Find your Latin American dream home but beware of scams

Latin America has many great places to invest and buy real estate and the process is generally smooth however there are a few things you need to watch out for. Besides the fundamental cultural differences in business etiquette you need to make sure that the deal is legit. Of course there are real estate scams in other parts of the world but the problem is often exacerbated due to differences in laws, your rights as a foreigner, and the difficulty of researching and verifying the history of a property.

Domenick Buonamici, an American expat living in Ecuador, recently posted a article entitled “Real Estate Scams in Latin America to Avoid” which outlines seven of the most common complications/scams that foreign investors come across when purchasing real estate.

One situation mentioned in the article is what is referred to as the “Uncle Larry Scam”, when the house is sold and the current tenant either wasn’t informed, or for whatever reason simply refuses to leave. Since the authorities usually don’t serve much help in these sorts of cases, Buonamici advises that the buyer makes sure the house is tenant-free before shelling out any cash to the owner or the agent.

Other scams mentioned in the article are those that involve falsification of documents, (it is ridiculously easy to forge pretty much any kind of document in Latin America) or failing to follow the local registration protocol, rendering your recent property purchase invalid.

The good news is that most of these situations can be avoided by simply hiring a good attorney to help you with the process. So one should not be dissuaded from buying a beach cottage on the Mayan Riviera or a mountainside chalet in Patagonia, because as Buonamici states, investing in Latin America has been “the best choice many people, myself included, ever made”.

Its also a good idea to get advice from other foreigners who have experience purchasing property in the country you are interested in before making any sort of investment. Online expat forums for the country that you want to buy property in are often a good source for this kind of information.

To see the complete list of scams and tips, check out Buonamici’s article.

Related Articles:

• Real Estate Scams in Latin America to Avoid
• Vacation Rental Tips

Kudos:

• Thanks to alvez for the photo

According to Mercer’s annual ranking of the world’s top 50 cities in terms of quality of life, in European capitals people “live the good life”.

The major factors used to rank the locations include the economic & political stability, social & cultural conditions, education, public services, housing, and entertainment options.

The survey also ranked the cities’ infrastructure based on ratings of electricity and water supply, communication services, public transport, and the range & availability of international flights.

European capitals captured 7 out of the top 10, with German and Swiss cities clearly dominating with 3 out of the top 10 apiece.

Interestingly, the highest ranking US city, Honolulu, only figures in at 29th place overall.

Of particular note is that Eastern Europe has moved up in the rankings, spurred by greater economic and political stability, increased availability of imported goods, and improved overall living standards.

Top 10 Overall

1. Vienna, Austria
2. Zurich, Switzerland
3. Geneva, Switzerland
4. Vancouver, Canada
5. Auckland, New Zealand
6. Dusseldorf Germany
7. Munich, Germany
8. Frankfurt, Germany
9. Bern, Switzerland
10. Sydney, Australia

Other Resources

• Mercer survey – Quality of Living Global Cities Rankings
  

Photos

• Thanks to Guldfisken for the photo

Photo by Kok Leng Yeo

Mercer recently released a property rental index for 50 international cities listing the cheapest and most expensive rentals around the world. Mercer created the index for companies looking to place expats in foreign locations so the report might not be great for indicating vacation rental trends or general long-term rental trends but it still can give a good idea of how the current economic problems and the recent resurgence in the strength of the dollar have impacted the market.

The top 10 most expensive cities are

1. Moscow, Russia
2. Tokyo, Japan
3. Hong Kong, Hong Kong
4. Mumbai, India
5. New York City, USA
6. Beijing, China
7. Geneva, Switzerland
8. New Delhi, India
9. London, England
10. Singapore, Singapore

And the top 10 cheapest cities from cheapest to most expensive are

1. Johannesburg, South Africa
2. Mexico City, Mexico
3. Toronto, Canada
4. Jeddah, Saudi Arabia
5. Prague, Czech Republic
6. Stockholm, Sweden
7. Bangkok, Thailand
8. Budapest, Hungary
9. Buenos Aires, Argentina
10. Brussels, Belgium

I still can’t believe that Brussels and Stockholm were sixth and tenth cheapest on the list. I wonder if companies receive subsidies or some other benefit for post overseas workers in those cities.

You can find the full report at mercer’s website.

