This Real Estate is a Steal By Ted Baumann, Offshore and Asset Protection Editor Knysna, South Africa – Most people know South Africa as the land of gold mines, Nelson Mandela and the Big Five wild animals. But did you know that it also has the highest concentration of seaside golf estates in the world? Or that it's a world leader in swimming pool design and technology?
Since it's my second home, many Sovereign Investor readers and Plan B Club members ask me about South Africa as a potential offshore residence destination. After all, if I liked it enough to become a citizen, it must have some serious charms.
It does indeed. And one of them is the opportunity presented by luxury real estate on the country's south coast … a region most people have never heard of.
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And They Called It a Garden | View from my home in Cape Town | The town of Knysna is located on South Africa's southern coast, between the major cities of Cape Town and Port Elizabeth. Knysna lies along what is known as South Africa's "Garden Route," a stretch of the coast named for its scenic beauty and oceanic temperatures. It's a lovely place, famed for the tricky "narrows" leading from the sea, yellowwood furniture, art galleries and farmed oysters. And it's at the heart of one of the most unusual real estate opportunities in the world.
The "Southern Cape," as the wider region is known, is where Africa comes to an abrupt end. The coastline is marked by high bluffs overlooking wide white beaches with warm, pounding surf. The next stop isn't until Antarctica, some 2,500 miles to the south.
The region is unique in South Africa in that there are no "ancestral homelands." When Europeans arrived in the 17th century, it was inhabited by bands of cattle herders and hunter-gatherers spread out across the countryside with no fixed homes. As a result, it hasn't been subject to the complex post-apartheid land claims brought by peoples in other parts of South Africa. Many farms established by Dutch settlers hundreds of years ago remain, but much prime coastal land has been converted to high-end residential and recreational uses.
Investors started developing coastal golf courses and residential estates along the Garden Route in the late 1990s, due to South Africa's combination of natural beauty, a moderate climate and property security. Famed South African golfers like Gary Player, Ernie Els and Retief Goosen provided design input, and some of these courses are now famous in their own right for their spectacular views and unique layouts. Major global tournaments are held here annually.
Interspersed between the golf estates, coastal towns like Plettenberg Bay, Wilderness and Sedgefield boast numerous beachfront hotels and condominium developments. They're also home to many artists and other creative types, drawn by the inspirational environment and relaxed pace of life. There's even a beachfront castle or two, built by eccentric gold-mine barons from Johannesburg in the late 19th century. No Barriers to Paradise South Africa is a relatively open country for investor-immigrants. There are large colonies of European vacation homeowners and retirees, where snowbirds from England, Germany and other northern countries spend some or all of the year.
There are also populations of Portuguese and Greek immigrants and their descendants. This has given the southwestern part of the country a distinct Mediterranean feel, reinforced by a climate strikingly similar to the south of France. Vineyards, orchards and olive groves are everywhere.
Obtaining permanent residence here is easy. If you can demonstrate a net worth of $650,000, pension or other ongoing income of $1,750 a month, you're welcome to move on in. There are no barriers to foreign ownership of residential property.
Vacant plots in coastal estates can be had for under $150,000. Finished houses with plots can be had for $250,000 to about $850,000. Or, if you don't want to own a home outright, there are fractional ownership (i.e. timeshare) opportunities. Loans for up to 50% of property value are also available locally, and ownership via non-South African trusts, LLCs and other corporate vehicles is possible.
Note, though, that if you obtain permanent residence in South Africa, you will become subject to exchange control regulations, which will limit how much you can take out every year if you decide to sell your property. Non-residents can take their sale proceeds (minus capital gains tax) out without obstacle. Returns on the Horizon The key opportunity is that South African properties are being sold for less than they're worth at the moment. The South African luxury property market in particular has been weak for some time, due to diminished foreign demand thanks to severe economic conditions in Europe — but we know these economic conditions won't last forever.
This presents a unique opportunity for Americans to invest in properties here. You could purchase a fabulous beachfront home or condo for a song, use it as a second home, with the potential for major returns once the European economy rebounds, as it must eventually.
I've never regretted my decision to become part of the South African community — and if you decide to spend your money or time here, you won't either.
Kind regards,
Ted Baumann
Offshore and Asset Protection Editor P.S. Real estate is one of the best investments you can make today, and South Africa is just one of many great places to buy it overseas. To learn some of the other places we recommend you invest in foreign real estate, click here. | 
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