Uruguay Coastal Properties

Could fallout from the Credit Crisis hit countries that were not participants of the easy money orgy, such as Uruguay?

If you’re living and breathing, you probably know the US financial markets, the credit markets in particular, are in a tale spin reminiscent of the 70’s. The bad news is it’s not just the US; Much of Europe is suffering from the same disease: Too Much Debt. The easy money, low interest rate, high risk loans that fueled the real estate boom in the UK and Spain, among others, are bringing the house down (pun intended.) Even the hard money Swiss are taking big hits. Credit Suissee recently reported loses of 14 billion francs on just one portion of its credit portfolio, and is marking down major chunks of their total holdings by 20%.

The video Debt Implosion provides a wonderful explanation from a old school conservatives point of view how bad it really is……think a few trillion, may be more. There’s a priceless spin by the BushWacker, aka as the W (President Bush), “The credit markets are functioning effectively.” Doesn’t this guy just crack you up? While the subject is the US, the fall out from the credit crisis will affect of the whole planet to one degree or another.

Will Uruguay feel the back blast? Count on it.

Will it be as severe as the US and parts of Europe? I do not believe so.

Stay Tuned!

Steve Bowman

PS: Just for fun, here’s a way to conceptualize a trillion dollars. 100 billion, a tenth of a trillion, is estimated to be a stack of 100 dollar bills extending to the moon.

A quick note to our readers. This week’s post will be short.

My wife Chris is having a minor surgery and a huge city tree feel over and demolished one of our cars. Savannah has massive, beautiful live oaks that are very protected by law. We’ve seen the downside.

Next week I’ll be back with a real estate or property related  article.

Thanks,

Steve

I’ve never brought up personal stuff on this site because I haven’t felt like it’s relevant, but recently, a number of people have asked about what I do here in the States.

We’re in the real estate business, residential property management in Savannah, GA, primarily for our own portfolio. Most of our rentals are long-term, although we do have a couple of short-term/vacation rentals. I also do some professional contract work for organizations in town.

I feel very lucky to add the rental business is strong in our niche; we’re even increasing rents a bit. So far, the real estate crisis has not affected our  strategy: positive current cash flow. Fortunately, we own mostly smaller units (studio & one bedroom) which are typically in high demand locally. We’re seeing the large rental units, three bedrooms plus, getting hammered; they’re vacant or fetching lower rents. As the growing glut of unsold houses and condos come on-line as rentals, the bleeding will get far worse in this sector.

There is one underlying reason we’re doing OK. I never bought into appreciation get rich quick frenzy. We purchased based current cash flow/return on investment, which guided us to well priced smaller units, with reasonable cash down payments. Don’t get me wrong. Our balance sheet has taken a hit like everyone else but that wasn’t the reason for owning the stuff in the first place.

In the long run, rental property is worth the rents. That’s it.

For what it’s worth, the bottom in the US market in nowhere in sight. There are shoes yet to drop that no one is even talking about. As we’ve been saying for nearly two years, look to international property markets for opportunity, diversification and perhaps even safety at some point. Someday, the US market will be a screaming deal and the prospect of making gobs of money will be off the scale. This day is well into the next decade.

Stay Tuned!

Steve Bowman

Uruguay Coastal Property went live on July 23rd, 2007.

We’ve been so preoccupied with our rental business here in Savannah, Ga, that the date slipped past without note. So let me take this opportunity to thank those of you that have done business with us in the last year, and our loyal readers.

Thank you for your business and your interest in property and real estate on the Coast of Uruguay.

Stay Tuned!

Steve Bowman

If you’re not getting info updates about the Sugar Loaf development, this may be of interest. Below is what I guess is a PR release of sorts.

The message about prices makes sense to some degree. With the price changes, clearly the project is in the Luxury category (homes, property, real estate, estates) for Piriapolis. The larger units will sell for over $500,000 with upgrades.

What’s a little hard to buy is the Fractional Ownership stuff. So why would I do this? Don’t get me wrong; I’m rooting for Sugar Loaf to be a success. The plan is nifty, the designs are cool and the location is excellent. But this Fractional Ownership thing is pretty much re-fried time share.

