When your investments are taking major losses, and you’re having trouble dealing with inflation, thanks to the spiraling cost of energy, food, health care and just about everything else, it’s natural to look for high-performing investments. Unfortunately, there are very few domestic investments that are performing better than the rate of inflation. Investing outside the US may provide the best opportunity for an inflation-beating return.

Looking outside of the US, you can find excellent performance in some sectors. For bond funds, you’ll give up the security that the US bond market offers. If you prefer mutual funds, you won’t find any guarantees on those no matter which side of the border you choose!

For a combination of security and performance, one of the best choices is real estate. US real estate markets are reeling from the effects of the sub-prime mortgage disasters, as well as other pressures like job losses, growing foreclosure rates, substantial oversupply in the market and more. The Mexican real estate market is not experiencing these problems, largely because the system of purchasing property here is remarkably different from that in the US. (Until recently, mortgages were not even available!)

Mexican Federal laws have established a safe mechanism for foreign investors to purchase property here. Ownership rights are respected, provided that the fideicomiso method of holding land is used. Ownership trusts are established for a period of 50 years and are renewable for an additional 50-year term. Land in trust can be included as part of an estate, so properties can be passed from the primary beneficiary to a successor beneficiary easily.

The current rate of appreciation in Puerto Vallarta is about 10 percent per year. This well exceeds the rate of inflation in the US, providing an excellent return on investment. Additionally, the property can be improved and held and used by the investor/beneficiary, used as an income-generating property, or it can be sold for a quick infusion of cash.

Photo Credit: CJ Horton