A lot of people are wondering why expats would choose to buy property in a foreign country when U.S. real estate is so cheap right now, and the answer is that the price of the home is only one factor among dozens. U.S. property may be cheap, but healthcare, property taxes, utility bills and the general cost of living are still going to be more expensive. Plus, that’s not to mention missing out on what really makes overseas life so attractive, like the different cultures, architecture, lifestyle and sense of adventure that comes with living in a foreign land. For more on this continue reading the following article from International Living.
I just received an email from an International Living subscriber asking a question that is becoming more and more common in my inbox. To paraphrase: “With the price of real estate so low in the U.S. right now, why would anyone move abroad?”
Fair question. And if your only reason for considering a move abroad is to find inexpensively priced property, the answer is obvious…you really don’t need to.
As everyone knows, in some specific U.S. markets real estate has been eye-poppingly cheap for several years. The word on the street right now is that prices are on the rebound, but this information seems to come mostly from real estate agents themselves. Any way you slice it, if you look hard enough you can find property in the States that is priced as low as almost anywhere else in the Western Hemisphere.
But when you do the research and run the numbers for yourself, make sure your numbers don’t stop at the basic sticker price of real estate. Sticker price should be just the start of your numbers, whether you’re a pure real estate investor or you’re investing in your own long-term lifestyle, health, and happiness. The numbers on the “Recurring Expenses” side of the ledger will mean more to you in the long run, no matter how low the initial cost of a property.
If you’re looking for a house or condo or plot of land for any other reason than price alone, buying cheap in the U.S. doesn’t really accomplish much.
Your utility costs will still be higher than in most of Central and South America. Same with your property taxes, which ran me and my wife, Suzan, about $40 on our Ecuador condo for the entire year of 2011. Your medical care won’t magically become as inexpensive as it is almost anywhere else in the world. Your selection of corporately grown and transported food at the local supermarket probably won’t change into fresh produce from the local mercado.
And no matter which side of the fence you’re on, it doesn’t look like the tone of politics is going to change for you much in the U.S. either.
If you’re a straight-up investor, none of the above may factor into your buying decision. But the costs of carrying a U.S. property until it can eventually be sold into a bottomed-out market can be prohibitive. (That’s one reason pure investors still find overseas real estate so attractive. Taxes and utilities are often so low that it’s affordable to simply buy and hold. )
However, most of the folks I talk to about moving abroad are interested in just that… moving. Affordable property is a huge plus, and it’s available all over the world, but that’s just the tip of the iceberg. In fact, some of the folks I talk to have run the numbers and found that renting in certain destinations abroad is actually a better idea for their particular situations. Owning property isn’t even on their radar.
So, while it’s nice to find inexpensive property, it’s what happens afterward that makes the difference to someone thinking about moving abroad. And for most of the people I talk to, what happens afterward is all about quality of life.
That’s why I find that for most people, the question isn’t, “With the price of real estate so low in the U.S. right now, why would anyone move abroad?”
The question is, “Whether you buy or not, if you could live a happier, healthier, more stress-free life, including perfect weather and quality medical care, for half or less than you’re paying right now…why wouldn’t you move abroad?”
Of course, all things being equal, there may be compelling reasons to stay put, even if you take better quality of life out of the equation. Many people aren’t in a position to make a major move anywhere, much less outside the country. And just as many people consider it a fair trade to deal with their current situation at home in order to be close to family, friends, and the society and culture they’re used to.
Everyone makes those decisions for themselves and for their own reasons. But cheap real estate? It’s all over the planet.
The pursuit of long-term health and happiness at a price that suits your budget and weather that suits your clothes?
That should be your goal.
This article was republished with permission from International Living.