The Compass Report

Trump sues developer over unfinished Mexico condos

2009-05-29T06:02:00-07:00

Trump sues developer over unfinished Mexico condos

The Associated Press

Posted: 04/09/2009 09:34:07 PM PDT

Updated: 04/09/2009 09:34:08 PM PDT

LOS ANGELES—Donald Trump has filed a federal lawsuit against a Los Angeles developer that paid to use his name on a condominium project in Mexico that has not been built.

The real estate tycoon filed the lawsuit Thursday in New York against Irongate Wilshire LLC. The filing comes one month after dozens of luxury condo buyers sued Trump and the developer to get them to return $32 million in down payments.

Trump's $40 million lawsuit accuses Irongate principals Jason Grosfeld and Adam Fisher of failing to build the five-star resort near Tijuana, where units sold for $275,000 to $3 million.

Trump says he withdrew from the project in February because Irongate ran out of money. Last month, the developer said it would not complete the Baja development.

Grosfeld and Fisher could not be reached for comment.

Real Estate in Ecuador: The Lowdown on Low Cost Beachfront Property

2009-05-27T06:54:00-07:00

Beachfront property in Ecuador can still be bought for less than $40,000. But at the risk of this sounding like a sales pitch, it is in limited supply.

Ecuador is an amazing, peaceful place with beautiful beaches, warm weather and really inexpensive beachfront bargains. With each passing year as global warming sets in, the hurricanes seem to be getting stronger. They are turning into destructive forces beyond human containment. This is why you should consider buying property out of hurricane paths.

Unlike the Dominican Republic, Puerto Rico, Mexico and Costa Rica, Ecuador is completely out of hurricane paths. Ecuador faces the Pacific Ocean sheltered from the hurricanes that hit Central America and the Caribbean.

Bargain basement prices and increased exposure will light the fuse and turn Ecuador in to the next hotspot on the world´s beachfront real estate scene. But if you don’t know what you are doing, you could easily get duped.

So, if Ecuador is such a great place why are the prices so low?

Ecuadorians don’t value beach houses the same way that Americans and Europeans do. They like to go to the beach twice a year during school breaks, stay in nice hotels, party and then go home to their big cities.

It’s a fact the locals don’t have the money to push prices upward fast. On top of this, the lack of credit available for housing purchases in Ecuador is another reason why the real estate prices have not jumped in recent years. Financing your home with an Ecuadorian mortgage is possible, even for foreigners, but very expensive. With prices so low, most expats prefer to buy in cash.

The real price-pushers (we Americans) have focused on beachfront areas closer to home. But Ecuador is elusively close, only a few hours by air from Miami. Other places on the coast still lack basic infrastructure, especially for retired expats. For example, golf courses are almost non-existent.

Currently, the coast is dotted with Europeans who have bought in, with relatively few Americans. Some feel the lack of Americans has actually deterred other Americans from buying in. Generally speaking, Americans like to go where there is already a solid expat community whereas Europeans are actually drawn to places where there are few other Europeans.

Real estate prices in Ecuador have risen slowly since 2000. It’s hard to tell exactly because there is no Multiple Listing Service, but some local real estate experts predict rises of 15% a year while others say prices have stayed about the same! It depends who you ask, expatriate or local. From my experience mainly working with local experts, prices have stayed about the same in recent years except for a few select areas.

No major leaps have been seen, as was seen in the US in 2003-2005. This almost dormant market may be attributed to the relative instability of the local economy. In 2000, the Ecuadorian currency plummeted in value, banks closed, people lost their savings, and the government switched to the American dollar as their currency. But the opportunity for rapid growth is there due to the limited supply. The Ecuadorian coast is not that big and large sections of it are uninhabitable due to national parks or swamps.

Ecuador Tourist Beach

The Southern Coast

This is where the action is, or where it could be shortly. The biggest winners in an investment are always the first ones in. We know one thing for sure looking at Costa Rica. Beach front property doesn’t go down in value.

By southern coast I am referring to the area of Ecuador from around the city of Manta down to the city of Guayaquil. The locals call this area “La Ruta del Sol,” while foreigners call it “a good investment.” The prices have slumped on the southern coast after what happened locally in November and December of 2007.

Basically, Ecuador is divided into provinces like the United States is divided by states. Up until December of last year, the southern coast was in the same province as the country’s largest city, Guayaquil. There was a referendum and a vote, and the locals opted out of the province, creating their own separate province called Santa Elena.

This doesn’t seem like much, but it’s a huge blow (in the short term) to the coastal real estate values and businesses. Anyone familiar with the area knows that the region lives on tourism, and 80% of the habitual tourists come from Guayaquil. When the people on the coast broke away, they created a huge resentment in the people of Guayaquil, causing the “Guayaquileños” to start thinking about alternative destinations in Ecuador for travel and buying real estate.

The move by the coastal people was extremely short-sighted in that not only did they overlook where they get their main revenue stream, but also where they get most of their public funding from. Most of the tax dollars that are spent on the coast came from Guayaquil.

Now reverting back to the effect on real estate, a large percentage of people who own property on the southern coast are from Guayaquil. With no people from Guayaquil buying and some getting out, it makes now an excellent time to buy.

But why Ecuador?

The falling dollar is another big concern for Americans abroad. Luckily, in Ecuador they use the American dollar as their official currency, so we don’t have to deal with exchange rates and currency risk. As the dollar falls, in Ecuador you won’t feel the pinch. In addition, Ecuador has amazing growth potential, especially on the coast. As the prices of Costa Rica, Panama and Nicaragua soar, people will start to look elsewhere for their dream beach house.

