Four Reasons Never To Buy A Home Overseas
Without question, you should rent in your new home overseas for the first few months at least, to give yourself a chance to try your chosen Shangri-la on for size.
But should you rent longer-term, as well…or invest in a place of your own?
Let’s make a list.
Here are the advantages to renting in your new country of residence rather than buying long-term:
Advantage #1: You’re mobile and flexible. No matter how much you enjoy your new location, maybe, sometime down the road, you’ll decide you’d like to find out what it’d be like to spend time someplace else. Maybe you’d like to move again…or perhaps eventually you decide you’d like to divide your time among two or three destinations each year–springtime in Paris, summer in Buenos Aires, and winter in the Tropics, for example. It’s easier than you might imagine to organize a wandering retirement along these lines…especially if you haven’t invested in a permanent residence in any one place.
Advantage #2: You avoid the carrying costs of home ownership. A residence of your own means maintenance and repair expenses. It requires home-owner’s insurance and care-taking. In some places, it obliges you to pay property tax. And, if you buy with financing, it necessitates, in much of the world, an investment in life insurance. Renting, you have none of this expense. Only rent.
Advantage #3: Investing in a home in a foreign country means you need a will in that country. Otherwise, what happens to the asset when you die?
Advantage #4: If you buy a home, you’ve got to furnish it. Investing in your own place means investing, as well, in tables and chairs, beds and dressers, throw rugs and flowerpots. Rent furnished, and you simply show up and settle in.
All these things are true and make for a persuasive argument for why it can be wiser to rent long-term. Still, I have to admit, I prefer to own.
I say again: Rent first. For six months, ideally. And, for all the reasons I’ve mentioned, you should consider renting indefinitely. But I understand if you decide, all logical arguments to the contrary notwithstanding, to buy anyway.
In Ireland, we rented a riverside cottage for a year before moving into the country home we finally found and restored. In Paris, too, we stayed in a rental apartment while the renovation work in the apartment we eventually bought a few blocks away was being carried out.
And, after four years in Panama, we’re renting still.
But this extended rental experience in Panama City has shown me that I’m not a renter. I’m not comfortable living in someone else’s house long-term. I want to paint, decorate, improve, adjust, expand. As a renter, every change must be approved by the landlord.
I like to garden. Our rental house in Casco Viejo had a small back garden, where I’d intended to make beds and to take advantage of the regular sunshine to cultivate sunflowers and tomatoes, bougainvillea and hibiscus. Alas, the landlord had different plans, which we didn’t discover until after we’d moved in. The little garden plot ended up a construction site, while the owner pursued his own home-improvement agenda.
Plus, the house in Casco Viejo had plumbing problems, a leaking roof, and improperly installed kitchen cabinets…things we would have fixed as the owner. But who wants to invest in improving someone else’s asset? So we put up with the leaks and the ill-fitted kitchen.
Now, though, after four years at home in Panama City, we’ve learned not only that we don’t want to rent indefinitely…but also, finally, we’ve learned where, specifically, we really would like to be located in this town. And we’ve launched a search for a home of our own here.