a bank account in Costa Rica as an expat.
1: How to Open a Bank Account in Costa Rica, (Without Losing your Cool)
First up: The rumors are true, setting up your first bank account in Costa Rica can be nightmare, but luckily, once that’s done, banking is pretty straightforward.
It’s best to check with the bank and know the requirements to set up an account, but most now require that an applicant have Costa Rican residency to open an account.
But generally ask for:
- Passport
- Residency documents
- Utility
- Letter of recommendation from a financial institution in your country
- Letter from your employer with the official stamp of the company (if employed)
- Reference letters from current account holders at the bank you are applying
2. What Type of Overseas Property Buyer Are You?
Next Up: Great news for those thinking about buying property in Costa Rica, the current combination of world property market, foreign currency rates, and economic factors are presenting unique opportunities.
If you have been looking at property for some time, or you have an overseas destination that you love and keep going back to, or even if you have considered retiring there one day, you will be happy to know, the timing is perfect.
3. 10 Things to Consider When Deciding to Rent or Buy as an Expat
Finally. Buying real estate in Costa Rica, or anyplace overseas, is fundamentally about diversification. When soon-to-be expats decide to make the move abroad, the first big question he or she often considers is where – but in reality this question should be: Is it best for me to buy my retirement residence overseas or rent?
San Jose, Costa Rica and Panama City are good examples, both offer expats lifestyle options, and neighborhoods just a mile or two away from each other can make for dramatically different living experiences. Buying before giving yourself a chance to understand this can mean the difference between loving your new life overseas and regretting it.
When IRA’s (Individual retirement accounts) were introduced in 1974, they seemed to be the dream shelter for reducing taxable income. The funds were handed over to a custodian who would typically invest in stocks and bonds that would increase the value of the IRA.
Since the average person earning a middle class wage is either wary or unskilled at increasing individual assets through stock market speculations, this custodial service felt like a safety net during the era of a robust economy.
All good things come to an end. Over the last few years, many IRA investors have felt the uncomfortable slump of mutual funds that vanished down the tube and bonds that sat around doing next to nothing.
Use your IRA to buy your dream home in paradise
Why Self-Directed IRA’s
Motivated by the uncertain market, there is a growing trend among IRA holders to switch from traditional IRA’s to self-directed IRA’s. Typically, IRA custodians place restrictions on what you, the investor, may or may not do with your funds. You may not invest in collectibles, such as antique furniture, stamps or artwork. You may not invest in life insurance.
Many traditional IRA custodians do not permit real estate investments unless it is held indirectly, such as in a real estate investment trust. The range of investments are much broader with a self-directed IRA.
The account owner must still go through a custodian or trustee, who ensures that all transactions are within the requirements of the IRS, but the holder takes charge of how the money is to be invested. Typical uses of self-directed IRA’s include mortgages, franchises, partnerships, private equity, and real estate.
Real Estate Investments
Real estate has become a hot topic. Under the terms, real estate may include both U.S. and international residential and commercial properties, raw land, farm land, property renovation, development, and rental income.
Even if you haven’t reached retirement age yet, you may use your IRA funds to purchase and rent out your valuable investment, with the proceeds rolling back to your IRA account, tax free.
Where the American Dream Failed
Foreign investment is really the best way to go. The financial advice of the U.S. real estate market today is to invest in rental units. As America falls deeper into debt, even rental units face a dubious future with increasing restrictions, code regulations, and insurance demands dwindling away at the profit income.
You could find yourself the proprietor of a trailer park, or an apartment complex, with clients that come and go, with no more regard for your property than for a second-hand car, and your retirement years spent straightening out quarrels, repairing faulty plumbing, and cleaning up the refuse others have left behind. Lawsuits are an endless headache for rental unit owners and property depreciation is always a dangerous possibility.
While the country that once invited in the poor and tired masses becomes the poor and tired masses, Latin America is on the fast track to growth. The IRA funds that you invested in a modest home to rent out until the day you no longer had to punch a clock could purchase twice the grace and beauty, along with fewer restrictions and more opportunities to enjoy the life of adventure you dreamed about having upon retiring.
Investing in Foreign Real Estate with a Self-Directed IRA
You can buy your dream property on the Caribbean outright if you have enough funds in your self-directed IRA LLC bank account. Purchasing outright means paying all the closing costs, along with any taxes, fees or insurance required to settle the deal.
If you don’t have enough, you can partnership with a family member, friend or a colleague, with the percentage paid according to the agreement of property ownership by your shared agreement.
Your options for what you do with your foreign investment are liberal. You can use undeveloped land to create a tourist attraction. You can make improvements on a developed piece and rent it, or simply decide this is where you wish to have your home, and rent it out until retirement.
Live Free
Your home is no longer your castle north of the border. Even if you own your property outright, you are restricted by regulations and zoning codes that tell you what you can and cannot have, and in some cases, even the color you paint your house.
The cost of living is so high, a few thousand dollars a month still puts many in the low income bracket. By investing in foreign property with your self-directed IRA, you can expect a higher standard of living and live free, with fewer restrictions on what you can do with your new home.
Affordable Cuenca, Ecuador
Thinking about making the move abroad and wondering where is the best location for a soon-to-be expat? Your answer might just be Ecuador, the newest hot spot destination for retirees and expats wanting the good life without the financial stress.
Ecuador is the world’s best place to retire overseas on a retirement budget. Here you can live better than you do in the U.S. for less money. The cost of living is low, and the cost of real estate is one of the lowest for Latin America. With monthly estimated living expenses ranging from $900 to $1,400, Ecuador surpasses Panama, Mexico, and Costa Rica.
1. Real Estate in Ecuador Is Affordable
If you want to call Ecuador home for good, the process of buying a house is straightforward. Real estate prices are still relatively low. Some expats find it is still possible to build new residential construction for under $100 per square foot. But remember, this is local construction… cement or red clay brick. There is almost no wood construction in Ecuador.
2. Getting Around Ecuador Is Cheap and Easy
Most expats find getting around Ecuador easy; most choose to ditch their cars and use public transportation or walk. Ecuador also has a good mass transit system. Quito, the nation’s capital, is well-equipped with buses and taxis, most of which are constantly available and cost an average of $1.00 per hour of travel.
3. Ecuador Offers Great Health Care
Most expats are pleasantly surprised with the medical system in Ecuador, especially the quality of care. Medical costs are one-tenth of what they are in the States and the hospitals are state-of-the-art and offer many healthcare options for expats.
4. Latin American Cuisine at Its Best
So how’s the food? One would be hard-pressed to go hungry in Ecuador for lack of options. In Quito and Guyaquil, you can get any type of food in the world; while outside of the city, local fruits and vegetables are in abundance along with chicken and pork. As one moves closer to the shore, the cuisine varies slightly. The same fresh fruit and vegetables are complemented by a huge variety of fresh fish.
5. American Culture
As much as an expat retiree may want to get away from it all, a little homesickness is inevitable from time to time. Ecuador’s English-speaking expats along with other English-speaking people and American franchises, is enough to ward off homesickness should it arise. Cuenca is a popular mountain town, which now has a few thousand English-speaking expats living there.
6. Ecuador’s Currency Is the U.S. Dollar
One thing to remember about Ecuador is that this country uses the U.S. dollar. For an American expat, this means it’s easier to understand what things really cost; it’s easier to keep track of your spending; and, very important, you avoid any currency-exchange risk. You may still have local inflation to contend with, but you won’t have to worry about that being compounded when the exchange rate goes against you.