Ecuador Rugs

Where is the natural next place to look?
South America.

But let’s take a quick look at the other beachfront options available in South America.
As soon as I crossed the Ecuadorian-Peruvian border, I could sense the misery in the air. The Peruvian coast from top to bottom is one big, undeveloped desert with trash blowing in the wind. Simple things like running water can be hard to come by. There are also major title issues that make it risky to buy in Peru.

Chile is beautiful, but not tropical. The prices are high, around US levels as well. Argentina is not tropical either and is really far from home, as is Uruguay.
Brazil is gorgeous, but is expensive now with the falling dollar.
Colombia is a wonderful place to visit, but with rebels still in the countryside, why would you buy there? Especially, when you can rent so cheaply.
Your other South American beach front option is Venezuela, where Hugo Chavez is currently giving unoccupied property to homeless people, all the while promoting an anti-American rhetoric amongst his people.

Thus, leaving Ecuador as the first place you should consider in South America when looking for beachfront property. Ecuador is what Costa Rica was in the early 90’s…a little rough around the edges, but off the beaten track and beautiful.

Unlike Thailand and other Asian countries, in Ecuador you can easily own property in your own name and have all the rights that a local has. Foreign investment is not only welcome, it is encouraged.

The people of Ecuador love foreigners, and everyone who comes feels welcome. Of course there are some bad apples like everywhere, but it is common to be invited to someone’s dinner table soon after meeting them.

Ecuadorian Spanish is some of the clearest, slowest spoken arguably in all of South America, making Ecuador a great place to learn Spanish as a second language. And English is becoming more widely spoken with each passing year. The weather is about the same all year around. On the beach, there is always a nice breeze off the ocean and the weather is pleasant, in the 80s, similar to Hawaii. On some parts of the coast the Ocean is as still as a lake, while in other parts the waves are big enough for some radical surfing. Whale watching is another popular activity during September and October.

On top of everything, Ecuador is still only a three and a half to four hour flight from Miami. By air it is only about one hour from Panama.

Political Climate

Ecuador is a place of many faces. To a tourist, the place looks laid back and peaceful, but if you pick up the newspaper there is always something interesting going on. Just last year in 2007 Ecuador created a new “congress” because the people thought the existing one was too corrupt. In 2005 there was a coup that overthrew the president. Every few years the governments and constitution seem to change.

But all of this happens with relatively little affect on daily life, property rights or the real estate market. Especially as a tourist, you won’t even realize anything is going on.
The current president is a lively fellow, who supposedly sides with Chavez, but Ecuador is way too Americanized and capitalist to become anything close to another Venezuela. The president’s political views are enough to keep some people away, but they shouldn’t do.

Park Boulevard Guayaquil

Frequently Asked Questions

Can foreigners legally buy and own property in Ecuador?

Yes, it is legal for foreigners to own property in their own name in Ecuador. You can enter Ecuador on a tourist visa, and even purchase a home with that same visa.

Do I need to apply for a visa before I get to Ecuador?

No, you do not need to solicit a tourist visa before you get to Ecuador. Upon arrival, you just show your passport and they stamp it, granting you from 60-90 days to stay in Ecuador as a tourist (the duration depends on the mood the official is in.)

After purchase, how do I get a resident visa?

The process is very simple. Upon purchasing a home or land worth at least $25,000, you will be considered an investor in the country and after completing the necessary paperwork with a local attorney, you will be granted a “resident visa.”

The exact requirements for a resident visa constantly vary, but not much more is needed than your passport, a medical exam and proof of purchase. Of course this process should be completed with a local attorney. In addition to your resident visa, other visas are available to you. A work visa can be had easily for around $150 and a local sponsor.

A student visa can be had with the enrollment paperwork provided to you by a University or language school. A “working transient” visa can be had with a local sponsor and acts like a work visa, but with fewer requirements. (I have used this visa. It is very easy to get.)
Lastly, something you won’t read about in your guidebook, but which often happens, is overstaying your tourist visa. Ecuador is not very strict on it, and many foreigners do it. All you have to do is pay a fine upon exit of the country around $200. All other options should be considered before this one, however. It is always best and safest to stay legal.
You can find local lawyers easily upon arrival or online on the www.paginasamarillas.com website.

How are the conditions of the roads?

On the southern coast from Salinas up to Olon there is a new, freshly paved road very pleasant for travel. The roads on the southern coast (south of Manta) are great. The roads on the northern coast from Manta northward are a work in progress. They are useable but not comfortable. Some areas are better than others, but new roads are currently being paved around the particularly problematic areas around Bahia de Caraguez.

How are Americans received?

In short, Americans are received very well. Many Ecuadorians have close family members in the US working, and thus feel a close tie to the US. People have mixed feelings about the American government and president, but towards the people nothing but respect and acceptance.

Are there any prevalent tropical diseases?

No. There are no diseases that can’t be found in the US as well. No special shots or vaccinations are needed before coming to Ecuador. However, in the far eastern part of Ecuador the Amazon jungle begins. Before entering any jungle (including the one in Eastern Ecuador) you want to be sure you have your yellow fever vaccination and pills to protect you from Malaria. However, on the coast you won’t need to take any special precautions.

What leisure activities are available on the coast and inland?

