Wednesday, December 5, 2018

Buying A Condo In Puerto Rico

Scanning in the signed offer
There are so many resources out there on this subject, but for me, seeing information that is fresh and personal is a huge help when navigating through the process.

We just closed on our condo property last week.  Ours was a cash deal for a bank-owned foreclosure, so it was a relatively simple transaction.  We had cash from the sale of our Townhouse in Texas, and the vagueries that are inherent in the sale or purchase of a "condo" were still fresh in my mind.  But even so, there are some differences in the process when you're looking to buy in Puerto Rico.

The first challenge is to find a realtor who is willing to be a "Buyer's Agent".  In Puerto Rico, properties are listed with a Seller's Agent (same as in the US) and they don't always relish splitting their payoff with anyone.  Most of the sales are completed using only the one agent.  In the States, it is common to contract with a Buyer's Agent, who then goes out and finds properties that suit your needs.  In Puerto Rico, it is more common to do all of that legwork yourself, and then contact the Listing Agent of each property directly, for individual showings.  This can be a very lengthy and tiresome process, but it doesn't lock you in with any one person.  Unfortunately, it also leaves you working with only the agent whose loyalty is to the seller, not you!  Having a Buyer's Agent working for you could actually limit the number of sellers who will consider showing you their properties.  Sort of makes sense, but you would think that half of something is better than all of nothing!

I did all of the property-locating legwork "virtually" by combing through the many online resources for real estate listings.  The ones most used in the US like MLS and Zillow, are also good in Puerto Rico, but not all sellers list on any one central listing website.  This means that you have to spend hours looking at the many different websites, set up "saved searches" that meet your criteria, and narrow down the area you want to live.  Here are the ones we used:  CompraoAlquiler, ClasificadosOnline, deShow,, HomePath and Point2Homes.  There are also websites that list auctions for foreclosures, like, but you really want to be on the island to look at those yourself.  And even with all of these, there are still FSBOs that can only be found by driving around!  Yeah.  It's a lot!  But looking is fun and while many of the properties are cross-listed, many are not, so you have to look around.  It didn't take us too long to zero in on a location, and a property that we liked!

Now be advised that it is not a good idea to do what we did - buy a property sight-unseen - in an area we had only previously driven through.  But in our case, we had friends living in the next municipality over and we know how much they love this area.  We spent many months in Salinas, just to the west, and we loved this whole part of the island.  We did not just go in completely blind.  But there is a lot you can find out by just zooming in with Google Earth, and doing online searches of the places you're looking.  You would be surprised what you find out there, including YouTube videos of people driving through the towns!  So much of the legwork can be done before you ever get to the island in person to finalise your choice.

Because we weren't even on the island at the time, it was necessary for us to find an agent who would work for us.  I learned through one very informative blog post, that many of the realtors on the island are not easy to contact.  For whatever reason, this is TRUE!  I called countless numbers and spoke to only a few.  I sent out emails stating that I wished to do a quick cash deal and nobody took the bait.  Finally I did find someone who was willing to work with me through her own listing website, but she didn't work out.

I was almost ready to throw in the towel and just wait until we got to Puerto Rico on the boat to start trying again.  I even sent an email to my Lawyer to that say that I wasn't giving up, but that we just couldn't find a realtor willing to work.  That was when things started to go my way!

Let me back up here to say that the second most important thing to know about buying real estate in Puerto Rico, is that once you've got a good agent, you need to choose a Lawyer who will work to see that you don't get cheated in the contracting and purchasing phases.  Unlike in the States, all of the negotiations are done verbally here.  You go back and forth on the details of the sale through the realtor until you have a deal.  Then the contract is drawn up by the listing agent and it will be up to your Lawyer, or Notary (as they are also called in Puerto Rico and other Caribbean Islands), to make sure that your interests are protected.  We got very lucky when we found ours.  I emailed several, and spoke to a couple on the phone, but my conversation with Yahira was very detailed and she explained how the process worked, what to expect, and how the inheritance laws of Puerto Rico would affect the transaction.  With the help of a Facebook Group I'm in, I had done my homework and knew what questions to ask, and Yahira helped me understand so that we could move forward with confidence.

We got busy with setting up Power of Attorney for me in Puerto Rico (even though I have one in effect in the US from our recent sale) so that I could sign in Bruce's name.  We included all legal actions so that I could open a bank account on the island and get the utilities turned on in both of our names.  We also talked about some other things that we would need to address if we were going to live in Puerto Rico.  It's a huge decision and there are tax implications, (both property taxes and income tax - IRS Form 8898), there are the aforementioned inheritance laws, so new wills will have to be drawn up and recorded (even if you have a will in the US already), and then there is the important residency status.  We will have to consult a tax attorney when we get settled to make sure we are doing things right.

