Tales of buying property south of the border

Sunday, November 11, 2007

Ten years ago, Americans who wanted to buy a vacation or retirement home thought of places such as Florida, Arizona or Hawaii. Today, they're just as likely to consider Mexico or Central America.

Last week, in the first part of this two-part series, I cited a number of reasons why more Americans are buying real estate abroad.

Mexico and Central America are attractive, especially for Californians, because they're close and inexpensive.

Some countries are easing restrictions on foreigners owning property and actively courting North Americans.

Each year, International Living magazine rates the best places to retire based on costs, health care, safety, taxes and other factors.

This year, it named Mexico No. 1, citing its "perfect mix of centuries-old traditions and contemporary lifestyles."

Panama, which had been No. 1 for six years, dropped to fourth place, mainly because of rising property prices and new visa restrictions.

Buying property in a developing country is not without risk. Many don't have the same property rights and judicial system we do.

Americans who failed to do their due diligence have bought homes from people who didn't have the right to sell them.

Corruption and bribery are not uncommon. Health care might not be up to U.S. standards. And the infrastructure we take for granted often doesn't exist.

Americans buy oceanfront property "and then find out the roads are bad, there's not a mall five minutes away. Right outside their beautiful complex is a lot of poverty," says Margaret Hussey, supervising producer with "House Hunters International" on HGTV.

Here are stories about Northern Californians who bought property in Mexico and Panama.

On the cheap in Panama

Glenn and Reinhild Gamboa were planning to sell their restaurant, home and cabin near Yosemite in five to eight years and retire somewhere cheaper, perhaps India or Bulgaria. But when they visited Panama last year, they realized they could do it immediately.

Panama had everything they wanted - warm weather year-round, cheap real estate and low living costs. Because Panama's currency is the U.S. dollar, there were no exchange-rate worries.

Finding a place, however, took some sleuthing. "There are no Realtors in Panama," Glenn Gamboa says. "You go through a lawyer or go to the mayor of the village and ask what's for sale."

Driving around, the Gamboas found a half-acre lot with a river on two sides in El Valle de Anton, a village in an extinct volcano.

"We found a lawyer (in Panama). The lawyer called the owner, we got together, made an offer and settled. It took about four days," Glenn Gamboa says.

They flew home and put their properties on the market. They all sold within 90 days.

The Gamboas paid $52,000 for the land and $90,000 to have a 3,400-square-foot cinderblock home constructed. Building in Panama takes patience and a certain inattention to detail. "They don't think it's important to have the tiles line up," Glenn Gamboa says.

Glenn and Reinhild Gamboa's home in El Valle de Anton, Panama, was cheap enough that they could retire early. Photo courtesy of Glenn Gamboa

Americans in Panama have to get used to seeing guards with Uzis in storefronts, and the food "is pretty bad," he says.

But for $430 a month, the Gamboas pay for a gardener; a maid; water; electricity; garbage; Internet; and life, homeowners and car insurance. They don't have health insurance. If they have medical problems, they'll pay out of pocket or, when they're Medicare-eligible, return to the United States.

The Gamboas have opened a cooking school, which brings in about $1,000 a month.

Panama is "safe, clean and the people are generous, amazing," Glenn Gamboa says. "I've been stopped five times (for traffic violations) by the police. But I've never gotten a ticket."

Read the first part of this two-part series at links.sfgate.com/ZBND.

Net Worth runs Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at kpender@sfchronicle.com.

This article appeared on page F - 1 of the San Francisco Chronicle

Full text in http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/11/BU12T8UPN.DTL