Within a tiny area about the size of Nevada, you have access to many different environments. On the coast, there are beaches great for surfing, while others are calmer making them great for swimming, sailing and ocean kayaking. Snorkeling and scuba diving are popular activities in a few select spots as well. Hand gliding is popular off the cliffs of Crucita. In Salinas and Manta you can observe whales up close from June through September.

Many hiking trails abound in the regions national parks. Further inland you will encounter the enormous Andes Mountains. Within these mountains are a wealth of rafting, climbing, biking and camping opportunities.

Further east you have the Amazon rainforest, where you can visit with indigenous communities, bird watch or flower gaze. The only sports that aren’t available in Ecuador as of yet are winter or snow related sports due to the climate. Another sport not widely available in Ecuador as of yet is golf.

How good is product availability?

There is plenty of “inventory” available as of June/July 2008. This could change at any time. Both houses and land are available, and at very inexpensive prices. If you are going to buy an existing house, be sure to thoroughly inspect it. Many Ecuadorians build their houses with less attention to detail than we command in the US.

As well, many Ecuadorians pack their houses full of people which could cause wear and tear, even on a newer house. Check specifically for uneven tile and cracks in the walls before purchasing.

How is the basic standard of infrastructure, especially in terms of utilities like electricity, water, phone and gas?

Depends on where you are on the coast.

In the more developed areas of the coast, especially south of Manta, all services are available and all that needs to be done is call up the local service companies and have them connected to your property. Some people in remote areas of the northern coast around Esmeraldas have their own generators, just to be safe.

Many people on the coast have their own wells dug to help preserve the environment and save on water bills. To get these services installed in your house you will need to make a request for installation at the corresponding municipal office. If you are located somewhere along the existing network, installation is immediate, if not, a delay could be seen.

Is there an active expat community?

In short, not really. Ecuador is still an off-the-beaten-track destination that has attracted, at least to date, the kinds of people that want to get away from their home cultures and experience new ones. In many places of Ecuador, you could go days or weeks without seeing another foreigner. To give you an idea, many of the expats that are already down here are the kind that speak Spanish. However, Expats in Ecuador are welcoming of other expats.

A few scams to avoid
You will notice that land and houses just one or two blocks up from the ocean can be had very cheaply, even less than the headline price stated in this article of $40,000. Do not just buy land and sit on it. In Ecuador, like most of Latin America, if the land is not in use, someone else could come “squat” on it, build, and claim it as their own. It doesn’t matter if it is legal or not, it happens. If you buy land, start building on it immediately.

Try to be present when constructing your house if possible. If you are not around, you may have delays and cost overruns. The fact remains in Ecuador many construction workers will steal materials and slack off if you are not around to apply a little pressure and enforce the deadlines.

Where to buy and current prices
There are dozens of options, but here are a few to get you started. Your adventure in Ecuador will probably start in Guayaquil, the largest city in Ecuador on the southern tip of the southern coast. It is a loud, smoggy, typical port town with attitude in the mold of Naples, Italy. There is no beach nearby.

Salinas is a resort town on the southern coast that fills up during local vacations, but is empty the rest of the year.

A great place to start your search is around the small town of Ballenita. This is the area that local experts expect to see boom the soonest. The water is calm and clear, and the sun always seems to shine. It is not too hot either, due to the soothing winds blowing off the ocean. The beaches here will remind you of the beaches around southern California, golden sand with houses on small cliffs overlooking the sea.

To give you an idea of the prices, there is a plot of beachfront land available (1,200 square meters or 12,912 square feet) in Ballenita listed at $45,000 as of June, 2008.
In La Milina on the southern coast, there is another plot of land available (250 square meters or 2,690 square feet) with an ocean view for $22,000 as of June 2008.
In another beach town on the southern coast, Playas, there is a listing in June of 2008 for a 2,690 square foot house (2 levels, two bedrooms, one bath, kitchen, garage) one block from the beach for $22,000 as of June 2008.

Another hto spot to look at is Olon. Olon is a tiny city right next to the most popular spot in Ecuador for foreigners, Montanita. Montanita is a surf town full of foreign hippies and backpackers. Montanita could be a great place to buy if you have always wanted to own your own guest house. Olon is quiet with an excellent, wide beach. It is often cloudy here though for some reason.

Arguably the most beautiful beaches of Ecuador are found in “Los Frailes” close to the national park “Machilla.” Some places may be restricted to real estate development due to the proximity of the park, but some lots are available for purchase.

- EFAM

Japanese Real Estate: Weakened by the Recession

2009-05-25T06:22:00-07:00

Japan is suffering from the global recession more than most countries. The economic meltdown has been painful for the export-dependent country. Its economy is contracting at a speed that has not been seen during the past three decades. The country is desperately trying to limit the fallout and to resuscitate its weak economy, which is the second biggest in the world after the United States.

In a bid to push back against the recession and to create jobs, Japan's capital city, Tokyo, is tripling the number of public works projects, according to the Washington Post. The city has taken the opportunity to give itself a face lift, one the

well-maintained city really doesn't need. It has employed jobless men and women to work on roads and parks to stave of the scourge of unemployment. The rest of the country is trying to decide whether to follow suit.

Japanese real estate

In the 1990's, when the Japanese economic bubble popped, property prices plummeted and reached rock-bottom fast. The country's real estate market has yet to see the incredibly high 1980's prices, and probably never will in the near future. Now that the credit crisis and the global economic recession have reached Japanese shores, the real estate sector is in for another rough ride.