Here’s the release:

“For the past couple of weeks we have been building the streets in Phase One, so that the trucks with the building materials to build the first homes can climb the hill. It is will take about 3 more weeks for the streets to be completed, but they are ready for truck traffic now. The contractor would have begun building the first group of homes on Monday, except it has been raining the last few days, so we are delayed until we get a couple of sunny days. Literally construction of homes will begin any day now.

As you may have noticed on the website, we have had a significant price increase. This was due to several factors, and is happening in every development in Uruguay. As is the case in all developments in Uruguay we are priced in dollars. Unfortunately, most of the building materials and contractors get paid in Uruguayan pesos. When we set our pricing over a year ago, the dollar was 24 to 1, now it is 18.75 to one. That combined with the general increase of construction materials, like steel, plus inflation has increased our construction costs by about 45%. We had no choice but to compensate for that by increasing prices. Please check the website for updated price list.

To make up for the price increase and still have a good beginning price point, I have started a new program in Sugar Loaf, which happens to be very fashionable in real estates sales today, Fractional Ownership. Fractional Ownership is the shared ownership in a villa with other partner owners. It is not a time share. In a time share you own fractions of time. In Fractional Ownership you own real property or fractions of a home. We are about to start promoting this through International Living on July 29^th. I expect it to do well, because it is a very good price point, US$59,900 for a 1/6 share including the villa, furniture, appliances, and a private pool. This is attractive for buyers who cannot live in Uruguay year round.”

___________________________________

Stay Tuned!

Steve Bowman

The World Economic Forum, based Davos Switzerland, produces a pretty neat report that stacks up world countries for business competitiveness. They recently issued an interactive report for 2007 - 2008 World Economic Forum.

Out of 131 countries, Uruguay ranks 75th, on an overall basis. As you’ll see if you hit the link above, there are several unique variables you can key to see how the overall ranking was complied. One of the more telling variables shows Uruguay slipping to 60th from 54th in IT deployment/effectiveness since the last report.

For those of you coming here to do business, or if you’re just interested in international commerce, you’ll find this a very interesting tool.

This report sums up my feelings about doing business in Uruguay. UY is platform to do international business from, or have a business that serves foreigners within the country!

Stay Tuned!

Steve Bowman

Chris and I in Our Courtyard

As we’ve talked about, 2007 was the busiest year for tourism since 1996. (This is info we got from Telemondo.)

This year at our sister site, Coastal Uruguay, traffic is heavy on the Rental Page, 30 - 50 unique visitors per day. Piriapolis bookings and rental inquiries are above last year at this time by a wide margin.

This is coming to your attention because high season bookings are well underway. This is a good time to make your reservation.

In addition, airfares are still reasonable! We recently booked a direct flight from Miami to Montevideo for about $1,075 -  about 25 more than last year at this time. We noticed in 2007 that people who waited until October to book their high season flights paid around $500 more than we did. As I said, make your move soon.

In case you’re wondering what are good months to visit, here’s my take. There are several great months besides January (high, high season.) To me, December, March and April are the best months of the year. We’re happy to report that March and April were fully booked for several of us here in town last year. Also note that November has some very nice weather as well. Windbreakers are needed a few days of the month, but I’ve burned my hide off in November. (May has some decent weather for that matter.)

And don’t forget, prices are better during the other four ideal months here on the Coast.

February which is Carnival month, is a good high season bet because prices are very reasonable compared with January.

Stay Tuned!

Steve Bowman

I feel like it would be fun to let readers in on the behind the blogisphere curtain. On the business side of it, you may see the advantage of  advertising with us if you have a unique property you want to sell that can be identified in a few key words.

This article is an example. The sole purpose is to maintain our ranking with the search engines for prized terms like luxury property uruguay. While I’m at it, let’s not forget luxury homes uruguay, mansions uruguay and estates uruguay. Oh, I almost failed to mention luxury real estate uruguay, the one set of key words that bedevils us. It is our business to make sure this happens, so there you have it.

