“Kathleen, my husband and I are looking for somewhere warm in Europe to spend our winters when we retire in about 10 years. I have two questions. First, what country and region do you recommend for us? We are looking for a simple life with access to ocean and urban entertainment. Second, do you recommend buying and subletting or renting?”
–Sharon D., Canada
Our #1 pick for retirement in Europe is Portugal, as you’ve been reading these past several days. It sounds like it could suit you and your husband perfectly.
We recommend renting first wherever you decide to relocate in retirement overseas. Renting keeps you mobile and flexible and saves you the carrying costs and hassles of being a homeowner. When you’re certain you’ve found the retirement spot that’s ideal for you, then buying can make sense… and allow your retirement adventure overseas to double as an investment, potentially for both capital gain and cash flow.
That said, as you’re planning now for retirement 10 years down the road, it could make sense for you to break this rule. That is, property values are depressed in Portugal right now, while the dollar has more buying power in euro-land than it has had in more than a decade and a half. This is a window of opportunity to invest in one of Europe’s top havens at a discount that we may not see again in our lifetimes. If you bought today, you could rent the place out over the next decade, earning cash flow to cover carrying costs. Then, when you were finally ready to pull the trigger on your retirement plan, your paid-for pied-a-terre would be waiting for you.