Bright Lights, Big City

Dear Reader,

When considering an overseas second-home destination, one of the first choices you’ll make is whether you want a city, beach, or highland location. Today, we’re looking at three cities in countries on our beat…where you can profit, live or play.

The City for Play: Buenos Aires, Argentina

The weather’s seasonal and temperate, and this thriving city is home to 13 million people. Buenos Aires offers something for everyone…

For shopaholics, Avenida Florida displays a dizzying selection of elegant leather bags and shoes, silver and crystal. Recoleta’s the place for clothing from local designers…at great prices compared to London or New York. If you collect antiques, head to San Telmo, and browse the weekend market for chandeliers, 1930s furniture, paintings, or ceramics.

Sports fans can choose between football, polo, boxing, tennis, rugby, and pato (a cross between polo and basketball…on horseback). Foodies can sample Italian food…French pastries…and of course, parrilla (barbecued meat).

For culture buffs, the city is dotted with art galleries, museums, historic churches, cathedrals and elegant period buildings. Buenos Aires preserves the homes of noted writers, composers, and artists. And you can see tango live on the streets, in San Telmo and La Boca. Teatro Colon, considered one of the world’s finest theatres, hosts performances of ballet, opera, classical music and plays.

Lack of political and economic stability places Buenos Aires fairly low on the list for investment hot spots right now. But if you dream of big-city living with all the amenities on tap, it’s hard to beat BA.

Property Stats: Average prices are significantly lower in Buenos Aires than other world capitals, at $2400 a square meter for city center condos. That’s a quarter of Paris prices…a fifth of New York prices, and a tenth of central London prices. Rental yields average 6-7%.

Sample Property: A beautiful apartment (121 square meters/1300 square feet in size) in the heart of the city is on the market for $315,000. The building has indoor gardens, and is a short walk to Avenida Florida, Teatro Colon, and the gourmet restaurants in Puerto Madero. Fully refurbished, the three-bed three-bath apartment comes furnished and equipped.

The City for Living: Panama City, Panama

Panama boasts a tropical climate and a population of 880,000 in the city. It’s much smaller than Buenos Aires…easier to navigate, easier to get to, and it feels very multi-cultural.

Because Panama is a small country, getting around it is easy. Like its better-publicized neighbor, Costa Rica, Panama is home to gorgeous beaches…tropical rainforest…vast national parks…a Caribbean and Pacific coast…diverse wildlife… lakes, mountains and waterfalls…all within a 2-3 hour drive of the only First-World capital city in Central America.

For a city its size, Panama has a fantastic selection of eateries, where you can find food from all corners of the globe (Italian, Argentine, Spanish, French, Chinese, and Peruvian). Supermarkets stock many brands you’ll know from back home, and don’t charge the hefty premium for these imported items that you’ll notice in other countries. In fact, thanks to a low tax regime, Panama’s modern malls attract shoppers from all over Latin America.

A generous pensionado (retiree) program gives discounts on eating out, utilities, travel…you name it. The cost of living is relatively low. For families, the country ranks high in the region for safety, and the city has a good selection of private schools. Its business-friendly environment makes it the location of choice for many entrepreneurs. The city airport is a major hub, with daily flights to many locations in the US and Europe. Panama City has excellent medical care, too.

It’s easy and comfortable to live in Panama. It has the touch of familiarity …mixed with a unique exotic flavor. It might not offer the best investment potential right now (there’s an over-supply of city condos), but as somewhere to live, it’s hard to beat.

Property Stats: Average prices in the city vary by neighborhood, but a ballpark figure is $1500 a square meter for newer construction. Premium waterfront locations average $1800-$2500 a meter. Rental yields average 8-9%.

Sample Property: In a prime city center waterfront location, a 104 square meter (1,199 square-feet) ocean-view condo has a $257,000 list price. The property is close to parks, shopping, restaurants, the financial district, and entertainment. Building features include a concierge, pool, gym, and outside social area. The condo comes with all furniture and appliances.

The City for Profit: Fortaleza, Brazil

With a tropical climate and a population of 2.4 million, Fortaleza easily wins one category in this three-city comp: best city beach. And that’s where you’ll find the investment upside, too…

But first, the background. Americans and Europeans aren’t familiar with Fortaleza…but it’s the #1 tourism destination for Brazilians. Playing host to the soccer World Cup in 2014 will bring more foreign tourists, and global media coverage. And before the world’s press descends to cover the World Cup, Fortaleza’s getting a facelift. It’s a pricey facelift, at $5.6 billion. And it’s not all going on roads, bridges, new metro lines and soccer stadiums…

Around $135 million goes towards a new aquarium—South America’s biggest. Another $10 million will renovate the cultural center. And $30 million covers a general upgrade and extending the existing city boardwalk.

Fortaleza’s boardwalk is where everyone wants to spend time…dining in the fashionable restaurants, vacationing in the hotels, living in the big, expensive condos that sit alongside it. In the evenings, the boardwalk fills with street markets, and what feels like most of the city’s inhabitants…exercising, partying, and people-watching. But the boardwalk is fully built-out. In the last three years alone, prices for boardwalk property have doubled.

By contrast, the adjacent Praia Iracema’s wide, white beach is presently undeveloped. But a new boardwalk now under construction will include Iracema Beach, opening this stretch of beach to development for the first time.

People traditionally come to Iracema for volleyball tournaments. And a million revelers pack the beach at Carnival and New Year’s. But they only come here to party—not to dine, vacation or live.

With the new boardwalk, that will change. This is the site for the new aquarium, and the location of the cultural center. Already, bars and restaurants are eyeing up beachfront plots. They want to open in time for the World Cup…

In Iracema right now, property prices are as much as 50% lower than in the existing boardwalk. But once the work is finished, you won’t know where the old boardwalk stops and the new boardwalk begins. That means a new opportunity for both property appreciation, and strong rental yields.

Property Stats: Average prices in the city vary by neighborhood, from $1100 to $6000 a square meter. Premium boardwalk locations average $6000 a meter. Rental yields average 9%.

Sample Property: In Iracema, a new 72 square meter (775 square feet) condo is on the market for $179,669. This unit has two-beds.  Payment terms are over 80 months. Units are currently renting for $1300 a month.

Margaret Summerfield