Flush With Cash, Americans Snap Up Properties Abroad
By Tony Czuczka, HispanicBusiness.com

WASHINGTON - U.S. cookbook author Mimi Bean went to Costa Rica looking for a holiday home. She wound up buying a restaurant as an investment, sold it and now lives in a beach village that is fast becoming a surfers' paradise.

Whether it is Bean leaving Atlanta and changing her life, or Brad Pitt and Angelina Jolie spending holidays at a luxury resort, Americans citizens are flocking to Central America like never before. More and more often, they buy.

Ageing baby boomers who want to retire without paying Florida prices, young professionals flush with profits made in the U.S. housing boom, developers who see huge potential in places like Panama - all are heading south from the U.S. in search of beauty, fun and profit.

"A huge part of it is that the cost of living and taxation on properties are very low," said Karen Ebanks, a real estate agent in Costa Rica who helped Bean with her transactions. "You can afford to have a live-in housekeeper and gardener."

Foreigner-friendly changes in property laws, better communications and growing political stability have already heated up real estate markets in first-tier destinations like Mexico and Costa Rica to the point that would-be expatriates are looking farther afield.

Bean came to Tamarindo on Costa Rica's northern Pacific coast after selling her restaurant near the capital San José last year. Now she does interior design and plans a food condiments venture.

"For her it just started out as an investment," Ebanks said in a telephone interview. "She hadn't planned to move here full time and just fell in love with the place."

Soaring home prices over the past five or six years have fueled the foreign property craze. Owners have cashed in by selling or leveraging their U.S. homes; at the same time, buyers priced out of the domestic market are looking south of the border for deals.

Take Chris Lyman. He and his wife Carmella, partners in a public relations firm, sold their three-bedroom second home in Arizona in October 2006 for $570,000, 73 percent more than they paid for it three years earlier.

The proceeds went to help buy a seaside villa with pool in Canto del Mar, southeastern Costa Rica, which the couple hope to rent out when they are not spending time there.

"It's dirt roads, miles of beach that you don't see another person on," said Lyman, 37. "It's a huge escape from pretty much anywhere in the U.S."

Though relatively remote, the community has Internet and mobile phone service, critical for two networked professionals whose main residence is in California.

"It's not like you're taking a backpack and going off into the jungle. You don't have to be detached when you're there," Lyman said.

And compared to the superheated U.S. property market, Costa Rica offered far more value for money, he said.

Meanwhile, higher-end U.S. customers who already own that ski chalet and a desert getaway, might look to places like Costa Rica for a third or fourth home.

All that money trickling down south is pumping up prices in the primary Central American markets - led by Mexico, a favorite destination for next-door Californians, and Costa Rica.

Right now, Panama is red-hot. Experts see Honduras, Nicaragua and Belize as the likely next big things in the foreign-home rush.

"Countries have done a great job of opening up their second-home market," said Jeff Hornberger, an executive at the National Association of Realtors. "They see it as an economic development tool."

As U.S. residents have grown bolder about traveling and investing in property abroad, some have bought in overseas holiday hotspots in Croatia, Turkey and Asia.

But Central America has the natural advantage of closeness and, for better or worse, historical ties. Little things make a difference - for example, that Panama's currency is the U.S. dollar.

"Latin America is what's booming right now and it's offering a lifestyle that people can't afford any more in the U.S.," Hornberger said. "And people are making money on their property, too."