It is too bad too because the property market had started showing signs of health over the past few years. Tokyo, Japan's largest city, even made it on Forbes' 2008 top ten places to invest in real estate — along with some of the world's other high profile cities such as New York and London. When the current global recession hit, it was just as the average Japanese became more comfortable with the idea of investing in real estate again. As the crisis took over and credit dried up, Real Estate Investment Trusts (REIT's) stopped purchasing, according to Shareswatch, an Australian finance news blog. Some even went bankrupt while others tried to get rid of part of their real estate portfolio.

Since then, growth in the property market has ground to a near halt. Vacancy rates for the office sector in Tokyo, Osaka, and Nagoya, Japan's three largest real estate markets, have began creeping up, according to CB Richard Ellis (CBRE), an international real estate service company. While the vacancy increases in Tokyo were on the low side and in Osaka insignificant, Nagoya saw its rate rise to 9.2 percent, the highest since 1992.

As for the residential sector, recent data released by the country's Real Estate Economic Institute showed that new condo offerings in February dropped by 27.5 percent in Tokyo. The new figures maintained a downward trend that has thus far lasted for a year and half, according to Japan Economy and News Blog. However, the average new condo price rose by 1.2 percent and out of the 2,509 units put up for sale in February, 1,548 sold within the month. Osaka's numbers look worse than Tokyo's, with 30.5 percent drop in new condo offers when compared to a year ago in February. The average price for a new condominium slid by 3.4 percent from last year. Out of 1,548 condos put up for sale in February, 853 sold within the month.

Looking ahead

Japanese real estate will recover along with its economy. The question is how well will it ride out the recession and how fast will it rebound afterwards. Since the economy is export based, recovery has to begin and take a hold in other countries, notably the U.S., before it reaches Japan. This means it will take longer for the Japanese economy to get back on its feet. Then, the real estate sector should follow suit.

by:

Yemisrach Kifle

Developer's resort dream turns to nightmare

2009-05-22T06:18:00-07:00

EL GOLFO DE SANTA CLARA, MEXICO - Glenn Taylor stands on the beach, feet buried in sand, watching pelicans dive into the blue waters of the Gulf of California.

"I can't think of a more beautiful place," the Yuma developer says.

The setting, a rustic fishing village about 90 minutes south of Yuma, is undeniably idyllic. And Taylor seems particularly proud of his vision for this sun-splashed shoreline: a resort hotel, golf course and about 600 ocean-view homes.

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It would be a perfect marriage of American capital and Mexican real estate, he says, creating a $75 million development.

But, like many investors tempted south of the border, Taylor has seen his dream dashed by a legal battle over land. He's been threatened by stick-wielding squatters, victimized by vandals, spurned by Mexican police, courts and politicians.

Taylor, 59, says the squatters represent Ejido Golfo de Santa Clara, a cooperative of local shrimp fishermen. Under Mexican land-reform programs, poor farmers and other workers throughout the nation were granted communal tracts of property for their homes and sustenance.

There are about 28,000 ejidos in Mexico today, controlling half of the nation's land mass and most of its pristine beaches. Members do not own the land, but they have exclusive right to its use. They may sell the real estate only if they complete an elaborate legal process. As a result, foreign investors have had chronic problems related to communal lands, compounded by the fact that ejidos are politically potent.

Mexico tourism officials and real-estate promoters say that property investments are safe when done correctly and that only a handful of transactions turn out to be scandalous. Still, they admit, such controversies damage economies and reputations at the worst possible time - during a recession compounded by fears about border violence.

Taylor points to a vandalized RV on his beach, the only development after five years of futile dealings with politicians, police and courts.

"If there's anyone to be held responsible, it's the Mexican government," he says. "They know what's going on, and they won't do anything about it."

Negotiations begin

It began in 2004 when Taylor drove south looking for a Mexican beach house.

Instead of buying a casita, Taylor wound up forming an investment group, El Golfo Properties Inc., to buy 269 acres, much of it between the main street and the Gulf of California.

Taylor says the property, with an old restaurant and some bungalows, was appraised at $300,000. He negotiated for a year with Sergio Gutierrez Gomez Sr., an agent representing private landowners. The final deal: Gutierrez's group was to get $100,000 up front, plus 20 percent of gross revenues.

A veteran developer, Taylor did not go into the purchase blindly. He obtained title insurance and put the land in a bank trust, following Mexican laws.

Surveyors, architects and landscapers were hired to design the resort. On Labor Day weekend in 2005, Taylor began posting development signs, only to be confronted by about 40 angry locals.

"They told me, 'You're going to take down these signs and stop what you're doing, or we'll do it for you,' " Taylor recalls. "I called police. They wouldn't do anything."

Silvia Terrazas, a Mexican real-estate consultant who successfully acquired ejido property near El Golfo, says purchasers often wind up with no land after making large down payments. "There are a lot of problems with ejido land," she says. "There's a lot of fraud."

Ejido Golfo de Santa Clara has 20 members who never owned the nearly 2,000 acres of disputed seashore. Manuel Lopez, the group's president, says his cooperative was cheated by the government in 1972 when boundaries were drawn, with the beachfront going to a neighborhood collective known as Colonia Melchor Ocampo.

Ejido members sued for possession of the land. The complaint bounced through Mexico's justice system for 16 years before the Supreme Court ruled against ejido members in 1998.

Lopez contends the government is obliged to compensate ejidatarios for land they did not receive. Until that happens, he adds, members won't allow anyone else to use the beach.

