#328 – Boating in Latin America: Costs, Challenges, and Opportunities

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came up to play and now as I wonder Hello there all you expat wannabes I'm Johnny Mueller and you're listening to the expat files living in Latin America the show that tells you just what it's like to live Work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started I know there's a lot of boat lovers and boat owners out there who just love to come and live down in Latin America forever whether they just have a houseboat moored at a dock as a permanent residence or as a Vehicle to get around from place to place looking for that elusive best piece of paradise in fact one or two shows ago

[00:47] I spoke about going through the Panama Canal as you know That's a lifelong dream for a lot of boaters in fact a year or so ago One of my seminar attendees mentioned that coming down with his boat from the states was exactly what he was planning to do since if I remember Correctly, he's already living on his boat somewhere up in, California So he's completely in tune to what it's like and what it takes to live that kind of life though Of course, like he said he knows that it would be Exponentially cheaper to do the same thing down here in Latin America. So he came down looking to explore that anyway for all you guys And gals interested in doing the boating thing down here whether living on a boat yourself or having a business Involving a boat or whatever. Let me start out with one of the many emails I get about the subject and this one comes from mr. P another new friend and recent expat wisdom seminar attendee, too

[01:35] He says hey Johnny you mentioned squatter issues with absentee Landlords and landowners in Latin America, however, what about owning a boat? What about renting boat slips or actually owning your own dock and the types of boats that might be good down there, etc? How about help and parts and insurance and maintenance etc etc any information you could provide to us? Landlubbers would be greatly appreciated Thanks, mr. P Now I think to start the best way to answer some of those questions is to read a very recent email I got from yet another new friend who came down to an expat wisdom seminar who actually brought a boat down from the states And now has a successful business doing fishing charters and cruises with it down in Nicaragua on the Pacific Coast So he's really the expert. Let's hear his take on boating and the gringo boat business and again

[02:26] I'll paraphrase this a bit. It starts Hey, Johnny the info you recently gave about the Panama Canal was pretty accurate I think I ended up spending about three thousand five hundred dollars myself To get my boat through and that included line handling helpers bumpers and paying someone to complete all the necessary paperwork the funny thing is that as Usual since we're in Latin America. We couldn't get a straight answer from anyone before we headed down to the canal now Of course, I did hear that would be the case from other boaters Who's been through and sure enough we had no clue what it would really end up costing until we actually showed up now as you know My Spanish is pretty good And I even called the canal office one day and after being put on hold for about 20 minutes

[03:12] They came on the line and told me they were closing and I'd have to call back the next day Typical Latin customer service or lack thereof, huh? Now all the information I'm about to give you about boats is in regards to boats and the boating business in Latin America Not the Caribbean islands. So here goes stating the obvious owning a boat can be a challenge However, like they always say price Overcomes objections and since in Latin America, it's so cheap to keep and maintain a boat Compared to up in the states that is it can be very very worthwhile If you have the patience and a large supply of Advil in my case on the way down from the states To pull my boat out of the water in Turks and Caicos Islands

[03:59] It's about four hundred dollars each way and it could be cheaper if I coordinated the haul out with another boat owner now in regard To mechanics every coastal town with a congregation of boats will have their local mechanics They're usually pretty handy and can work on both diesel and gas engines The going rate for mechanics in Latin America get this is around 20 bucks a day To which I'm gonna add the going rate for a boat mechanic in the states is at least 20 bucks an hour And this is me Johnny again. In fact 25 or 30 years ago up in Chicago That's what the boat mechanics were getting on Lake Michigan 20 bucks an hour minimum So I can certainly vouch for that. So at 20 bucks a day down here in Latin America When it comes to maintenance, that's an impossibly huge savings. Anyway, let's go on here

[04:47] He says in our case since we run a business We need the boat to be operational at all times So we pay our mechanic a little extra to work through the night when necessary So mechanics are dirt cheap, but as for parts now, that's a different story Depending on the size make model, etc of your boat Usually you have to have that stuff shipped down from the states and this might sound strange But the absolute best way to do that is to fly it down yourself For example, we needed a $200 cable this summer and after the shipping cost the lost business and import duties it cost over $5,000 Amazing, huh? Had I known that I would have bought a first-class plane ticket and shoved it in my suitcase a no-brainer, huh?