Anyhow... back to our story... Our Notary, Yahira Caro, sent me the contact information for someone she knew.  Alexandra Amador picked up the ball and ran with it!  Alexandra was the most responsive realtor I've ever had the pleasure to work with (outside of my daughter, of course).  She answered emails and texts.  She ran down every question.  She assured me that things were OK, she kept me in the loop with status reports of things every step of the way.  And she spoke English!  Doing business in a place where Spanish is the primary language is tricky.  Luckily for me, most of the documents were in both Spanish AND English.  I will note that sometimes the translation made it a little funny.  example:  the word "fruits" kept coming up and the only thing I can figure is that it meant something like "fruits of your labor".  Like I said, it was a little funny.

Ok, moving forward now, we've got our Lawyer and our Realtor, AND our list of properties we wished to see - all of which were in the Villa Phi Delta Beach Resort complex.  Alexandra asked us why we wished to be in that location and our answer was simple.  We want to be away from the tourist zone, we wanted to be on the southeast coast where we could be close to our boat, and this property has units like townhouses, which to us was far better than some high-rise condo building, or an apartment-type arrangement.  It had taken a near direct hit from hurricane Maria and was in great shape.

If you are going to do this, you'll want to fly to the island for the showing.  We have the good fortune to know a wonderful couple who saved us that expense by going to the showing of the properties for us.  I was able to watch the walk-through of three units via FaceTime!  Ah, the miracles of modern social media!  We trusted our friend Don's opinion about the condition of the property and Janis gave it the woman's thumbs-up!  We were sold!  By the time we finished "seeing" the last one, we were ready to make a deal.  Alexandra provided guidance about what to offer, and it looked like it would be as simple as that!

Silly me.  It's an island where Island Time is most strictly observed.  I'd heard so many stories of experiences where the deal took months to complete.  Going in I told Alexandra that we had to close by December 7th, or the deal was off.  We made our offer and waited... and Waited... And WAITED!

Finally the bank came back saying they had received another offer and asked what was the highest we would go.  We gave them a number and then we waited... and Waited... And WAITED!  Another week later, the bank told us they wanted more money.  Our deadline was fast approaching and I could feel the deal slipping through my fingers.  We weren't going to pay what they asked.  The place had been stripped of the air conditioners, ceiling fans and the outdoor cooktop/range from the patio.  There were no appliances and it was going to cost us a lot to replace all of these costly items.

Alexandra gave me estimates of the costs involved, and so I countered with their offer, minus the cost of replacing the missing items.  I also asked Alexandra to make an offer on one of the other properties in the Villa Phi Delta complex, just in case we had to drop this and run.  They took it!  The bank agreed to our amount and it was only a couple thousand over what we originally expected to pay.

Soon I had the official offer document via email.  We read over it, Yahira looked it over and certified that it was in accordance with what we had agreed upon verbally, and we printed it all out, initialed, signed and scanned it back in for emailing back to Puerto Rico.

Ok, so now what?  Once the offer was received and accepted officially, we had to pay the "option" deposit, like escrow in the US.  This is paid to the listing realtor.  Wait, WHAT?  Nope, that's the way it is.  So I wired the money as directed, although somewhat nervously.  My mind kept throwing doubts at me, but I squelched them as best I could.  It was a nerve wracking time.

After a few more days during which the bank did who-knows-what... we got a closing date.  While that was on the offer document, it was not completed when we signed.  But they agreed to close on the 5th of December at my request.  That would give us a couple of days to work with before the weekend if things didn't go smoothly.

I purchased my flights and made my travel plans - then one week later, off I went!

Villa 5A!
I had the right to a final walk-through to make sure the property was still as expected before I went to closing. The night before closing day I received the closing document that told me how much money I would need after the prorated HOA dues, insurance and other closing costs.  I set up the wire transfer for the following day.

When I arrived at the property I was so nervous, thinking of all the things that could go wrong... primarily that I would not love the place as much in person as I did online.  But my fears went unrealised as I set eyes on what will be our new home in just a few hours.  I. Loved. It!!

It is clean, and solid, and I can see us living here happily ever after!  We have a beautiful pool and a place for our family to come stay, and best of all... we have our own BEACH!  Yes, I know it's not actually ours.  In Puerto Rico, all beaches are public to the high water line.  But there is only one way to get here other than through our property or that of the four neighbouring condo properties... and that is by boat!