"We accept the court decision, but we're still fighting it," Lopez says. "Fishermen have a right to exist, too."

Appeals to officials

Taylor decided to give up, figuring he could collect on his title insurance. But the insurance company rejected his claim because there is no dispute that Taylor owns the land - he just can't do anything with it because of the ejidatarios.

Taylor and a neighboring U.S. landowner wrote letters to Mexico's president as well as to countless other authorities on both sides of the border.

In summer 2007, Sonoran Gov. Eduardo Bours assigned a top aide, Oscar Lopez Vucovich, to resolve the El Golfo conflict.

Finally, in May, Vucovich proposed a solution: Taylor and other landowners would grant Vucovich authority to sell the entire beach, with proceeds being shared.

At the time, an 83-mile highway had just been completed linking El Golfo to Puerto Peñasco, dramatically increasing the value of real estate. Taylor says some of Mexico's most powerful economic and political figures were vying to buy up the coast. Yet the proposed deal contained no guarantee that American owners would get a fair return.

Taylor says he rejected the proposal, only to have Vucovich obtain authorization from Gutierrez, who negotiated the sale of the property to Taylor and whose group no longer owned the land.

The pact acknowledged Colonia Melchor Ocampo as rightful owner of disputed lands but gave ejidatarios a third of the money when those properties were sold.

Taylor says there was just one problem: He did not agree to anything. "We've been in court ever since," he adds.

Gutierrez could not be reached for comment.

Vucovich and Sonora's tourism director did not respond to interview requests.

"It's a black eye for Mexico," says Mitch Creekmore, Taylor's agent at Stewart Title Guaranty Co. "A pathetic situation."

Taylor's group has invested $850,000.

"There's too much money in it to just walk away," he says. So he tried again for a resolution, meeting with Lopez, the ejido president, who says that Taylor isn't the first to buy the property only to be scared off.

Lopez explains how to persuade his members: "If you come with a dollar in front of you, that's what they like. People want to know how much they're going to get."

- Arizona Republic

As tickets to Europe drop in price, fliers consider exchanges

2009-05-20T06:23:00-07:00

Travelers who've already bought their tickets for summer or fall flights to Europe could be eligible for big refunds now that carriers, worried about weak business travel demand and sagging revenue, are cutting prices dramatically.

There are a couple of catches.

The refunds are paid in vouchers for future travel, not in cash. And the amount will be reduced by exchange fees of $200 to $250 that the airlines charge for redoing the tickets.

Still, the potential savings are big for travelers who exchange higher-price tickets for the cheaper ones now being offered.

For example: If you bought a summer round-trip ticket for San Francisco to London on Jan. 5 for $1,418, that same ticket today would cost you $818, a difference of $600. Even after deducting the $250 fee for exchanging the ticket, you would get a voucher for $350 in future travel.

"You'd be a fool not to go back to the airline and (exchange) your ticket for the same flight on the same day," says Tom Parsons, CEO of BestFares.com. "If you don't, you're leaving hundreds of dollars on the table."

The only reason not to do it, Parsons says, would be to gamble that the airlines lower their prices even further in the weeks ahead.

Parsons strongly suggests consumers hold off buying tickets for flights to Europe after Oct. 26 because, he says, "We expect these airfares will be cut by another 25% to 40% sometime in the very near future."

Fares have been falling because demand for international travel has been extraordinarily weak. Consolidated data from the first quarter isn't yet available. But the four biggest U.S. carriers in international markets, Delta (DAL), United (UAUA), American (AMR) and Continental (CAL), individually reported declines in international passenger traffic of 8.3%, 18.3%, 10.8% and 7.5%, respectively.

In most cases, the decline in traffic inside the USA was even larger in the first three months. But the airlines lose more money from a reduction in international travel because it's comprised of more business passengers, who traditionally pay more for seats.

To fill seats, the airlines have stepped up their sales to attract bargain-hunting leisure travelers.

The refund bargains are available for many flights to Europe because some international air tariff rules let passengers exchange a purchased ticket for a lower-price fare subsequently offered for the same day.

Refunds aren't available on domestic flights and some international flights because of different tariff rules.

- USA Today

The Advantages and Disadvantages of Buying International Real Estate

2009-05-18T06:20:00-07:00

As more people in the U.S. become discouraged with falling real estate values, a faltering economy and higher taxes it is reasonable to surmise that the increasing trend of U.S. citizens purchasing property in foreign countries will continue. Certainly, there are many great opportunities available for the buyer of foreign real estate, however, it is extremely important that the investor performs the necessary due diligence and research before deciding on a country and a property. A short article of this scope could never cover all of the intricacies of purchasing foreign real estate but I will try to cover some main issues to consider along with a few of the advantages and potential pitfalls.

Advantages of Buying Foreign Real Estate

Tax Havens. Many real estate owners in the U.S. have been slammed with higher property tax bills because of the real estate bubble that pushed property values. Unfortunately, when prices fell, real estate taxes didn’t fall as quickly. Many real estate owners are now paying taxes on assessed real estate values that don’t accurately reflect the market value of the property. Thankfully, there are actually many places in the world to invest where there are no property taxes at all. One of these places is the country of Ecuador. Many people will find it hard to believe but a U.S. citizen can actually travel to Ecuador and legally purchase an investment home and not pay any annual real estate tax at all.
Lower Cost of Ownership. Many property owners in the U.S. have found that it can be extremely expensive to properly maintain their investment or residential real estate. This is primarily due to the high prices of labor in the U.S. Many countries around the world have a surplus of highly qualified construction workers who are paid wages lower than here in the U.S.
More for the Money. Even though the U.S. Dollar has a lot of value during the last five years there are still many countries in the world where the investor can buy more with their U.S. dollars than at home. Researching exchange rates and local real estate prices is key to finding a suitable place to invest.

