Home Buyer's Recession Survival Guide - The Reasons To Not Buy An Offshore Retirement House

We have all seen the articles by the active senior couple, their hair waving in the breeze in front of their charming retirement house amidst swaying palm trees. Ah, yes. That is the good life. Retire to some lovely tropical corner of the Earth and live happily ever after. Unfortunately the truth is far different than those alluring photo shoots would lead you to believe.

Purchasing a house outside the United States and going to live there full time is a drastic step with an innumerable number of drawbacks or outright obstacles. Here are just some of the major ones:

1) Immigration. You are a stranger in a strange land. You have to continually ensure that you have the proper authorization to stay in your home. Even though you may own it outright, you still have to get that stamp in your passport, sometimes as often as every six months. Many are the retirees who suddenly come up against a recalcitrant immigration officer or a change in immigration policy, or even a change in government regime and find themselves on the next plane out wondering if they will ever see their home again.

2) Ownership. Some countries, like Mexico, will not allow you to own property. Period. If you want to buy a house, you have to go through all sorts of crazy deals with total strangers where they own the land but lease it back to you and many other screwy strategies, many of which end up in tears. Even when you buy a house outright and legally in a foreign country, you are always subject to a sudden regime change arbitrarily deciding to take your property away and kick you out without as much as a penny in compensation. Don't laugh. It's happened. Many times.

3) Ugly Americanism. There are countries such as Venezuela where Americans could buy wonderful bargain retirement properties and live in total harmony and peace just a few years ago are no longer quite as appealing. No, the house prices haven't gone up, actually they've gone down. But the Venezuelan president has recently allied himself with Cuba, Iran and North Korea (!!!) and declared a form of crusade against the United States and all Americans, even those living legally on Venezuelan soil. Suddenly, Americans are getting arrested on the street for taking a photograph of a palm tree under the excuse that they are spying, and all sorts of other heavy-handed government-approved hassling.

4) Mortgage. Yeah, just try to get your local bank to finance a mortgage in Douwannastan. They will politely thank you and hang up. And the local Douwannastan banks will likely not be able to confirm your credit rating, assets or anything else that they would need to issue a loan. You are likely going to have to pay for the property in full in cash.

5) All the good countries are taken. There are very few countries that are guaranteed safe to Americans and are still affordable. The Australian and New Zealand dollars have been soaring to the point that they are almost at par with the U.S. dollar. The Canadian dollar is already within about a dime of parity, up from 62 cents just a few years ago. The European Union is a very safe place for Americans, but a tiny, decrepit, walkup two room (not two bedroom... two room!) flat in London will cost you upwards of a million dollars... even after their prices have spiraled downwards since last year!

6) Unfamiliarity. Sure, that grilled sheep's head on pita was delicious the first time, but after a few months of that, wouldn't you really like a Nathan's Hot Dog? There are many things that we take for granted as integral parts of our lives that are simply unobtainable, even in major countries. There is no such thing as hamburger relish in any supermarket in Italy, no maple syrup in Argentina, no baking powder in Tahiti... And in many countries, electrical supply is provided when the utility feels like it, the tap water is highly suspect, insurance companies never pay a single claim, safety standards and construction codes are nonexistent... need we go on?

7) Medical coverage. The majority of countries in the world have medical facilities and services that couldn't adequately lance a boil, let alone save your life. Your lovely little offshore home isn't going to do you any good if you're dead.

8) Scams. The American couple who shows up speaking all of a dozen words of the local patois and is flashing cash to buy a house is just asking to be scammed. And once your money is taken and you're left with a dubious title to a tin shack in a swamp, the local authorities will likely just laugh in your face and tell you to run along. Legal protection for foreigners in many of these countries is completely nonexistent.

With all those negative factors in play, the best thing you can do is stay home!

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Shadesbreath says:
6 months ago

This was a good read. You manage to give good advice here and keep it entertaining too. Ain't said though, that "all the good countries are taken?" I wish I had a million or so buck to move to London though. That would be awesome. Be worth it just to be surrounded by women with that accent.

Hal Licino says:
6 months ago

I lived in London for years, and even though every once in a while the fact that you haven't seen the sun for the last three months really starts bothering you, there is no place like it anywhere on Earth. It's by far my favorite huge metropolis. But you certainly do need cubic money!

pgrundy says:
6 months ago

I write a weekly column for this guy who has a website for people who want to retire in Costa Rica. I had many of the same thoughts--thank you for voicing them!