[05:35] Now in the case of needing rather big and heavy parts shipping might be the only option but always always always have a spare supply of commonly used parts on hand like water pumps filters belts starters alternators, etc Also, I'd advise the owner to spring for an in-depth manual specific to his boat and hold on to it at all times if the need arises You can just show it to the mechanic and for those extremely large repairs like engine replacement For example, the owners should always plan on heading to Panama Costa Rica or Mexico to have that work done in that respect They're first world capable in those countries. Not to mention flying down a mechanic from Fort Lauderdale is always an option

[06:20] You know what the word BOAT stands for right? Break out another thousand and as far as docking and security goes Anywhere that has a marina usually has slip space that is secure Most anywhere in Latin America the owner can expect a much much lower rental rate on a slip than in the States However in many developing communities like where I am in San Juan del Sur, Nicaragua on the Pacific Coast There's no available dock space at all. In fact, there is no dock presently to permanently park about But there is a small protected bay where everyone mores their boats some distance out in the water Now you're not using your own anchor to park it out there But what's provided our 55 gallon drums filled with concrete sunken into the seafloor and over time

[07:10] They've sunk down into the sand and they serve as our anchors That's what we moor our boats to usually in the bay. There are a few extra of these things around So a cruiser coming in can usually hook up for a short-term use for as little as 20 bucks a day Where my boats moored in San Juan del Sur Bay all the vessels have their own dedicated moorings those 55 gallon drums Which they use to hold their boat on a nightly basis I believe we pay a hundred bucks a month for the privilege of keeping our boat there and this is Latin America So the port captain's always coming around asking for a new hard drive for his 1989 computer He pesters us boat owners for t-shirts for his kids, etc Etc. As far as security goes we pay a watchman to sleep on our boat as do all other boats of significant value

[08:00] We pay him about eight dollars a night and even so he takes great pride in that job He's an older guy who spent his entire life on boats lobster trapping and crabbing a real old man in the sea type So he pays very close attention to everything and is the first to notice if something is out of place In fact, he refuses to sleep down below in the bedroom And when I ask him why he says how can I accurately watch your beautiful boat if I'm down below sleeping? At which point I just shut up and give him a high five Now like I mentioned our boats are way out in the Bay water So we have to get there somehow so getting to and from the boat requires a smaller boat such as a dinghy However, it's really not feasible to have your own personal dinghy and keep your eye on that, too

[08:47] Since you have to worry about the safety and the sudden disappearance of your dinghy while you're in town running errands or whatnot Where I have my boat business in San Juan del Sur they offer a water taxi service Just to shuttle people to and from their boats from 6 a.m. To 6 p.m We pay them about 75 bucks a month for unlimited use of that service and we use the hell out of it now about diesel and gasoline fuel Now getting that can be tricky if someone has a large boat which consumes tons of fuel They can easily Coordinate with a fuel truck service and meet the truck at the dock the smaller engine boats and sailboats like mine can just use 5-gallon Jerry cans to shuttle fuel to their boats

[09:33] One small hassle is there's one gas station in San Juan del Sur and they're known for having crappy diesel So we end up sending a deck hand to revus a nearby city about 30 minutes away in taxi To get 50 gallons of fuel at a time Since I have a sailboat that usually lasts us about a few months Even when running fishing charters 20 days a month that said I realize these are not ideal Conditions for certain snobby high-maintenance boat owners from up north But I assure you the sailing and fishing on the Pacific side of Nicaragua is phenomenal the wind is always perfect and the seas are always smooth and you can usually latch on to a sailfish with very good probability and

[10:20] Talking about insurance. I would recommend getting and maintaining a US insurance policy if you have a boat I'm sticking with that so far since I've done no actual research on boat insurance in Latin America But do make certain that your US insurance policy covers your location most insurance policies have clauses which dictate just where your vessel can go while still maintaining your coverage as For me I had to have a special policy to cover my transit from Fort Lauderdale through the canal and up the Pacific side of Nicaragua and once we got to San Juan del Sur I Cancelled that policy and established a new one which covers the boat up and down the Pacific coast of Mexico and Central America Another thing to note is that the Pacific side of Central America is usually pretty safe from hurricanes

[11:10] Well, certainly much safer than the Caribbean side. Anyway, signing off for now. Hope all of that helps Brandon. Oh Right. Thanks for that detailed report Brandon We appreciate it. And by the way for those of you who just might be stopping down to San Juan del Sur Nicaragua Just to check things out. It is a fun little low-key spot That's still well off the general tourist radar But on the grow with echo tourist backpacker types and surfers and if you like beach towns I highly recommend you have a look and if you're in for a little sailboat cruise or a charter fishing trip I highly recommend you check out Brandon and here is his website Www Nika sail and surf calm. That's Nika and Ica sail and surf Calm Brandon's a great guy and you won't regret it

