After you’ve chosen the overseas retirement haven that fits you best, your work isn’t done. You’ve still got to choose an address. You probably won’t know if a particular locale, region, or neighborhood is right for you until you’ve lived there for at least 6 to 12 months. Beyond the stage when you are trying a place on for size, renting rather than owning a retirement home abroad still has big advantages. Here is why your new retirement home overseas might best be rented rather than acquired.
Stay mobile. When you’re ready for your next adventure, you need to wait only until the term of your lease is up. You don’t have to find a buyer for your immovable asset. And you don’t have to relocate your furniture and other household goods.
Less upkeep. Renters generally have fewer maintenance worries and expenses. There’s also typically no property upkeep or property taxes.
No debt. You may have no choice about whether you rent or buy. In many overseas retirement locales, financing isn’t an option. Nicaragua, Honduras, Uruguay, and Ecuador are cash economies. No local bank is going to lend you money as a foreigner to buy a house.
But you don’t have to own a home to enjoy an exciting retirement abroad. You only have to find it. Here are some ways to find a rental in another country.
Word-of-mouth. You can search on the Internet, but, as with property for sale, the rentals you find this way are typically the most expensive, especially if you search English-language sites. Your chances of getting a better deal are increased if you reference sites in the local language. But you’re still going to find only those properties for rent by locals with the wherewithal to advertise them on the Internet.
The local newspaper. You can source rentals through the local print classifieds. This can be an effective way to penetrate the local market and to gain access to local pricing, if you read and speak the local language fluently. Understanding Spanish well enough to read a rental property listing in a local newspaper in Buenos Aires, for example, isn't enough. You've got to be able to speak Spanish well enough to have a conversation by telephone with the owner to arrange a viewing appointment. Then you've got to feel comfortable enough speaking Spanish to meet with him or her in person at the property to ask your questions, negotiate the price and other particulars, and review the rental agreement, which will be in Spanish if that's the language of the country where you're shopping. I've known many people who've successfully sourced rentals this way and been happy with the results, but I couldn't do it without help in a market where the language is Spanish. My Spanish isn't good enough.
Your network. The most efficient and effective strategy to find an apartment if you're not fluent in the local lingo is to ask around. You can begin this process before you arrive in your new home, but finding a suitable rental in the right location for you at a good price can be a difficult thing to accomplish from afar.
Two months in advance of our move from Paris to Panama City a few years ago, I tried to launch our search for a rental in the Panamanian capital by sending off e-mails to friends, business contacts, and property agents in the city. Everyone replied to say that searching long-distance for an apartment or a house to rent in this market is going to prove difficult. It’s much easier to wait until you're here in person.
The Panama City rental market at the time was an extreme example. It qualified as one of the most active short-term rental markets in the world. The would-be renter had to be ready to act. If you hesitated or showed up to a viewing without your local bank checkbook to pay for the deposit on the spot, you risked losing out. Few markets are this competitive and the Panama City rental market has quieted down considerably since.
Visit in person. Making a determination about where to live without having seen the place yourself is a dangerous thing. An e-mail from a friend telling you about a rental in a nice neighborhood available for an affordable price might be the best value you will come across. Maybe you would trust your best friend or your significant other to scout and secure a rental on your behalf, but I've known even that to backfire. Of course, the lease term will eventually expire and you can move wherever you like. Maybe you could even negotiate with the landlord to get released from your rental contract early. But in some countries this is not easily accomplished, and the negotiation is a hassle you don't want during what should be the honeymoon period in your new home in paradise. It's better to see a place yourself before you hand over the security deposit and the first and last months' rent.
Start with a hotel. It may sound like a non-strategy, but the best approach is simply to make a reservation at a hotel located in the area where you think you'd like to live. Plan to stay up to four or five weeks. It may not take you this long to find a place to live more permanently, but don't be discouraged if it does. We were guests of the Granville Hotel in Waterford, Ireland, for a full eight weeks before we finally found the rental cottage that became our first home in that city. (We negotiated a discounted long-term rate with the manager.) Easing into a place this way gives you a chance to get the lay of the land and to take your time considering your options.
Enlist a broker. Some people engage the help of a rental agent in their apartment search. In most markets, the landlord pays the fee or it's split between the owner and the renter. In a place where the person you eventually rent from is responsible for paying the agent's commission, I recommend you enlist the services of a broker in your search. If it costs you nothing, why not have an agent search along with you? You can pursue your word-of-mouth strategy, while the agent does his or her thing.
The downside is that, even though you're not paying it, the agent is still working for a fee, which is typically based on the monthly rental amount. The agent isn't going to knock himself out trying to find super-cheap options. He'll work within your parameters, but he'll bring you the options that will earn him a greater commission. You can always politely decline interest, of course.
The other advantage to engaging a broker's help sourcing a rental is that, in some markets, the agent's job isn't over when the rental agreement is signed. Here in Panama, for example, a rental agent is expected to help you to orchestrate your move. He'll negotiate the terms of the rental, coordinate payment of the security deposit and initial rent, help you arrange for the installation of telephone and Internet, and transfer the electricity account into your name. These may sound like small things, but in a new country operating in a foreign language, you'd be surprised how complicated they can become and how welcome a little help can be.
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter. Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.