My first thought was, whoa. Great way to get your throat slit, but maybe that's overreacting on my part. Anyway, I'd like to visit, but monkeys scare me so no thanks to the offshore dream house. :)

Sufidreamer says:
6 months ago

There are still some good bargains to be had in Greece, if you know where to look :)

Hal Licino says:
6 months ago

pgrundy: When I lived in the Caribbean we had a whole family of green monkeys who lived in the trees just behind the swimming pool. They were fun to watch and once and only once did they try to hit me with a piece of flying poo! :)

Sufidreamer: The entire EU has been hit hard in the property prices, but I have a friend who lives near the Macedonian... er... sorry... FYROM border and he says you can get a nice little rural house on a couple of acres for around $35,000! OPA! :)

Shadesbreath says:
6 months ago

Dodging flung monkey pooh is an essential factor in the "how much adventure have you had in your life?" equation.

Hal Licino says:
6 months ago

Most definitely. Right up there with doing a perfect 80 foot motorcycle ramp jump when the ramps are 81 feet apart. Been there, done that, got the Tshirt. :)

Sufidreamer says:
6 months ago

lol - Greece is fairly stable for prices. The Greek market never had a boom, because the government tried to discourage flipping. Cyprus, on the other hand........

Northern Greece is beautiful, but gets very, very cold in the winter. The Peloponnese is better - a house in our village sold for about $50 000 last year, with very little work needed. OPA!

Shirley Anderson says:
6 months ago

Geez, Hal! You know how to burst a gal's bubble. How are my fantasies about living in a tropical paradise supposed to survive in the face of all this reality?

An excellent read, as always, but bummer all the same.

Guess I'll stick with a different country on the same continent. :)

Hal Licino says:
6 months ago

Sufidreamer, having spent more than my share of time in various former Yugoslav republics as well as across the pond on the Italian Adriatic shore, I have experienced more than my fair share of BURA... which I always pronounced as BRRRRRRRah... What amazes me is the fact that things like insulation and central heating are completely unheard of over there!

Shirley Anderson, there is a tropical paradise where everything works for an American: Hawaii. Maui is not pau yet and Kauai and the Big Island still have places where they are steeped in pure enchantment, and you don't have to put up with the craziness of foreign bureaucrats. :)

LondonGirl says:
6 months ago

"a tiny, decrepit, walkup two room (not two bedroom... two room!) flat in London will cost you upwards of a million dollars... even after their prices have spiraled downwards since last year!"

While property prices in London are silly, they aren't quite that silly, I promise. I live in Bloomsbury, a rather nice Georgian area in the centre of London, near the British Museum, Russell Square, and University College, London. For a million dollars (which is about £660k, give or take a few quid) you get a lot more than a grotty 2-room flat. What is a walk up, by the way?

Your million dollars would get you a 3 bed, 2 bath flat in one of the nicest bits of WC1 in a Georgian building, or 2 ex-council 3-bed flats in modern buildings. And this is one of the more expensive parts of London.

pgrundy says:
6 months ago

I would LOVE to live in Greece, by the ocean (isn't that most of Greece?)

London would be lovely too though.

We can't even afford Toronto. :(

Misha says:
6 months ago

Pam, talk to Sufi, I don't think he is paying too much, probably less than you now. And you already got some experience of abrupt life changes :)

Hal Licino says:
6 months ago

London Girl: The sister of a good friend from my London days lives in Knightsbridge (yes, I'm aware it's a pricy area). Her flat is "walk up" over a ground floor that has at least a 16 foot ceiling so it's a heck of a long climb on a narrow, creaky stairway. Once up there she has two rooms, not bedrooms specifically... just rooms. Both are the same size, and both are approximately 50 square feet smaller than the walk in closet in my bedroom (no joke). Then there is a bathroom and a kitchen both of which I can only enter sideways, and I'm fat but not THAT fat. Her boyfriend is a property appraiser and states that the flat was worth GBP950,000 and now is down to GBP700,000. Still over a million bucks. Ouch.

pgrundy: Greece is beyond magnificent. And the people there are even nicer than the scenery. London is an experience that everyone should have. I believe that every student graduating from an American university should have to live for a year in London. It is literally the center of the cultural, artistic and intellectual universe. Hey, I can't afford Toronto either! :)

Misha: Hey, if we all move to some remote Aegean island, we could live off the land and escape all of these economic meltdowns. I have some killer recipes for goat cheese! :)

LondonGirl says:
6 months ago

Knightsbridge is about the most expensive part of London, you certainly can't quote a price there and extrapolate to the whole city lol.

