Peru Money Migration in 2021

Aug 4, 2021

 

Today we discover why capital has been draining out of Peru in 2021, then finding it’s way to the USA.

 

Panic has set in among Peruvian high wealth individuals afraid that the new leftist government will limit their ability to manage their wealth. This has caused a massive Peru Money Migration.

We will identify the areas and types of US real estate investments Peruvians are choosing as well as offer the risk-mitigated options that can work for any foreign investor while they continue to live in their home country.

Let’s go!

BAI Capital Accredited Investor Opportunities

 

It’s been months in the making but the new Peruvian President has finally been sworn in. Pedro Castillo, a schoolteacher and leftist political newcomer, was declared the winner of the 2021 Peruvian national election after several months of vote recalculation.

The Peruvian Nuevo Sol (PEN) went careening down last week when the new President Castillo appointed his new inexperienced and leftist cabinet, in particular his appointment of Guido Bellido as Prime Minister. Bellido is a legislator belonging to the most radical wing of the Marxist-leaning Peru Libre party. It was only the appointment of moderate Pedro Francke as finance minister, that stopped the free fall.

After 24 hours of uncertainty and the worst Friday in years on the stock exchange, Peru’s new president, Pedro Castillo, has completed his cabinet, swearing in the moderate leftist economist Pedro Francke as finance minister, and in the process calming jittery investors and anxious Peruvians alike.

 

Here are some recent figures regarding this situation:

On Friday July 30th, The local stock index dropped almost 6% at its session low and posted its lowest close since November. On Wall Street, stocks of Peru based financials Credicorp and Intercorp Financial Services fell 16.3% and 10.1% respectively, while miner Buenaventura dropped 5.6%.

The local sol currency lost 3.6% to the greenback to set a record closing low of 4.068 per U.S. dollar.

The decline was the largest for any day in over seven years despite $293 million sold by the central bank to protect the sol.

 

Peru Money Migration into the USA:

It has been estimated that in the last few weeks alone more than $15 billion US has been deposited in American banks by unsettled Peruvians. What the total money exodus will be over the next few years is anyone’s guess.

 

The current investor fears are twofold:

  1. The country will possibly go marxist and many industries will be nationalized and or see vastly increased taxes.
  2. The deep inexperience of the new government and cabinet will lead to fiscal mismanagement and economic disarray, even if industry stays private.

 

Many developers and investors in Peru ( as well as other Latin American countries) are currently looking for investment opportunities specifically in Florida, for 4 main reasons:

  1. Low taxes
  2. Large Latino population
  3. Strong stable currency
  4. Good market for real estate investments

 

So, what are the main property investment options foreign investors are choosing?

  1. Property ownership for RESIDENTIAL rental income and /or property appreciation
  2. Property ownership for COMMERCIAL rental income and /or property appreciation
  3. Partner in property developments as accredited investor.

 

Property Investment Comparisons:

 

Property ownership for residential rental income and property appreciation

• Returns: ~10.5% – minus time spent on maintenance and tenants
• Risks: Market devaluation or over saturation
• Associated costs: Brokers fees, property taxes & maintenance, tenant maintenance
• Passive or active: Active
• Liquidity: Dependent on market

Property ownership for commercial rental income and property appreciation

• Returns: ~9.4% – minus time spent on maintenance and tenants
• Risks: Market devaluation or over saturation
• Associated costs: Brokers fees, property taxes & maintenance, tenant maintenance
• Passive or active: Active
• Liquidity: Dependent on market

Partner in property developments

• Returns: Annualized @ ~10-12%+
• Risks: Shared risk with developer
• Associated costs: None
• Passive or active: Passive
• Liquidity: 6-7 year investment cycle

 

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Exclusive Investment Opportunity for Americans & Foreigners

 

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Today’s Takeaway from the Peru Money Migration???

Risk and returns….

In times of deep political and economic uncertainty, it can sometimes seem like the only viable option is to hold on to your wealth as cash under the pillow.

Others may make the decision to migrate their capital, and open a bank account in a stable foreign country.

But what returns do these strategies gain?
The first is at risk of currency devaluation, whereas the second sees only wealth preservation at best.

 

There are better alternatives….

 

In fact, there are many viable options in 2021 to gain returns overseas while facing turbulence and upheaval at home.
But to navigate these opportunities, and to ascertain the risks associated with each one, requires careful research and wise decisions.

We do believe that this is time well spent. After all, the returns are in US dollars.

At BAI Capital, in our ongoing articles, we present risk-managed opportunities, facts, figures, and topical analysis, to help you make your best US real estate fund and property investment.

To diversify your holdings & get returns in US dollars – with no extra effort or associated costs, we believe that the best property investment can be found as an equity partner in well chosen US real estate developments.

Book your no obligation and private consultation today, in English or Spanish.

 

*** Photo by Carlos Ruiz Huaman on Unsplash ***

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