LIFE BEYOND FIRST CLASS
FINANCE
PARADISE
PAYDAY
Discover the top four lucrative Latin American real estate investments offering promising returns and a blend of idyllic lifestyles, meticulously curated to guide investors towards successful portfolio expansion.
RONAN MCMAHON
Why would anyone buy real estate in Latin America? Twenty years ago, that was the standard response to such an idea. Today, the same notion is likely to inspire intrigue, or even support. What happened in between? Put simply, investing in Latin American real estate became mainstream. Somewhere along the line, the collective market noticed that there was a lot of money to be had down south—and money-making ideas never remain on the fringe.
That is to say, the secret is out. Latin American real estate is, by now, a well-known, tried-and-tested investment, which could offer handsome returns to those who know what to look for. And while any real estate investment requires thorough research and due diligence in every respect, the overview below offers an introductory glance at the four best places to invest in Latin American real estate.
Panama
Much is happening in the small nation of Panama, and it’s all good news for real estate investors. An already stable market is growing stronger by the day as the Panamanian middle class continues to swell, buying city homes and beach houses on their way up the ladder. Expatriates from Europe and North America catalyze this growth, naturally. And then there are buyers from more tumultuous economies in South America, who see politically secure, U.S. dollar-backed Panama as a haven for investment. Collectively, this makes for steady growth in demand, which translates to a reliable upward trend in property value.
Panama has much to choose from. The nation’s capital, Panama City, built on the Pacific end of the Panama Canal, provides a modern, cosmopolitan environment, with all the luxuries that entails. For those in search of a tropical experience, the Pacific Riviera offers gorgeous beaches not far removed from the conveniences of the city. Toward Costa Rica in the west, Chiriqui is nestled among stunning mountains and boasts a thriving expat community. Whatever their conditions may be, anyone searching for the ideal location in Panama is unlikely to be disappointed.
Costa Rica
Costa Rica is paradise on earth, a fact which the market reflects. Its immense biodiversity, remarkable landscapes, and picturesque beaches attract $4 billion worth of tourism every year. It was, in many ways, the frontier of ecotourism and even of tropical expatriatism. Beyond the natural beauty, Costa Rica today offers everything an expat could ask for. And yet, in spite of the ever-present, ever-growing demand, the supply of high-quality real estate remains limited. For investors, that means high-value properties with a high likelihood of growth in the years to come. The annual influx of tourists also presents an opportunity for rental income, of course.
With so many beautiful regions, it can be difficult to decide on a single area within Costa Rica. The northwestern coast is especially popular among expats and tourists—as well as investors—for its idyllic beaches, unique coastal towns, and an endless range of outdoor activities to choose from year-round. Add unto that the accessibility of an international airport, and it is no wonder that the real estate market there is strong. For those seeking a less populous region with an equally bright future, the southern zone is another destination to consider. Once remote and inaccessible, the stunning, naturally-preserved southern zone is now a mere three-hour drive from San José. It has, however, maintained its laid-back nature due to much of the land there being protected, meaning that the growing real estate market is somewhat shielded from the burnout which is so common in tourist destinations.
Mexico
A nation with international cities, tropical beaches, and a shared border with the U.S., it is not difficult to see why Mexico is any real estate investor’s dream. The convenience of regular, accessible, low-cost transport to the United States simply cannot be matched elsewhere in Latin America, especially for U.S. expatriates. That fact, combined with its natural and cultural charms, has continued to fuel Mexico’s popularity among tourists and expats alike. As a result, the market is ripe for both radical capital gains and steady rental income.
Out of Mexico’s many attractive regions, the two areas that stand out above the rest are Los Cabos, the tip of the Baja California Peninsula where striking desert landscapes meet the Pacific, and the Riviera Maya, a sprawling stretch of Caribbean coastline in the northeast. These regions in particular attract the most tourists and expats, which means constant rental demand and ever-soaring property prices. Los Cabos has an especially limited supply of affordable, high-quality condos, further magnifying the incline of property values. With the added promise of a paradisal lifestyle, Los Cabos and the Riviera Maya are certainly among the most promising prospects for any investor.
Dominican Republic
Little needs to be said about the Caribbean; its islands are the archetype of tropical living, and for good reason. As a consequence, however, most Caribbean nations have real estate markets that have long plateaued at unreasonably high prices—and that for overcrowded, overdeveloped resort towns. The Dominican Republic differs in that aspect. There is still affordable living to be had here, and it lacks none of the natural beauty boasted by its neighbors. It’s just over two hours’ flight from Miami, and the nation is seeing substantial investment poured into the private healthcare sector. With all that in mind, it’s not unreasonable to think that the Dominican Republic could see much value created in the next few decades.
Most tourists and expats who come to the Dominican Republic head to Santo Domingo or Punta Cana. These regions offer large cities with high-rise hotels and beach resorts. As with any tourist cities, there is a lot of money in these locations, and property values are likely to increase with time. There are also other options, however, which have resisted the overly developmental mindset that affects so much of the Caribbean. One such place is Las Terrenas, a quaint coastal town less than two hours from Santo Domingo. With a fascinating mixture of European and local culture, as well as strict regulations on development, this location has remained a picturesque home for boutique stores and quiet vacations. For investors wary of overdeveloped, overpriced tourist destinations, Las Terrenas is not a prospect to be overlooked.
Conclusion
Latin America is by now a region trusted by real estate investors worldwide, and the locations listed above demonstrate exactly why. From paradise to paradise, the promise of an idyllic, often affordable lifestyle upon snow-white beaches and turquoise waters means that there is often much property value to be had. And while Latin America may no longer offer the relatively high-risk, high-reward real estate investments of the early 2000s, it’s a reasonable bet for anyone seeking steady growth in one of the world’s most beautiful corners—granted they know what to look for. The four places listed here are the ideal starting point for precisely such an investor.
Ronan McMahon is the editor of Real Estate Trend Alert (RETA), Your Overseas Dream Home, and a contributing editor to International Living, the top source for all things living overseas. He's the author of three books on international real estate and has participated in more than $2 billion in real estate transactions over the past two decades. More info at www.ronanmcmahon.com.