In the swankiest parts of Knightsbridge, half a million quid can indeed buy you 450 sq. feet of cramped-ness. But there are really nice and great parts of London which are cheaper.

pgrundy says:
6 months ago

Misha I have experience with Greeks too. (I worked for Greeks and lived! lol!) So I'm all set! Just need to get Bill to come with. :)

Hal Licino says:
6 months ago

LondonGirl, definitely Knightsbridge is quite tony and expensive as is Belgravia. However, another friend's flat which was just a smidgen larger and just about as icky sold a couple of months back for GBP400,000, and it was in freakin' Harrow! :(

pgrundy, please keep your experience with Greeks to yourself. This is a family Hub. (ok, just kiddin'!) :)

Misha says:
6 months ago

LOL guys, I gues we need to organize an expedition there. Does anybody knows how much does it cost to rent a small island there? Like a few hundred acres?

Hal Licino says:
6 months ago

I can't speak for Greece but just up the coast on the Croatian shore, I recently heard of a 300 acre island selling for two million dollars, which really isn't that much for your own Mediterranean fiefdom! :)

Misha says:
6 months ago

Yeah, Croatians sell the islands for quite some time already. I am a bit scared to go to Croatia though - I did have a Croatian gf at some point, you know... :D

Hal Licino says:
6 months ago

Misha, Misha, Misha... are you telling me that you don't want to run into your Zagreb Zinger, your Split Sweetie, your Rijeka Rocker, your Karlovac Kisser, or your Osijek O-Machine? :)

Misha says:
6 months ago

LOL now I see I was not clear enough! No, I am positive I don't have kids there, I am just generally scared of Croatian women :D

Hal Licino says:
6 months ago

Dude, I'm sooooooooooooooo far into the NO COMMENT zone that I can't even see the edges any more! :)

Sufidreamer says:
6 months ago

Misha - I went out with a Croatian girl, once. It hurt - could that girl punch :(

I will look into the island, folks, although I live some distance away from the sea. Just up the valley, some Sheikh dude from Dubai bought an entire Greek mountain. Don't know how much he paid for it, though :)

Misha says:
6 months ago

LOL Sufi, so you know what i am talking about :D

I don't think we are looking to buy an island, I would rather talk about renting it with islemates LOL

Hal Licino says:
6 months ago

Count me in. Renting or buying. I wouldn't mind living out what's left of my days scarfing down roast lamb while lounging in the Aegean sun... naked... of course that MIGHT dissuade some of the islemates, but then I'd have the place all to myself and that would be primo! :)

RockBlossom says:
6 months ago

Great advice! In the next 3-4 years, I do plan to sell my house and move to a tropical paradise with nice beaches. I'll have access to military healthcare, and they will even let me buy a house if I actually have that much money. Best of all for me, there's no state tax on my retirement pay - either military retirement ot SS. Location: Mililani, Hawai'i

Hal Licino says:
6 months ago

Ah! The Schofield/Wheeler area! Dang! You don't know how jealous I am of you! Mililani town is a fantastic place! BWAAAHAAAAAAaaaaaaaa... I wanna go back to live in Hawaii... sob... sigh... :(

Barbara Yurkoski says:
6 months ago

Good dose of reality, Hal. I hope it keeps some people out of trouble. As for me, I'm sticking with Canada.

Hal Licino says:
6 months ago

Let's face it, if it wasn't for the profoundly stultifying winters, Canada would be the #1 choice country. But after the last couple of endless cryogenic beat-your-head-against-the-wall winters, I've gotta get away for a bit this year after Xmas or I'm gonna DIE! :(

in2town says:
6 months ago

Greece is the place to live if you want good quality accomodation at a good price. Even though i feel give it a year or so it will become on par with the UK house prices, at the moment you can still pick up a good quality property at a reasonable price

Hal Licino says:
6 months ago

Actually, if UK house prices keep dropping, pretty soon they'll be down to USA levels! :(

HKrafston says:
6 months ago

Very informative. Couple of things I hadn't thought about.

Hal Licino says:
6 months ago

Glad I could provide some information. Thanks for your comment!

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