You can retire cheap in foreign countries and also lose your butt.
Foreigners have a mentality of, “I must own my property in a foreign country.” This is the wrong way to think and you must think different. Why risk owning a foreign property or dealing with the headaches? Renting takes all the headaches out of your life. Political climates can change overnight and being able to leave that country without trying to sell your house can save you thousands. Just imagine trying to sell your house when foreigners are not welcome in your paradise. It happens everyday folks.
It’s cheaper to rent, as you will see in a few paragraphs down.
Take Lago de Atitlan, Guatemala for instance. With the lake pollution and a little anti-gringo vibe in the air, folks are wanting to leave for greener pastures. Well the homeowner is in a losing situation. You either take a big loss or holdout in hoping the market will come back. Now take the person that rents in the area. He/she just packs up their belongings and heads to the greener pastures with no headaches.
Many people lose money when buying foreign property. They think this is paradise and make fast irrational decisions to buy a house or property. Often paying way above market value. If you think you can buy a house and leave it unattended for months without a 24/7 security guard, you will learn a hard lesson.
Now if you really want to see for yourself, then go and rent in an area of your choice and take a look at the property for sale by foreign owners. Their once perfect paradise is now in the hands of a real-estate agent. Think rent, rent and rent.
Just because you own a property in a foreign country does not mean you automatically have the right to overstay your visa. When you enter a country in Central America, you will usually get 90 days to stay in that country. Before your 90 days lapse, you will have to cross into Mexico or Costa Rica for 72 hours before you can return. The renter also has to leave for 72 hours, so there is no advantage in owning your own house.
You can retire cheap in foreign countries! No need to take the risk of buying a house. Just rent and move on down the road when you get tired of the area.
Here I will give your some examples of ways to rent and some general problems you may encounter.
The best way to find yourself an apartment in the area you like, is by renting weekly in a hotel and then start asking around about apartments. People love to rent to foreigners since they assume we have lots of money. For instance, in the Lago de Atitlan area of Guatemala, you can stay in hotels that cost no more that 2.50 USD per day. In Nicaragua and Honduras you are looking at hotels that cost around 6 – 8 USD per day.
Now since they assume we have lots of money. Its up to us to figure out the going rate for hotels, apartments and houses. Most likely you already are overpaying for your first night in town. But figure out the going rates by asking around and then move to a better deal or negotiate for a better deal at the place you are staying. Getting a one-dollar reduction in rent can put better food in your stomach or pay for that new refrigerator.
Often times you might find staying in a good hotel better than renting an apartment or house. You can eat at the local markets for around 3 - 4 dollars per meal. Maybe the hotels will come with kitchen privileges.
Often low rental areas will not have a refrigerator included in your apartment. This is not a real big problem, since you can walk to the local market and purchase fresh meat everyday. Plus, you will often find yourself eating lots of healthy vegetables that are very cheap and abundant. Often the rent is so cheap it is worthwhile to buy a small refrigerator. Make a deal to have your rent lowered, in exchange for leaving the refrigerator.
Here are some examples of what you can expect to pay for housing in foreign countries:
Guatemala: 50.00 USD per month for small house in San Pedro, Lago de Atitlan. The toilet and shower are outside. The gas is supplied, but you would have to supply the eating utensils. No refrigerator, but the market is nearby.
142.00 USD per month gets you a real nice apartment with private bath overlooking Lago de Atitlan in San Pedro, Guatemala. The kitchen is shared.
Nicaragua: 250.00 – 300.00 USD per month gets you a house in San Juan del Sur, Nicaragua.
300.00 - 350.00 USD per month gets you a lovely apartment completely furnished in San Juan del Sur, Nicaragua..
150.00 USD gets you a bedroom with private bath in a house with kitchen privileges in San Juan del Sur, Nicaragua.
On the island of Ometepe in Nicaragua, I took a look at a 2 bedroom, 2 bath, big kitchen and nice size living room house for 200.00 USD per month. The back yard was enormous and it had a gated driveway. It came unfurnished, so that would be an added expense to factor in. But for a retiree it would be perfect if you were going to live there full-time.
I went to a local hotel on the Isla de Ometepe, Nicaragua and asked how much rent would be for one month. The lady told me she would rent monthly for 3.00 USD per day. Imagine…staying in an exotic location for 90.00 USD per month.
Prices very on how much tourism the town gets. Low tourism equals cheaper housing (usually.) If the area is over saturated with housing then the prices can fall pretty drastically.
Now I think the rule of thumb should be that you buy after renting in an area for 3 years. But I still ask the question of why buy, when you can rent without the risk?
For the average person on a modest pension I think you should rent and enjoy.
