Four Overseas Property Deals a Half-day from the US

Wednesday, March 10, 2010

Dear Reader,

When buying a second home, accessibility should always be a major factor. As an owner who travels to your second home only occasionally, the distance from the US may be a minor consideration. Nevertheless, accessibility could easily affect your ability to rent or ultimately sell the property, since renters will find it easier to get to a convenient property, and you’ll have more buyer traffic.

An example of how accessibility can increase value is Costa Rica’s north Pacific coast. In the 1980s, it took 5 hours to reach this stretch of coast from the capital, San Jose. It wasn’t a smooth ride—the roads were in bad shape. Backpackers and surfers braved the journey, but mainstream tourists didn’t. Fast forward to 2002…and with road upgrades and an expanded airport with regular direct flights to the US, the area boomed. More tourists traveling here meant that more tourists fell in love with this coast…and wanted to own a piece of it. Prime beachfront lots quadrupled in value in the three years after the direct flights started. There’s a similar story happening in another part of Costa Rica right now.

You should consider the following with respect to accessibility:
—How long it takes to fly to the country’s hub airport from the US
—How long it takes to travel from the hub airport to your property
—The cost of flights
—Flight frequency

Getting to the country’s hub airport
This is the most obvious aspect of getting to a potential home abroad, and the easiest to predict. But remember, it’s sometimes quicker, easier and more affordable to get to a destination that appears to be farther away. It all depends where you’re traveling to—and which specific location you’ve chosen for a second home.

Take Cuenca, in Ecuador. It’s roughly half the distance to the US compared to Buenos Aires or Montevideo, yet you’ll take longer to get there. Flight schedules from Cuenca usually require an overnight stay in either Quito or Guayaquil—time that is spent in the air when departing from Buenos Aires or Montevideo. I have some samples of flight times to the US from countries in Central and South America, below.

Distance from the country’s hub airport to your home
If you plan on renting your overseas home or selling it in the future, consider that most people are happy with a drive time of two hours (tops) from an international airport. If your home is further away than that, it’s somewhat less convenient for you, and less desirable for your renters and buyers. This could translate to lower occupancy, unless renters are coming from the local market.

If you’re located in a small town or village far from an international airport, check how long the drive is to the airport, along with the condition of the roads in the area. You don’t want to spend hours bumping along a badly maintained road, or find that it’s impassable in rainy season…and neither will renters or buyers. If you need a domestic connecting flight to reach an international airport, check flight frequency and cost.

When living somewhere that’s only accessible by water or air, weigh up the practicalities before committing to it. This adds to the travel time to the hub airport…and will be inconvenient when there is no ferry service due to bad weather, or when local flights are cancelled.

The cost of getting there
The cost of flights can be significant deterrent for homebuyers and renters alike. Coming from Europe, with no-frills airlines creating competition for major carriers, the cost of airfares in Latin America surprised me. There are few budget airlines here, and little competition for the major airlines. Prices can vary; in Ecuador, a national flight may run $60…while in Argentina, it can be as high as $300.

For international flights, an online survey of ticket costs and travel times for round-trip flights to Houston or Miami yielded the following results. I chose a number of countries popular with expats. I used the same travel dates (two months ahead), and the same travel class (economy). You’ll see comparisons where there is a difference of more than $50 between one stop and nonstop options.

Belize City, Belize to Houston: $531, 2 hours and 34 minutes, with Continental.
Cancún, Mexico to Houston: $340, 2 hours and 18 minutes, with Continental ($265 to Miami and 1 hour 45 minutes).
Mexico City, Mexico to Houston: $412, 2 hours and 20 minutes, with Aeromexico.
Panama City, Panama to Miami: $294, 2 hours and 55 minutes, Copa.
São Paulo, Brazil to Houston: $1017, 10 hours, with Continental.
João Pessoa, Brazil to Miami: $1602, 15 hours 55 minutes, multiple airlines, one stop.
Rio de Janeiro, Brazil to Houston: $967, 10 hours and 20 minutes, Continental.
Buenos Aires, Argentina to Houston: $998, 10 hours and 30 minutes, Continental.
Montevideo, Uruguay to Miami: $1292 for a nine-hour nonstop round trip on American that operates three or four times per week. But you can reduce that to $915 for an 18-hour one-stop trip with LAN.
San José, Costa Rica to Miami: $334, 2 hours and fifty minutes, American Airlines.
Managua, Nicaragua to Miami: $267, 2 hours and 30 minutes, Taca.
Quito, Ecuador, to Miami: LAN and American run nonstops that start at $439 and take less than four hours. You can save a few dollars flying Copa, with fares starting at $386—but the flight takes 6 hours.

Flight Frequency:
You should investigate flight frequency, too. A thrice-weekly service might work for vacation trips back home, but would likely prove impossible for business trips or family emergencies.

It’s worth noting that many overseas destinations are just as accessible (if not more so) than parts of the US. Flying from Burlington, Vermont to Miami costs a similar amount to flying from San Jose, Costa Rica to Miami ($322 vs. $334) but the Vermont trip takes twice the time.

Here are our top property picks within half a day from the US, including in-country travel:

Costa Rica: An hour and a half’s drive from San Jose’s international airport, Grand View Estates is a 640-acre project nestled in the Talamanca Mountains.

You get ocean breezes, and views of the Caribbean. The property’s virgin rainforest, five rivers, two waterfalls, and rolling hills give a feeling of seclusion and privacy. Lot prices start at $40,000.

Mexico: Located ninety minutes by car from Cancun, Sian Ka’an sits on a 27-hole signature golf course.

The development boasts three hotels, a choice of dining and entertainment, and the white-sand beaches and turquoise Caribbean water this coast is famous for. Better yet, the property comes fully furnished, and with a fixed rental income—ideal for a hands-off investment.

Ecuador: Another ninety-minute drive, this time from Quito, is Cotacachi. This mountain village is peaceful, clean, and relaxed. It’s also inexpensive, with low-priced properties and a low cost of living (one couple lives here on $600 a month, including rent). A casita in the village, built two years ago, and fully furnished, is available for $69,000. It’s currently rents for $500 a month. Contact (JavaScript must be enabled to view this email address) to find out more.

Belize: Once you land at Belize City’s international airport, it’s a short domestic flight (15 minutes) or water taxi (45 minutes to 2 hours, depending on stops) to Ambergris Caye.

Ambergris is a beautiful tropical island with white-sand beaches and clear azure waters. The main town, San Pedro, has sandy streets where golf carts are the principal means of transportation. You’ll find quaint restaurants, cyber cafés, and friendly mom-and-pop shops of nearly every variety…and condos from $199,000.

When evaluating accessibility, start by looking at the countries on your shortlist, and highlight the specific locations you’re interested in. Then, research the closest hub airport. Check how long it takes to fly back home, and how much it costs. Factor in travel time from the hub airport to your home. Think of potential renters or future buyers—where are they most likely to travel from, and how easy it is for them to get to your property. If you follow these steps, you’ll end up with locations that are convenient, easier to rent, and easier to re-sell if you choose to do so.

Next week, it’s all about language. We’ll highlight two alternative second-home destinations where you won’t need a phrasebook.

Margaret Summerfield