Low cost of living and inexpensive properties in a growing economy.
Making an offshore investment shouldn’t be a daunting journey. Making an offshore investment in Central America has long been the perfect choice for those looking for an inexpensive property investment.
Discover what an offshore real estate investment can do for you and why Central America should be on your radar. For more information on making offshore investments, contact Alpen Partners below.
Why Invest in International Real Estate?
One of the biggest draws to buying international real estate is the diversification. According to Modern Portfolio Theory, diversification is one of the cornerstones of a successful portfolio. In fact, diverse portfolios outperform a concentrated one. By owning a large number of investments in more than one sector or asset class, investors can protect themselves from unsystematic risk, the risk that one encounters when investing in one particular company.
Another factor that attracts investors to foreign real estate is the opportunity to expand international options. Many real estate investments can lead to residency and, in some cases, a quicker road to citizenship. In rare cases, immediate citizenship is offered after a high enough investment in real estate. This is especially attractive for those looking to expatriate or for those who want to earn a second passport in order to extend the amount of visa-free travel that is possible. This can play a key role in offshore retirement or years of stress-free travel.
There are also a lot of tax benefits that come with investing in real estate offshore. In fact, it is one of the few ways that an American can legally keep some of their money offshore privately. When real estate is held directly in an investor’s name, as opposed to in a trust or LLC, the investment is not reportable.
One of the most important (if not THE most important) reasons investors choose to buy real estate internationally is to save their wealth abroad. By owning foreign real estate, an investor can keep their money outside of the reach of their local government. There are also greater returns in the real estate markets of other countries.
Why Central America?
The region known as Central America is a group of countries located at the southern tip of North America. Typically, the border of the region is considered Mexico to the north, Colombia to the southeast, the Caribbean Sea to the east, and the Pacific Ocean to the south. Sometimes, especially in cases when it comes to investment, Mexico is considered Central America since the processes of making foreign investments in the country are similar to those in the region.
Now is the best time to invest in Central America, especially in real estate. The political and economic climate have not been as strong as it is now in years. Factors like tourism and inexpensive real estate have drawn investors from all around the world, especially the United States.
Investors interested in Central America can take advantage of less strict tax laws, exchange rate advantages, and asset diversification. Experts are comparing the current market in Central America to that of the United States in the mid-1980s. The market is starting to pick up with around 150 publicly listed real estate companies trading roughly 1 billion dollars worth of real estate a week.
Many investors are also choosing Central America because of the growing expat community. The tropical beaches, warm weather, and culture are attracting people from all around the world. The low cost of living allows retirees and wealthy individuals to live with nearly no limits.
Where to Buy
There are certain pockets of Central America that are ideal for real estate investment.
Belize is emerging as a real player in the global real estate game. This small Central American country is drawing investors from all over the world, mostly from North America. The country is mostly English-speaking with easy access to healthcare.
Property prices are low and there are hefty tax benefits, allowing you to earn a healthy return or live in paradise inexpensively.
As one of the easiest countries for foreigners to buy property, there’s no question why many choose Panama as their investment destination. There are many different kinds of options for real estate investor in the country and residency is easy to obtain. Panama also has one of the fastest growing economies in the Western Hemisphere. Whether you are looking for returns or a new retirement home, Panama is a good choice.
Costa Rica has been a safe place for foreign investors to make their offshore purchase for years. The country has one of the most stable political and economic environments in the world. Expats and investors have flocked to this tropical destination for a long time.
The country has one of the largest expat communities in Central America with a high standard of living and a large tourist trade, making investment more attractive.
Many investors are wary to invest in Nicaragua due to some common misconceptions regarding safety and security. Attitudes are beginning to shift as investors are looking for inexpensive property. There are small expat communities, but the biggest draws to the Nicaraguan market is the low cost of living and rock-bottom property prices.
Your wealth is important. If you are serious about your life goals and financial planning, investments are probably important to you. Financial planning can involve many steps from tax optimization to asset protection. Different investments have different rules with different returns.
With the help of financial planning, you will be able to predict where you will be in the years to come by evaluating where you are currently, what sources of income you plan to have in the future, investments you plan to make, and your retirement plans.
Alpen Partners Wealth Management International AG, the sister company of Alpen Partners Wealth Management AG, is now a registered investment advisor with the U.S. Securities and Exchange Commission (SEC). Together with our partner Swiss private banks, our company can now offer the full Swiss private banking experience to American clients, both resident and non-resident.