Should expats buy or rent property abroad

Should Expat Retirees Buy or Rent Property Abroad

Perhaps the typical ‘dream’ of a retirement abroad includes living in a beautiful villa overlooking the calm Mediterranean or Caribbean Sea, sipping a long cool drink on a terrace on a balmy evening and enjoying a relaxing life in a stunning location overseas.  After all, who would turn their nose up if such a fantasy became a reality?

However, should expat retirees actually buy property abroad and become the proud owners of the dream villa/apartment overlooking stunning views – or should they perhaps rent a home overseas and never commit too much to their new nation of choice?

There are very strong voices behind very strong arguments in both cases – so we thought we’d bring some balance to the table and present both sides of the story to you if you’re thinking about moving to live abroad in retirement.

The 5 pros of buying property abroad

1) You own your own home and can do what you want to it – you can transform a wreck into a palace and have great fun and enjoyment from doing so
2) You may feel much more established and at home in your new nation
3) You ‘secure’ your money to a property and have a foot on the property ladder in the nation you’re in – so no matter which way it goes you can enjoy the ride!
4) You have a physical asset that can perhaps serve as a long-term investment if not for you, then for your heirs in years to come
5) You can really feel as though you’re living the dream abroad and you can cut all ties with your old nation

The 5 cons of buying property abroad

1) A property is a very expensive asset, it can tie up a great deal of your wealth
2) A property is a difficult asset to liquidate and sell if you want or need to
3) If you make a make a mistake with your country choice you’re far more committed to it if you own a home there and it makes it harder to get back home and get your life back in order!
4) A property’s value in your new nation may fall at a time when homes ‘back home’ are rising, if you want to sell up and move at this point you can see the value of your asset eroded in relative terms
5) You may have bought in an unsuitable location if you bought in haste because until you live in a nation for a considerable time you never know where the best parts of that country are.

The 5 pros of renting property abroad

1) You can sign up to as long or short a contract as you like – and there are always ways to get out of a contract if you need to meaning you’re never committed for that long to any one property
2) You can get to know different areas of a city or different parts of a country by renting properties in different locations every few months
3) You can leave easily and go back home or relocate elsewhere if you decide you’ve made the wrong nation choice
4) You can get to know a country’s property market and its movements well before diving in
5) You can time your entry into the property market or you exit from your old home nation’s property market much more beneficially potentially.

The 5 cons of renting property abroad

1) Your security in terms of having a place to hang your hat depends on that of your landlord and any rental agreement you sign
2) Rent is considered dead money
3) You can’t put much effort into making a rental property home by redecorating it for example, as there are often restrictions on changes you can make
4) Any money you do spend on the property is money directly in your landlord’s pocket not your own
5) You may find it harder to settle in and settle down without a home that you can really call your own.

Hopefully the pros and cons lists will help you decide what’s right for you – we would tentatively and respectfully suggest that anyone moving abroad rents at least for a period of 6 months or so so that they can a) determine whether they have made the right country choice, b) determine whether they have picked the best location in their new nation, c) find the right home and d) work out the best time to enter the property market abroad and exit the real estate market back home.  Having said all that, it is a personal decision!

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