The only thing standing between me and owning this lovely piece of paradise, was that wire transfer arriving on time!  We locked up and drove to Ponce for a quick lunch and the closing, scheduled for 1pm.  I received a phone call from my bank at noon.  They wanted to verify that this transfer was not fraudulent before finalising it.  While Puerto Rico is officially "U.S." in this context, it is still a grey area, so I appreciate my bank being cautious.  I answered all of the questions and crossed my fingers that the money would get here before we were done with the closing, or I wouldn't be receiving any keys today!

We walked into the office and sat down to await the arrival of the Notary who would be processing the closing.  Two minutes before she arrived, Alexandra got the proof of funding we were looking for!  I could now breathe again.

See this?  That's the whole stack!
The Notary arrived and we all moved to the table.  She took out a very short stack of papers - another huge difference in doing business in Puerto Rico vs the US.  I read through every word.  She answered my questions with precise explanations, and suddenly I was initialling and signing away.  It was done!  Bruce and I now own this perfect little place!

Ok, I will admit that paying cash made most of the problems go away and I have heard all kinds of stories about people waiting for their financing, waiting for inspection reports and surveys.  All of these things are available in Puerto Rico and it is advisable that you get them.  But... our property was a foreclosure - as is - and our friend gave it the green light.  It is built solid and has just come through a major hurricane with flying colours.

The property has been repaired and is in better condition than it would have been had there NOT been a recent hurricane.  We feel confident that if it could withstand Maria, it can take a lot.  We've been asked why we were in such a hurry to buy... why not just wait until we get there with the boat in the new year?  Well, these people obviously do not know ME... but it was actually Bruce who drove this deal.  It was him who wanted to live in Puerto Rico.  It was him who wanted this deal done pronto!

Our thinking is that it is the perfect time to buy.  There are such awesome deals out there and we didn't want to let this one get away.  We are committed to the future of Puerto Rico.  The more we read online, the better we feel about our decision.

As with most things, the things you read online and see on the news are either biased or just giving you part of the story.  Yes, the government has its problems, but so does ours.  We see so much money being spent on repairing and improving the island.  We think that the secret is going to get out and the economy will improve for all.  Conversations with businesspeople on the island while I was there have confirmed this positive attitude.  Yes, it will take some time, but we will be here waiting for it.  We will bring money to the island, not much, but our small part will be passive income in that we're not taking any jobs away from a Puerto Rican.

What about the language barrier? Well, that is a real concern.  I am working hard on my Spanish but it can be mentally taxing.  I know that it will come and I look forward to being bilingual.  Lots of people speak English on the island, but in the area we'll be living, there are fewer of those.  I embrace it!

What about property insurance?  I had a similar experience in finding an insurance provider for our property.  I learned a lot about condo insurance and there are some differences in that coverage as well.  I had a long conversation with a broker and he soothed my fears.  What I found out was that after Maria, the industry HAS changed.  But he said that generally, the prices for policies increased a little bit, but the deductibles for named storms has increased.  I also found that they insure for earthquakes as well here in Puerto Rico, and that coverage is as pricey as that for Windstorm!  With all these perils, I was surprised to discover that the policies were similar as to US policies and premiums were quite a bit less than I expected.  Less than we paid in Texas for similar coverage.  I also asked about how good the policies were... It means nothing to have coverage if the payer will figure out how to NOT pay your claim.  People who document their belongings adequately and provide a comprehensively put-together claim will get paid.  Those who do not... won't.  Guess which one of those people I will be!  We ended up buying a personal policy from the broker that sold the Master Policy for the HOA.

There are so many other things to take into consideration when thinking of buying in Puerto Rico.  The internet is full of awesome resources and I've bookmarked some that I've found useful and I will happily answer any questions you have.  If you disagree with our decision, please quietly sit back and wait for our plan to fail so that you can have your I-told-ya-so!  Salud!

General Information:
The Puerto Rico Report - lots of good information and a Facebook page so you won't miss a thing!
Renewing the Marbete (similar to vehicle registration)
Getting a Driver's License
More advice about getting a Driver's License
Property Laws
Is this a good time to buy in Puerto Rico?
Home prices have plummeted
Crime Map
PR Government data website
Reasons Americans Retire to Puerto Rico
Cost of Living on Retirement
Retiring Tips
Why is Puerto Rico in debt?
Origins of the Debt Crisis
City Guides

Insurance discussion
Condominium Insurance Law
Guide to Condo Insurance

Bonafide residency in a US Possession tax chart
Hate Taxes? Move to Tax-Free Puerto Rico!
Tax Summaries PWC Taxes on Personal Income.
American Retirees Abroad - A good forum discussion about taxes - Another good forum discussion about retiree taxes
Tax Incentives for residents
Domicile vs Residence
Taxes for business owners
Who is a resident of Puerto Rico?
Property tax authority CRIM

Importing the boat:
Forum discussion on Boater Ed
DRNA - The actual document regarding importing the boat.