[11:58] Now just a few comments myself about what Brandon has to say if you were paying attention and thinking about it There were a couple of great expat business opportunities that just stuck right out for one He says there's only one gas station in town and the diesel is crappy So why not be the good diesel guy and secondly a town like that with about 20,000 people a beach town with boats and surfing and water sports and a nice calm Bay Doesn't have a pier. Well, I bet the first guy or group of guys that puts one in is gonna Just clean up not to mention if you have a pier you can put a gas pump or two on it And three while he was mentioning that everyone there who has a boat that mores it out in the harbor pays about a hundred Bucks a month for the privilege. Well, why not sink a few of your own 55-gallon cement barrels and either rent them out yourself or

[12:46] If you don't have clients to make that work still boat owners can save themselves that $1,200 a year mooring rental fee by sinking one of those cement barrels themselves for their own use Now I assume the town's little municipality owns the right to the frontage of that water and you'd have to certainly get permission for all That and for all I know it's the municipality itself. That's making the rent off of those concrete in a barrel moorings But what about private individuals who own land around that Bay or have houses? They have certain water rights too And why not partner up with a local that has water frontage for those kind of projects if you can Anyway, those are just a few things that come to mind and although there might be snags and hitches that makes some of that Stuff not feasible. If you're thinking of low-budget business ideas, you got to start somewhere, right?

[13:34] And by the way, if you worked out that little pier business, you'd save another 75 bucks a month Skipping that dinghy shuttle service to and from your boat, too So if your boat was docked on a real pier, that would be a cool $900 savings in itself and I'm not talking about anything fancy No big concrete and metal piers here All you have to do is see all the other little piers up and down the coastal towns and you'll see those are very low budget Operations, but they do the job. All right, and by the way about 18 years ago I lived on the Pacific side of Costa Rica in a little town called Manuel Antonio right next to a little fishing town called capos Which was the first town you came through about a mile before you ended up at the end of the road in Manuel Antonio whose claim to fame was its estuary and national park and back then they were sleepy little tourist and fishing towns with

[14:24] Little mom-and-pop hotels and bed-and-breakfasts that had cheap vacancies all the time In fact, I remember you could rent a beautiful little bungalow in a complex with a pool About a block or two from the ocean with air conditioning for like 25 to 30 bucks a night It slept four had a private bath and a kitchenette too And now it's a hundred easy not to mention they'll slap a 12 percent tourist tax and a 15 Vat tax on top of that too. So you're looking at over 125 bucks a night or more So it's no longer cheap and laid back. It's just crawling with gringo tourists Anyway back then I actually owned half of a charter fishing boat with another expat gringo from california Now he was the expert fishing guy. Not me

[15:09] I was just along for the ride And I guess he took me on as a partner after he found out I owned half interest in a 30-foot cabin cruiser On lake michigan when I lived back in chicago talk about shoveling money into a black hole up in chicago You got about a three if you're lucky four month season where you can actually take a boat out and not freeze your ass off And even when I told him that I rarely went out on the thing back in chicago since it was too damn cold He felt I had enough boating experience to take on as a partner But he was wrong because I can't even swim or I should say I can barely swim enough to save myself Maybe and I don't want to test that theory either Anyway back then 18 years ago. My costa rica boat owning experience was not a pleasant one Oh, my gringo partner was fined and he just loved that boat

[15:55] But even back then when the prices were reasonable in costa rica the gringo advantage was already fast disappearing In coastal regions and in beach towns all the little ways the locals mechanics parts people government functionaries and otherwise Nicked and gouged boat owners made that a losing proposition, too Our little charter business just couldn't seem to make any money You see the thing had two inboard gas motors that were hogs. It was not a sailboat That's where you really save the money because gas is always a little bit more expensive in latin america than it is up in the states Not to mention our charter cruise competition were gringos with other nice cabin cruisers, too And if I recall back then we used to charge 250 a day to take the boat out all of us gringo charters And I think there were two or three of us had the same pricing