Potential Pitfalls of Buying Foreign Real Estate

Political Instability. It is important to carefully research the current level of political stability in the country where you are looking to purchase real estate. Many countries around the world have unstable political environments that can adversely affect a real estate investment. In extreme cases, governments have been known to seize the property owned by foreigners without offering fair or any recompense.
Economic Instability. In many parts of the world economic instability can lead to demonstrations and crime. The added cost of having a full time security guard to patrol your property can seriously affect your bottom line. In addition, you may not feel safe in a country with a high level of crime.
Local Real Estate Laws. It is extremely important that anyone who is considering the purchase of foreign real estate understand the local real estate laws. The best course of action is to hire a local real estate lawyer who can help you navigate the local legal system. Real estate laws can be very complex in foreign countries and you need to be sure that your rights are protected.

- Ted Karsch

Free getaways around the world

2009-05-15T06:17:00-07:00

Even with the beaten-down travel industry spilling out deals on airfares like candy from a busted piñata, vacation planning nowadays often ends with, "It still costs too much." But suppose you could stay free in a vacation home? Those sweet deals might look a little more tempting.

Swapping houses with other would-be vacationers is one way to get a free stay. And the pool of homeowners looking to trade places is growing rapidly. At HomeExchange.com, the biggest Web site for home swappers, the number of listings jumped to 26,000 in January, up from 20,000 a year earlier. "The word's getting out that exchanging homes is really a recession-beater," says HomeExchange president Ed Kushins.

The savings can be dramatic. Real estate agent Lori Koppel-Heath made her first swap ten years ago, when she was living in Coto de Caza, Cal. Lori and her husband, Michael, a stockbroker and financial planner, were looking for a stay in Great Britain. Instead of paying $400 a night at a London hotel for six weeks, they traded their four-bedroom home for a five-bedroom house in Amersham, a town north of London. Total savings: $16,800.

And the couple's temporary home turned out to be as breathtaking as their savings -- an 80-year-old English Tudor surrounded by rolling hills and meandering footpaths. "It just looked like a fairy tale," says Lori.

Trading Down

Exchange clubs offer various kinds of lodging worldwide, whether you want to relax in simple digs or hold court in a castle. Just don't expect to trade a modest apartment in the hinterlands for a four-bedroom Parisian penthouse. The easiest swaps will be for homes similar to your own.

However, it's a common practice to trade down in house size if you're looking to visit popular destinations -- such as London, Paris, New York City and Hawaii. When Lori and Michael visited Scotland for their second swap, in 2000, the St. Andrews house they stayed in wasn't as big as their own 4,500-square-foot home. But it was in a fine location for the British Open that year. "A fair swap is one that both parties are comfortable with," says Lori.

Mary Lang has also happily downsized a bit in her exchanges. Swapping out her four-bedroom lakefront home in Cazenovia, N.Y., about a half-hour from Syracuse, Lang has settled in smaller, three-bedroom homes throughout Europe, including just outside London and Paris. The cozier quarters provided plenty of space for Mary and her husband, Vaughn, a real estate lawyer, and their two sons. "A small house is still much more spacious than the alternative -- a hotel room," she says.

And, again, the savings can be impressive. Mary, who recently retired as a professor at Syracuse University, estimates the family saved "easily $10,000" on each month-long vacation. Over the past four years, the Langs exchanged homes seven times.

Curb Appeal

You don't need to live in a palace of your own to arrange an attractive swap. Serial swappers Sam and Judy Robbins, who hail from Washington, D.C., get all kinds of offers for a stay in their 1,300-square-foot condominium. Members of three swapping networks, the Robbinses consistently get about one inquiry per week. Trading for apartments and houses all over the world, Sam and Judy have swapped abodes about 40 times since 1995.

Throwing in extras can enhance the appeal of your home. The Robbinses, for instance, are able to offer a car and their second home, a restored 1840s log cabin on a 300-acre tree farm in Lexington, Va. The whole package makes for an exchange worthy of a larger home with a pool or garden.

Highlighting the best features of your home and neighborhood can sometimes secure surprising swaps. "Our friends ask us, 'Who the heck wants to come to Syracuse, especially from Paris or London?'" says Lang. "But if you have a family and you're looking for a wholesome vacation, this is a quiet and charming spot."

In addition to offering a spacious, architect-designed house on the shore of the 6-mile-long lake around which the peaceful country town was built, the Langs include use of the family's pontoon boat in their exchanges.

Be Flexible

The more flexible you are, the easier it is to arrange swaps. Originally the Langs exchanged their home only during summer breaks. But later they began taking winter jaunts as well. Mary found that just when she was ready to escape to warmer weather, other vacationers appreciated her area for its great skiing and picture-postcard Christmases.

Sam and Judy Robbins are so flexible that they often let the inquiries they receive dictate their travel plans. For instance, they hadn't really considered a vacation down under until an Australian couple contacted them in 2003. They ended up making Australia part of a four-month-long trip around the world. "These ideas can come from nowhere and develop into quite a nice experience," says Sam.