Exodus of Banks I had to make sure that the bank I chose was healthy!

Hope for the future:
100% renewable energy!
More on Renewable Energy!
Energy legislation
Solar powered air conditioners!  
Handgun Laws in Puerto Rico

Thursday, November 1, 2018

Cost Of Cruising Year Five

I give up.  Never again will I say that NEXT YEAR we will spend less!  It just never happens.

By this time, we've actually learned to cruise more economically... We spend less on food that gets thrown out, we don't provision in huge quantities.  We anchor out most of the time and have even cut down on transportation costs by learning to take the local bus system instead of renting a car.  Our entertainment costs aren't even that big!  But then the costs for keeping the boat in good shape rear their ugly heads and all our frugal ways are for nothing!

It is hard to believe that we have been here in Grenada for an entire year.  We have been either anchored in one of the bays, tied to a mooring, or sitting high and dry on the hard spending mucho dinero on boat projects!

It is easy to forget how the money is spent, so I'm really diligent at keeping records.  I enter every cent we spend into a spreadsheet that is totalled at the end of each cruising year.  This year we made a discovery that has saved us hundreds of dollars!

Using credit cards is easier than you would think in the islands.  Most places take them and we have routinely used them for groceries, dining out, bar tabs and anywhere they're taken so that we could rack up the rewards dollars and keep easy track of expenditures.

In the beginning, our Bank of America Travel Rewards card truly had no foreign transaction fees.  And while it still technically does not... they have found a way to sneak them in under our noses.  Some months ago, I was reconciling our bank statement and realized that the amounts weren't adding up.  The charges on our receipts did not match what was going onto the credit card.

It took me a while and more than a few phone calls to customer service ~ who, by the way, have NO idea what is going on ~ but eventually I realized that while technically NOT applying a separate transaction fee for exchanging the foreign currency... (drum roll please) they were applying a very unfavourable exchange rate to each charge.  Doing the math... I learned that using our credit card was costing us as much as $300 US some months!!!

Immediately we stopped using the credit card and changed over to a cash-on-hand basis.  While we are no longer building large piles of rewards bucks, the money we save in one month by using cash is about equal to a year's worth of rewards!  So if you're using a credit card in the islands, check your receipts and don't go by what the customer service people tell you.

So, let's take a look at this year's numbers. Our categories have remained relatively consistent from year to year, showing you everywhere our money goes.  This year we had a record amount of expenditures for the work we had done on the boat.  Our boatyard bill was big, but we did a lot starting with the bottom job, where we took the paint off down to the fiberglass and had a new barrier coat applied... to the cosmetic work we did on the freeboard part of the hull... to the preventative maintenance we did on the engine, rudder post and prop shaft... it all added up!  Then we replaced all of the standing rigging and lifelines, as well as some of the running rigging.  We topped it all of with a nice new survey from Neil at Mango Projects!  We highly recommend him if you're in need of a survey.

All of these boat related expenses can be deducted to leave you with the costs of simply living in Grenada.  I guess you can't really call it cruising, since we haven't moved the boat further than the next bay over for the entire year... But you know what I mean!

So, without further ado...

Next year may be very different if our plans for Puerto Rico pan out, so this might be the last year that our cruising costs are 100% time on the boat.

You can take a look at our previous years and compare:
Year Four
Year Three
Year Two
Year One

Sunday, October 28, 2018

Escape To Calypso Island

Fortunate are those who can call this "commonplace"
Spend a year on an island in the Carribbean and you might find yourself looking for new and interesting things to do...  Life here in Grenada has become our new normal.  The thrill of exploring is gone... we've seen it all!  But wait!  There's something new here!  The company that revealed the inner artist in me this September, is at it again!  Only this time, they've gone all out and added a lovely daysail to a tiny little island called Calypso.

Wall-to-wall sunshine and balmy breezes today!
Unfavourable weather on the originally scheduled day, caused the lovely people at Sip&Paint Grenada to reschedule it.  They are always trying to come up with unique and special things, and I have to say that with this one, they have set the bar pretty high. I couldn't believe my luck when this Sold-Out event got rescheduled and new spots opened up for us!

It's nice to be a passenger and let someone else do the work!
There is an anchorage near Calypso Island, but I've heard that the island is privately owned and that their upscale restaurant is open for special events only.  I jumped at the opportunity to see it with friends, and of course my second painting lesson ~ Spice Island Rocks! Add to that, a relaxed coastal sail on a catamaran and the stage was set for a fabulous day being spoiled and treated like a regular tourist!