[16:41] However, the locals who were also our competition had very low overhead because they had small 16 and 18 foot dinghies With little outboard motors on them to me They look like little corks bobbing in a bathtub But as far as I know they always brought their clients back home alive and they didn't charge 250 to go out They charged about half a hundred and a quarter Which sounds like a great deal to a lot of low budget tourists who've never been out bill fishing before So in many ways it was about the price So we lost a lot of business to the locals But I can tell you this to guarantee a good shot at the billfish you had to go a couple of miles offshore Straight out into the ocean so far out that when you look back toward the dock you couldn't see it In fact, you couldn't see land at all kind of scary And believe me when you're in that big wide ocean those little 16 and 18 foot dinghies got tossed around like toys

[17:31] And that's why so many low budget gringos who hired those guys came back sick as dogs with some of them scrambling to kiss Mother earth as soon as they got their wobbly legs back on the ground Because you see once out on one of those things Most people will never do that again And having to go that far out in the ocean back then some 18 years ago already meant that those big fish were getting somewhat depleted And nowadays I understand the deep sea and bill fishing off costa rica is pretty much shot anywhere close to shore And yes, you can still charter a boat and get fish But you'll spend the first hour going straight out into the deep ocean. You got to go where the fish are, right? That's why if you're interested in that sort of stuff You're much better off with a guy like brandon in nicaragua or some of the gringo charters in guatemala Where you're pretty much guaranteed to catch something every time not to mention you only have to go out about half as far into the ocean

[18:21] Then you do when you charter a fishing boat on the gringo tourist trail, and of course, it's much cheaper Okay, enough said about that now It's time again to talk a little bit about venezuela since it's been all of the news lately at least down here in latin america Now unofficially, which is the reality on the streets of venezuela inflation has now hit 50 Though as usual the government says it's only half that 25 Estimated over the last year that is no surprise at all Right since all governments lie now depending on how much you've been paying attention in south america news You might have heard that there's a huge toilet paper shortage in venezuela And I think I mentioned that a couple of months ago on the show. So the question is if there's no toilet paper What are they using? It's newspapers that seem to be the butt cleaning method of choice In fact some small textile shops in venezuela are turning out perfect looking rolls of toilet paper out of newspaper

[19:13] Meaning you can do your business and read bits of yesterday's or last week's or last month's news, too So as usual creativity prevails in the face of hardship. That's how it always works, right? But here's what you didn't know when the stores started running out of regular toilet paper and the reports of shortages started showing up In the news in his very first response president maduro said Seriously now that the toilet paper shortage was proof that the economy was robust and growing He said it stands to reason venezuelans were using more toilet paper than ever before Since they were eating better and larger quantities of food. Thus the demand outstripped the usual supply So now there's a tp shortage. You heard me, right? He's actually quoted as saying that and by the way a guy with a peanut brain like that's running an

[20:00] entire country He's got to be related to bush jr Now I have to think that the only real news coming out of venezuela and seeping into the first world these days Is the announcement last week that miss venezuela of 2006 and her husband were ambushed Assaulted robbed and killed on a sightseeing trip through the venezuelan countryside I think you might have heard about that one and the reason why that's such huge news down here throughout latin america Is because she was also a hugely popular soap opera star And even now you see her face all over the telenovela station Those are the soap opera channels, which means of course all the cleaning ladies are in mourning. Yep They've all got their dust mops at half mast Picture kim kardashian kicking the bucket up in the states a tragedy like that would have every last woman in america

[20:46] With an iq under 80 glued to the set So anyway, amiss venezuela is dead assaulted robbed and bumped off certainly by her own fans Because you see she was driving out in the boonies dressed down without her crown In a very average car like an older toyota corona So the bad guys never knew who they were assaulting. They were just out to rob anyone They could they threw nails out in the road Which would puncture the tires of the occasional car in that case it was hers Then they walked up to the car and started blasting it with their guns Not the best of pr for venezuela and I do have to say right here and now I almost never get emails from expats or travelers who have anything good to say about venezuela at all these days It's the last place in latin america people want to go. The fact is things are so bad there and it's so

[21:32] Unwelcoming that first world tourists just don't go And if for example, you're in the largest city caracas the capital You could go for days on end and never see a gringo or a european And if by chance you do nine out of ten times It'll either be an embassy guy or some first worlder on contract working in the oil business since venezuela has huge Pipelines and refineries and who do you think's on a contract to keep those things operating first world contractors? Of course And by the way, I know a few expat gringos in the oil business in latin america in places other than venezuela And they tell me that if you go to venezuela you get hardship pay and bodyguards to take you to and from work to your house So there's really big money for first world oil workers in venezuela and these days that's the only reason first world contractors go there