But exchanging homes is also becoming a popular strategy for arranging quick getaways closer to home. "With the economy the way it is, there has been a real increase in weekend vacations," says Kushins.

Getting Started

To set up your home exchange, you first choose a network, then sign up online, review the listings and send inquiries to potential exchange partners. Travel expert Bob Jones, of BookingWiz.com, recommends using established home-exchange sites because they offer broader networks and better protection from shady swappers. Costs range from $45 to $200 per year.

With most networks, you can start perusing listings even before you join. Choose a destination country, then narrow your search by specifying a city and a range of travel dates. The pickier you are, the more difficult it will be to arrange a trip. Still, it's possible to swap homes even if your travel plans are fixed. The trick to booking specific dates is to post your inquiries well in advance; it's best to start the process six months before your trip.

Good Housekeeping

Once you set your sights on an exchange, it's time to get to know your potential partner. One thing you should be sure to discuss via e-mail or phone: housekeeping. Although the complaints Kushins has heard over the years have been few, most have concerned different standards of cleanliness. He was once compelled to remove a member from the site because the member had left an extreme mess for guests. However, he says, "there's never been a case of malicious damage or theft." To avoid becoming a victim, keep your valuables locked away in a closet or safe.

If you do encounter a housekeeping problem, complain to your network and take pictures to prove your case. HomeExchange investigates each complaint, and some networks include message boards and member ratings to address such issues. To head off problems, be diligent when setting up an exchange. In her seven swaps, Lang was disappointed only once, when a house she stayed in, though beautiful, was "in serious need of repair." She has learned to steer clear of that situation by asking for more pictures and requesting references.

Kushins also strongly recommends that you ask for references. "A home exchange is a little bit like Internet dating for your house," he says. But with swapping, you can use past relationships to screen suitors and find your perfect match.

Take Precautions

To prepare for guests, turn off the pay-per-view and long-distance capabilities on your TV and phone, says Jones, of BookingWiz.com. Also, stow away all your financial information, and get your neighbors involved. "They'll be certain to let you know if a moving van shows up," Jones says.

For a $25 fee, HomeLink offers cancellation insurance; if your temporary home is unavailable in an emergency, a representative will help place you in another home or hotel. You send lodging receipts to HomeLink, and at the end of the year the insurance fund is divvied up proportionately (meaning you may not be fully reimbursed).

Check your homeowners insurance for coverage for exchange guests, and review your auto-insurance policy before you swap cars. HomeExchange.com reports that most policies cover visitors as invited guests. Many exchange sites offer sample agreements for both homes and cars to help you formalize the terms of the swap.

- Kiplinger

Negative Outlook for Arabian Gulf Real Estate Market, Reports Moody's

2009-05-13T06:15:00-07:00

The outlook for the Arabian Gulf real estate market for 2009 is negative, reflecting tightening access to funding, declining demand and a need to preserve cash, says Moody's Investors Service in a new report entitled "Arabian Gulf Real Estate Market Industry Outlook".

The report expresses Moody's expectations for fundamental credit conditions in the industry for the next 12-18 months.

Martin Kohlhase, an Assistant Vice President-Analyst in Moody's Corporate Finance Group, explains:

"Although drivers of demand vary considerably among the Gulf Cooperation Council (GCC) countries, residential and commercial real estate are under pressure due to lower demand, lack of funding, worsening consumer sentiment and risk of over-supply."

Mr. Kohlhase adds, "Saudi Arabia is the notable exception as it benefits from a large and growing indigenous population base and structural under-capacity for residential property, especially for low- and middle-income families."

Moody's notes that obtaining financing has become more challenging since September 2008 and a nascent mortgage industry cannot fully compensate for a funding shortfall from other sources. Negative market sentiment has also kept away many buyers who are no longer willing to acquire off-plan property (or the capacity) and thereby provide a source of funding through down-payments.

"Furthermore, long-term population growth rates -- in excess of 5% for most countries in the region -- are no longer realistic in the short term and may become negative over the coming quarters as investments in commercial activities, including foreign direct investments, are drying up," cautions Mr. Kohlhase.

Companies have also started to lay off foreign employees, which could negatively impact demand for residential properties, as some markets appear to be over-supplied. Thus, Moody's believes that the advanced markets (Dubai and Doha) will be impacted the most as expansion plans in these markets have assumed a steady influx of expatriates. Instead, these markets have witnessed a decrease in property prices and a slowdown in construction activity. Moody's notes that many projects, particularly in Dubai, have been undertaken in anticipation of future demand, which may not materialise.

Moody's also understands that real estate companies have generally put the majority of planned, but not yet commenced, projects on hold, whilst completing or consolidating those where construction has started. Completed but unsold projects will have to remain on the balance sheet. Furthermore, companies with (uncommitted) short-term bank lines -- which are more common in the Gulf region than in more mature markets -- may face increased refinancing risk.

However, Moody's notes that public infrastructure spending remains buoyant on the back of economic stimulus packages, which have been bolstered by government surpluses accumulated during the period of high oil prices. Furthermore, most real estate companies in the region benefit from strong government support, which in turn underpins their ratings. Moody's expects such high levels of support to continue.

Moody's currently rates seven companies in the GCC region that have real estate-related activities. Some are conventional developers, whilst others operate free zones or cater largely to a certain industry. The majority are government-related issuers.

The secret side of Panama

2009-05-11T06:54:00-07:00

Even the most sophisticated traveler could be forgiven for thinking that there's little more to Panama than its iconic canal, seaside capital, and snorkeler-packed Bocas del Toro islands.