Bottomless wine glasses!
We took the public van to Grenada's beautiful and historic Carenage and boarded the light catamaran in the mid-morning sunshine!  The bar was open and the drinks poured for the short motorsail along Grenada's stunning western coastline.

Small villages dot the coastline 
The sun-dappled the mountainsides for a dramatic effect

Thanks for the photo Maureen!

Soon our destination appeared as a tiny bump on the coastline
Coming around to the landing side, we could see that this bump WAS an island separate from the mainland
We were glad we were not in charge of manoeuvring this vessel to the dock!
Tricky currents and shifting winds did not deter our dauntless captain and crew!
Soon we were secured and ready to disembark!

A steep stairway leads from the landing dock to the top of the rock where the lovely and rustic restaurant awaits

It really is just a pointy rock mound!  It's like being in a treehouse, only on a ROCK!
With shaky legs, we reached the first landing of this lovely Private Island Eco Resort.  The tables below were laid out in readiness for our painting session, but first... we were treated to an open bar, a lovely buffet snack and a swim in this beautiful little lagoon.  We were feeling pretty special already...

Did someone say "Open Bar"???
Healthy and fresh snacks, beautifully laid out and all for us!

We enjoyed the shaded deck and the food, then one-by-one, we splashed into the crystal waters below

The snorkelling was refreshing!  We explored our little cove, then got out and showered with a freshwater rinse.  There are facilities for changing clothes, and then we made our way back up to the treehouse for more drinks... AND a beautiful lunch!
Feeling unbelievably pampered right now!

The camaraderie, the food, the VIEWS!  It would be enough if we went home right now...

But it's not over yet!  As the sun began her downward trek, it was time for us to retire to the lower deck for a quick lesson in rock painting!

We were each given two rocks and a palette... oh, and wine.  More wine!

Instructions and supplies were doled out.  We would first paint the rocks with a white layer to help the colors to adhere to the porous rock surfaces.  Bruce declined to paint rocks, so I had four instead of two.

We were given a guide for a nice sunset scene, and a blank sheet of paper to use in creating our second, individual rock masterpiece.  I've gotta say that I did OK in reproducing the copied piece, but I was completely inept when it came to coming up with my own creation.

Bruce hiding out in the treehouse near the bar!
Maureen might have helped me with my creative block...

It was such fun painting the rocks, even if I did feel completely stumped.  The rocks are to be left somewhere on the island for others to find.  They have labels on the back and hopefully, when they are found, their new owner will post about it on the Spice Island Rocks website.  So considering that these would be keepsakes for someone... I made my rock into a nutmeg to represent Grenada, the Spice Island!  My second extra rock - well I drew a blank.  So Maureen painted our logo on it!

If you're in Grenada, be on the lookout for these rocks!

All of the rocks were displayed when we were done!
The setting sun marked the end of our special day.  One last surprise, a raffle with lovely prizes topped off a perfectly wonderful event.  We all took our rocks and retired to the top deck for another glass of wine while we awaited the return of our catamaran.
We were scheduled for a "sunset sail" back to St. Georges... but what's up?  The sun has already set!
Could this be them???
We chit-chatted and we drank and we waited...
And. Waited.

Darkness fell and people were beginning to get jittery.  We stared out into the darkness looking for a light that might be our boat.  Things got a little silly (open bar) and we really felt badly for the organisers of this event.  They were very professional and very apologetic about the fact that our boat was not coming!  Some people were irritated, but we are used to changes in plans, especially when it comes to boats!

It had been a long day and people were beginning to get really tired.  The organisers were in contact with the boat and kept telling us they were on their way.  At some point we almost stopped believing them.  Bruce and I were done drinking and went down to the dock to wait.  We joined our friends who were having a wonderful time laughing and talking...  Eventually the boat did come.  We boarded and it was a more somber sail, but we made it back to St. George's.  Unfortunately for us, there were no more public busses running and we had to impose on another tired traveler for a ride back to our dinghy.  Thanks to Vanessa (and Vanessa's husband) for the lift!

Like a space ship, the boat came out of the dark night
Funny how our "Escape TO Calypso Island" sort of became an "Escape FROM Calypso Island"!  But all's well that ends well.  The nice people at Sip & Paint Grenada did a wonderful job of putting this event together and we were completely pleased with the value and the venue.  Maybe some kinks need to be worked out with the transportation, but it's a boat... and you can't trust them!

What a wonderful day!  We got home very late, but it was a grand adventure!  And oh yeah, there was a drone flying over us throughout the day!  You can see it by clicking Sip, Sail & Paint!