[22:20] Not for the nightlife or the sun and fun. That's for sure And though a big city like caracas does have wild nightlife and sun and fun in beaches nearby First world oil workers on contract are advised to stay away Now that word in the oil business is that first world worker contractors don't much like going to the middle east to work either Because it's so beastly hot and there's such a culture shot Even though there's big money in it people coming home sometimes say it was like losing six months or a year or two of their lives But now for the first time first world oil contractors are saying the very same thing about venezuela Now if you're a contrarian i'm sure you're thinking that when things in a country get that bad and bottom out That's the time to get in like what some contrarian investors are saying about cyprus right now

[23:05] They had that big bank blow out there and now the stock market's down something like 95 percent Which makes it a contrarian investor's dream. However, don't think that venezuela has hit rock bottom yet It's going to take a long time for that to happen. Remember they're a special case They've got all that oil and they just keep on pumping it and since it's government owned They can keep borrowing against it and selling it into the future It's a basket case. All right, but it's not a basket case country Like for example argentina that has no great oil deposits when argentina takes a dive or defaults on the world stage They really are flat broke and hit rock bottom venezuela on the other hand has something that everyone wants and argentina almost nothing In fact look around your own house. Check the cupboards. Check the closets You see anything with a made in argentina label on it? It's a thousand to one shot if you do, but if you take a car bus boat or a plane

[23:53] I guarantee you there's at least a hint of venezuelan petrol that got you to where you're going However in the interest of full disclosure and so I don't get any nasty emails saying hey johnny you're wrong about that If you happen to eat fast food hamburgers, there's a good chance you've been eating bits and remnants of argentina beef Since entire container ships full of frozen argentina beef end up in us meat packing houses on a regular basis Why because it's cheaper than us beef, of course. Okay, so there you have it Anyway reports are that there's a shortage of basically everything in venezuela now since the government started with wage and price controls And just this week on the venezuelan black market, which is not in some dark dangerous section of town But in parking lots alleys garages parks and public spaces and even in the hallways of university campuses

[24:44] The fact is every venezuelan citizen including school kids knows a good safe black marketplace to change their money If you've got dollars or euros or columbian pesos You're nuts to change it for boulevards at the bank. So no one does You can buy 64 boulevards for a us dollar. That's 64 on the black market Which is 10 times a thousand percent higher than the official bank rate That's why so many people not just venezuelans are trying to get dollars into the country And of course stores aren't legally allowed to accept dollars So you have to buy things in boulevards and no one not even government workers We'll go to the bank and change it at the official rate And now the average yield on venezuelan bonds has climbed five percentage points to 3.8

[25:30] In just the last 12 months, which is the highest among the 50 country emerging market index And of course high interest like that means high risk now because of the low prices decreed for basic goods Food and other perishables are much much more expensive in neighboring countries like columbia Even so when basic food items on venezuelan shelves run out people drive across the border to columbia to pick up those goods Since people have to have their corn their rice their beans and their milk So with all their currency problems, how do they pull that off? Well, it's a pretty slick system You see on the very long columbian venezuelan border the scam starts out on the venezuelan side Thousands of truck drivers have clandestinely fit giant oversized fuel tanks in their trucks

[26:17] Then they fill those tanks with the world's cheapest gasoline or diesel at home for about six cents us a gallon Then they drive across the columbian border where they can sell that fuel instantly for three to three dollars and fifty cents a gallon Making about a fifteen hundred percent profit Then they take that money in dollars in columbia drive back over the border to their home country Exchange those dollars on the black market for ten times the bank rate Then they repeat the whole thing all over again And now because of those basic food and commodity shortages many of those truck drivers after they sold their fuel in columbia Stock up on rice and sugar and corn and milk Drive that stuff back to venezuela and sell that stuff on the black market for hugely inflated prices, too

[27:04] Like one venezuelan truck driver said the border guards on the venezuelan side know exactly what's going on and they hit you for more Bribes whereas border guards on the columbian side They don't care But he says if you drive back from columbia to venezuela Loaded down with food the venezuelan border guards won't ask for a bribe They'll just wave you right through since they've all experienced food shortages themselves And they figure these guys are doing the country a service because people have to eat You've been listening to the expat files living in latin america coming to you twice a week from Somewhere south of the border email me the expat files at gmail.com And don't forget to check out expatwisdom.com to sign up for your free reports on latin america

[27:53] See you next time nos vemos