Like so many other bloggers, I used to spend a lot of time weaving key words into articles to accomplish what’s been done with about 200 words. No more. Now I do a brief post dedicated to key words once in awhile, and the rest of the time I can focus on a good article without thinking about Google for one second.

Does this work? Yes sir’ee! We have first page rankings for all the above terms but one. A static website could take years to accomplish the same results and a clean sweep of all these terms is not likely.

What does it take to get to the juncture you’re seeing right now? Nine months to a year of work, averaging two articles per week, with stuff worth reading, in a clearly defined niche. That’s all.

Stay Tuned!

Steve Bowman

According to Telemondo, 2008 was the best year for tourism since 1996. The 2009 visitors season is off with a bang as well! We have bookings for next year and inquiries about rentals are up quite a bit compared with last year.

We feel we’ve played a small part by making Piriapolis far more visible in the international market. Our sister publication, Coastal Uruguay, the virtual Coastal Chamber of Commerce, had a larger hand in the success. Of the goals targeted, none is more important than exposing the Coast of Uruguay to European and North American audiences, with the express purpose expanding the visitor’s season beyond the two months (at best) it’s historically limited to. I’m happy to report progress is excellent.

I’ve talked with several travelers from North America and Europe that visited Piriapolis because of these publications. Another thing I appreciate about these people is most of them choose to visit in wonderful times like November, March and April, months South Americans do not come. We’ve also had rugged individuals as renters in May, June and September.

As the tourist season expands, we feel with complete and absolute certainty, cultural, creative as well as investment opportunities in real estate will grow exponentially. This trend has played out many times, many places on earth with the same results!

Stay Tuned!

Steve Bowman

If you’re planning on doing business when you visit our Coast, which many of our readers are, here’s an important tip: Get a Uruguayan phone number!

A foreign mobile service may work in Uruguay, but to do business effectively within the country, you’ll need a Uruguayan phone number. While Uruguay is not a poor country, the average businessperson is not going to call your US number. Won’t happen. In addition, placing any volume of calls at all, could be really expensive with a US cell phone….hundreds of dollars.

There are two ways to solve the problem:

The first possibility is to buy a phone when you get here and hold on to it for future visits (less than US$80.) The second option is to bring an “Unlocked” phone with you. The advantage of owning an Unlocked phone is you can take it with you anywhere in the world and use with very little extra expense.

There are two options for an Unlocked phone. Option one is to unlock your current GSM phone, or, buy an Unlocked GSM handset. In either case, all that’s required is to place a Sim Card (the handset’s brain) from a Uruguayan service provider such as Ancel or Movistar, inside your device. The magic word is Unlocked.

Here’s the skinny on Locked/Unlocked. When you buy a phone from ATT, T-Mobile, or whoever, it’s Locked to work only on the supplier’s network (That’s why the phone is cheap when signing up for a new service.)

Unlocking your Existing GSM Handset:
If you have a fairly recent, or not TOO new/exotic, there are shops in Uruguayan cities that can Unlock your phone. (There are hardware only stores in most countries that can as well.) This is the type of cottage industry the people here do very well with. All that’s required is the software and a little knowledge. The cost is about US$25.

Buying an Unlocked GSM Phone:
Handsets can by purchased online or at wireless hardware retail stores. The specifications are pretty simple; you’re looking for a Quad Band GSM phone. (More bands are better but not really necessary.) A quad band device will function on the four frequency bands that cover about 85% of the planet. A nice handset can be had online for less than US$200. For instance, we bought an unlocked handset, plugged in the ATT Sim, and the service came right up. Mostly, it was that simple when we put in the Ancel Sim.

An Unlocked phone doesn’t “care” what service it’s directed to use.

The Last Piece:
The Sim card can be purchased online or in Uruguay. We bought a Sim card from Ancel in Montevideo for 50 pesos, about US$2.50. The online sites make a big deal (convenience) of buying the card from them before leaving the country….for about US$25. Based on a couple technical twists, buy the chip in UY.

You’re ready for business.

Stay Tuned!

Steve Bowman