I did a bit of research and came across an excellent resource for ATM/debit/check cards and their foreign exchange and per transaction fees. Here are the best cards for withdrawing cash around the world that don’t charge any exchange fee, transaction fee, and often reimburse you if the foreign bank charges a fee.

• Bank Direct (on the cirrus network)
• Bank Of Internet
• Bangor Savings Bank
• Charles Schwab
• Citibank (only certain accounts but not the standard checking or savings account)
• Fidelity Investments (linked to a mySmart Cash account)
• PNC Bank (excluding the free checking account)
• Presidential Online Bank (they have one ugly site)
• State Farm Bank
• TD Bank
• Wells Fargo (PMA Checking only)

You can see the full break down of a large list of credit cards and bank cards with other notes and comments about restrictions and limits at the FlyerGuide. Keep in mind that the services offered and other types of fees vary greatly for each of the banks so you’ll probably want to do a bit more research before signing up. If you’re currently outside of the States you shoud also see which banks allow you to apply online. Charles Schwab for example, which interested me because of their high interest savings rate and nice website, unfortunately requires that you physically send your application to them.

Keep in mind that banks occasionally change their policies. In early 2008, I was shocked to learn that my ING Account started charging me a 2% foreign exchange fee on every withdrawal and they didn’t even notify me of the change.  Be sure to review your bank statements regularly. You should also verify that you are getting a good exchange rate. Sometimes banks will charge hidden currency conversion fees that don’t show up as separate line items on your bank statements.

I’ve lost a lot of money due to foreign bank and exchange fees over the last few years. If you’re going to spend a good deal of time living or traveling abroad it is definitely worthwhile opening a new bank account to avoid fees for taking out cash. Trust me. They add up quickly.

Photo by Andres Rueda

Whether you’re a traveler or an expat, generally the easiest, safest and cheapest way purchase items in foreign countries is to use a credit card. ATM cards almost always charge you some sort of fee for using a foreign bank either as a fee on each transaction or hidden in the currency conversion or both. In general, money changers and banks charge quite a lot to change money and it’s a bit of pain to have to carry money with you and then shop around to find the cheapest money changer. As for traveler’s checks, does anyone actually use them anymore? I’ve never actually used them myself but I hear that they can be a big pain to convert and I imagine the conversion rate isn’t spectacular either.

Most credit cards have hidden charges and can be expensive for foreign purchases. If you call your credit card company and they say there are no fees, make sure you calculate the actual exchange rate to be sure that you are getting a good rate. You simply divide what you paid in the local currency by what appears on your credit card statement. $270 Argentine Pesos / $80 USD for example would give you a rate of $3.375 Argentine Peso for each USD. You can follow the same steps to calculate the rate for your credit cards or ATM cards that have additional fees by adding the additional fees to the amount you paid in dollars. Bank of America for example charges $5 for each withdrawal and I believe a 2% conversion fee. So, in the last example, the rate would be $270 Argentine Pesos / ($80 + ($80 * 0.02) + $5) or $3.118 Argentine Pesos per $1 USD.

I’ve been using Capital One for a few years now and as far as I know it is the best credit card option for making international purchases; at least if your home country is the United States. Capital One actually covers the international fee charged by Visa, there is no hidden currency conversion fee, and you earn points for purchases. Their website still needs some work but I am more than willing to suffer through a poorly designed website to save some extra money.

Of course sometimes you can’t avoid using cash but if you can use credit I would go with Capital One or make sure that you aren’t unexpectedly paying more than you thought when your statement comes at the end of the month.

Earth Class Mail takes all of your U.S. postal mail, scans it and posts it online for you to review. From there, you can decide to open your mail and have it scanned to a PDF file, have it recycled, shredded, archived or forwarded to another address. You can also choose to forward-ship all your mail in one batch, or pay $2.95 to ship any single piece of mail via USPS First-Class Mail.

• Setup fee – $25
• Monthly fee – $9.95 for annual subscription
• Each additional name on the account/mailbox – $3 per month
• Storage – 1st month free then 3c per inch per month
• Online review and discard option – Yes (shredding and recycling)
• Mail scanning – 50 pages included in monthly rate; extra items cost 50c per envelope and 25c per page
• Monthly rate includes 35 mail items per month received after which 30c per mail; higher monthly rates include more received pieces per month (they are the only provider who count received items for the monthly rate)

Bongo International provides you with a personal US address at their warehouse to accept your mail, which they then forward to you. They also offer a Personal Shopping Service, allowing you to purchase products from sites like e-Bay and Craigslist through a personal shopper, who handles all issues of security and payment; all international shipping rates are 50% off what you would normally pay with couriers such as DHL or UPS. Bongo operates in 223 countries.

