How to Retire Rent-Free

How to Retire Rent-Free

To rent…or to buy? It’s one of the questions to answer as you work through a plan for retiring overseas.

Today’s strong dollar creates an opportunity to invest in a home in the place where you’re dreaming of retiring, even if the start of your retirement is years away.

In Brazil, Chile, Colombia, Mexico, and across the euro-zone, for example, buy today and you lock in favorable dollar rates. Rent the place—to generate income and to cover a mortgage if you have one—until you’re ready to flip the switch to retirement. When you finally do, your retirement pied-a-terre is waiting for you.

Providing what can amount to a rent-free retirement.

Buying a retirement residence overseas can mean other benefits, as well. Moving money out of the United States and putting it into another market and, potentially, another currency brings diversification.

It also helps you to commit to the experience, to move your life forward, embracing the new adventure unequivocally.

The alternative to buying a place to live in retirement overseas would be to rent one. Many who rent before they buy for retirement in another country do so to be able to maintain a property back home, “just in case.” While this can be sensible, it’s also an anchor. It can divide your attention and keep you looking backward instead of ahead to your new life. Keeping one foot on the pier and the other on the departing boat can land you in the drink.

On the other hand, renting rather than buying keeps you mobile and flexible and allows you to try a place on for size. You could decide that the city where you relocate isn’t a fit for you. Or you could find that the city is great but the neighborhood where you’ve chosen to settle isn’t ideal. After you’ve had a chance to get to know the city better, you could decide that you prefer a different neighborhood across town. If you’re renting, you can simply wait for your lease to run out and move to the location you think will suit you better.

If you’ve purchased a house or an apartment, a secondary move is more costly.

The most important thing to remember when trying to decide whether or not to buy a piece of property in another country as part of your retire-overseas plan is to follow your instincts, both with regards to what to buy and also when deciding whether to buy at all. You know yourself, your motivations and preferences, and how well you’ve researched your chosen destination. You know your level of comfort, your level of readiness, and your tolerance for risk.

10 Things To Remember When Shopping For Your Dream Home Overseas

If you decide to invest in a piece of real estate for your retirement overseas—whether you’re planning to retire next year or a decade from now—here are 10 things to consider:

  1. How much space will you need? Do you want an apartment or a house? One bedroom or two? (You probably won’t need more than two.) Two levels or only one? A guest room or even a guest house? Will you have guests often? Will you want them to be able to stay with you, or would you prefer if they came and went from a hotel nearby?
  2. Do you want a front yard, a back garden, or a swimming pool? All of these things require care and maintenance.
  3. Do you want to be in the heart of downtown or out in the country?
  4. Do you want a turn-key, a renovation project, or something in-between?
  5. Do you like the idea of living in a gated community, or would you prefer a neighborhood where you could become part of the local community? This is a key consideration. Going local means you have to learn the local language (if you don’t speak it already). Or perhaps you’d prefer to be off on your own with undeveloped acres between you and your nearest neighbor. In this type of rural setting you will need to build your own in-case-of-emergency infrastructure.
  6. Consider traffic patterns and transportation. Where you base yourself determines whether you’ll need to invest in a car, which is an important budget consideration.
  7. Consider the convenience factor. How far is it to shopping, restaurants, nightlife, parking, and the nearest medical facility?
  8. Do you want a furnished home? You may have no choice but to buy unfurnished (unless you buy, say, from another expat who’s interested in selling his place including all contents). Buying unfurnished means you’ll need to purchase furniture locally or ship your household goods from home.
  9. What’s your budget? This is the most practical guideline of all, of course. Be clear on your finances before you start shopping, and, if your budget is strict, don’t be tempted to consider properties outside your price point. You’ll only be disappointing yourself unnecessarily.
  10. Finally, ask yourself what kind of view you’d like from your bedroom window each morning. This can be an effective way to focus on something important that might otherwise be overlooked until it’s too late.

Source: Forbes
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