The Los Santos region of Panama has spectacular rolling farmlands and blissfully empty beaches.

But there's a more secret and equally spectacular side to the country about a five-hour drive west from Panama City: the Pacific coast region of Los Santos. Here, rolling farmlands and stands of mahogany and cocobolo trees hug an azure coastline, luring surfers, nature buffs, and, increasingly, travelers and second-home owners from all over.

Although roadside real-estate billboards suggest a far more developed future, Los Santos has managed to stay blessedly free of resorts. In their place are a handful of low-key -- and far more affordable -- boutique hotels.

The most stylish is the seven-room Villa Camilla, just outside the fishing village of Pedasí. The red-tiled hideaway, located on an 800-acre parcel of the Azuero Peninsula, started out as a private escape for French interior designer Gilles St.-Gilles and his wife, Camilla.

"The area reminded us of Tuscany," says St.-Gilles, who landscaped the estate with fragrant jasmine, plumeria, and hibiscus. In 2005, the couple opened their place as a hotel, and last fall they added 20 new seaside duplex lofts.

As stylish as they are family-friendly, the setups come with full-size kitchens, extra guest beds, and mosaic-tile flooring. An in-house stable is ready for shoreline horseback rides, and you can sign up for snorkeling trips to nearby Isla Cañas, a palm-fringed refuge where thousands of leatherback turtles converge to build nests.

Farther inland, the center of Pedasí has a cow-town vibe: Picture low-slung cottages painted bright green and yellow, and ranchers wearing handmade Panama hats.

Yellow is also the color of choice at the new Casita Margarita. This five-room B&B comes with locally crafted cocobolo furniture and a wraparound veranda overlooking Pedasí's main street.

Perhaps best of all, it's within walking distance of local hangout Mano Surf Community, a pro shop that does double duty as a café and juice bar, and El Gringo Dusek, a no-frills, alfresco cantina run by retired U.S. Navy officer Joseph Dusek, which serves the best barbecue ribs in Los Santos.

Of course, beyond the culinary surf and turf, the region's big draw is its blissfully empty beaches: Some of Panama's most scenic -- Los Destiladeros, Modroño, and the black-sand Playa Venao with its eight-foot breaks -- are short drives from Pedasí.

Closer to home, Pedasí's El Arenal is a good launchpad for day trips to Iguana Island. (Fishermen stationed by the pier rent their motorboats, captain included, for about $50 round trip.) The hotel-free and nearly visitor-free isle is named for its resident black and green iguanas. Sign up for an Iguana Island Foundation snorkeling and hiking tour; you might just get a good look at some hatchlings.

While it may be hard to top that sight, 77-year-old Dalila Vera de Quintero knows how to command equal wows. Her lemon-yellow bakery in a bungalow, Dulceria Yely, is famous across Panama for its home-style sweets, like almond queques (pound cakes) and creamy chicheme, a shake blended from sweetened milk, fresh corn, and crushed vanilla beans.

She also stashes a cake or two in the kitchen for favorite customers, such as former Panamanian president and Pedasí native Mireya Moscoso. Swoon loudly enough and Quintero may just reward you with a thick presidential slice.

- CNN

Economy Indicators in Costa Rica

2009-05-08T06:38:00-07:00

Costa Rica is a small country, but it has big economy potentials that place it on the number eleven position of the largest economies of Latin America. Tourism, Agriculture and the technological services have placed Costa Rica in the top positions. Over the past ten years, poverty has been reduced. During the 90’s, poverty levels were between 21% and 22%, while nowadays the index has dropped down to 16.7%, and the economic growth has gone from 0% to approximately 7%, registered in the past few years.

Costa Rica Economic Indicators

Something that has influenced with the growth of the economy in the country is the commercial relation with several countries that have become important markets for Costa Rica. The commercial free trade agreements with all these countries also generate favorable conditions for commercialization. Costa Rica has free trade agreements with Canada (since 2002), China (since 2002), Dominican Republic (since 2002), with countries that are associated with the Common Market since 1963 (Guatemala, El Salvador, Honduras and Nicaragua). Some other countries with which Costa Rica has agreements are Mexico since 1995, Panama since 1973 and the USA, started in 2009. Currently, free trade agreements are also being negotiated with the European Union and China.

From 1997, the economic growth has increased. Exports through the Free Zone, and Tourism are both the best incomes for the country.

Exports started with the elaboration of microprocessors by INTEL that represent a 20% of the exports, and products such as pineapple, bananas, coffee, cocoa, sugar and meats. Generally speaking, the country from which Costa Rica imports the most is the USA with approximately 44%, the European Union with 17%, the Caribbean countries through the CARICOM agreement with 14%, Mexico 3% and the rest of the countries 21%. In the last few months, China has become the second largest commercial partner for Costa Rica.

In regards to the exports, they are mainly microprocessors, canned food, textiles, materials for construction, plastic products, electric components, medical equipment, among others. Another important product is the electric energy – approximately 115 millions kwh annually.

In regards to the imports, the main products are crude oil, raw materials and consumer goods. The most important countries for imports are the USA, Japan and Mexico. Nowadays, China has also been added to the list.

Also, the settling of small foreign companies is part of the economic growth due to the production that is generated.

Almost half the national income is due to the 2 million of tourists that visit Costa Rica per year (approximately $1,900 USD per year) The majority of the tourists come from North America; another part of this income belongs to the technological services and the agricultural sector.