• Setup fee – $0; if you choose the pay per use option there’s a $5 sign up fee
• Monthly fee – $15
• Each additional name on the account/mailbox – $0
• Storage – 45 days after which they charge $5 per month per item
• Online review and discard option – Yes
• Mail scanning – 50c per page
• Repackaging – $0
• Shipping charges are based on weight or dimensional weight, whichever is greater.

USA Box offers a simple, straightforward service, which includes a Miami street address, online mail monitoring, junk mail discarding option, and discount shipping rates.

• Setup fee – $25
• Monthly fee – $10
• Each additional name on the account/mailbox – $0
• Storage – Up to 6 months
• Online review and discard option – Yes
• Mail Scanning  – $9.99 per item
• Repackaging – $5.00 per box, non-refundable
• Shipping costs up to 1 lb $35.95; $5.75 per additional lb

USA2ME gives you a US mailing address to receive items from anywhere in the world. The online Mailbox Manager allows you to view and manage all your mail from your internet account. Other features include junk mail discarding, fax reception, online review and online shipment tracking.

• Setup fee – $15 (silver)
• Monthly fee – $10
• Each additional name on the account/mailbox – Up to three 3 names are permitted at $5 per name per month
• Storage – 45 days free then $1 per lb per month
• Online review and discard option – Yes
• Mail scanning – 6 pages includes in monthly fee then 25c per page
• Repackaging – 50% discount per item
• Shipping Costs per pound – $ 24.95; $4.95 per additional lb

USAMail1 offers USA Post Office approved mailboxes and Insured Storage Facilities. A mail manager allows you to see a list of mail you’ve received; you can choose to discard mail at no extra cost. USAMail1 also allows you to consolidate your mail and save on international shipping rates.

• Setup fee – $49.95 includes first 3 months rental
• Monthly fee – $9.99 after first 3 months
• Each additional name on the account/mailbox – Up to three additional names included in monthly rate; $25 onetime fee per additional name
• Storage – 45 days storage free then $1 per lb per month
• Online review and discard option – Yes
• Mail scanning – $2 up to 6 pages and then 25c per page
• Repackaging – $3.95 per letter pack; for boxes and larger items $1.95 per item

Based out of Texas, US Global Mail lets you choose from a suite, box, apartment, or office address. You can monitor your mail in real time and customize shipments by carrier, (UPS, DHL, FedEx, and USPS) price and speed.

• Setup fee – $0
• Monthly fee – $15 or $150 annually (Premium, minimum of three month contract)
• Each additional name on the account/mailbox – $0
• Storage – 1 month free then $1 per lb per month
• Online review and discard option – Yes
• Mail scanning – Not offered
• Repackaging – $3 for boxes or $1.50 for letters and magazines

Paperless Mail: For those looking for a fully electronic option, Paperless Mail is a simple and affordable option. Your mail is picked up each day and delivered to their processing facility where it is opened and scanned. All scans are sent to your email inbox. You can also opt to have your image files archived on a CD-Rom. Original mail is tagged and stored in their warehouse.

• Setup fee – $25
• Monthly fee – $9.95
• Each additional name on the account/mailbox – $0
• Storage – up to 90 days
• Online review and discard option – Yes
• Mail scanning – $0
• Repackaging – Unavailable
• Hardcopy retrieval – $4.95 plus postage per item

Choosing the best option depends on your location and the amount of mail you receive. Figure out your estimated use of the service and any features you specifically require. From there calculate your costs for each provider. Keep in mind that not all services offer the same features, and the pricing can vary substantially. Take consolidation for instance; while some companies simply don’t offer it, others charge a flat fee per item, while others will give you a discounted percentage on shipping. Concentrate on what suits you best. Mail services allow you to easily live outside of the United States without having to depend on friends on family to handle your mail

Mail Forwarding Services

• Earth Class Mail
• Bongo International
• USA Box
• USA2ME
• USAMail1
• US Global Mail
• Paperless Mail
• Mailbox Forwarding (added 10/18/09)

Links and other resources

• Severing Ties: Mail Forwarding Services for Expats
• Package and Mail Forwarding
• Online Post Offices