Four Good Reasons Not To Buy In A Foreign Country
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 rather than buying long-term:
#1: You’re mobile and flexible. No matter how much you enjoy your new location, maybe, some time 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.
#2: You avoid the carrying costs of home ownership. A residence of your own means maintenance and repair expense. 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.
#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?
#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 renovated. In Paris, too, we stayed in a rental apartment while the renovation work in the one we eventually bought was being carried out. And, after a year-and-a-half in Panama, we’re renting still.
But this extended rental experience in Panama City is showing 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 green beans. Alas, the landlord had different plans, which we didn’t discover until after we’d moved in. The little garden plot ended up as construction site, while the owner pursued his own home-improvement agenda.
Plus, the owner was interested in selling. We’re interested in owing in Casco Viejo. This historic Panama City neighborhood is the one that suits us best. But living in that house as renters, we’d gotten to know it too well. It had plumbing problems, roof leaks, and improperly installed kitchen cabinets. Bottom line, we didn’t think the house was worth what the owner was asking. So, should the owner have found someone willing to go along with his asking price while we were tenants, we’d have had no choice but to move on.
We’ve launched a search for a place of our own. As I’ve reported, prices in Casco Viejo remain strong. Every building we’ve inquired about has been sold by the time we’ve organized ourselves to go have a closer look. The trouble is limited inventory. There are only so many classic colonial structures in this World Heritage Site enclave. And demand seems to be holding strong.
We have our eye on a nice, three-story corner building with wraparound balconies and shutters on every window. We’d gut the insides and rebuild from scratch (what a great project!). I’m not going to tell you where it is, for fear this property, too, might be snatched away before we’re able to process the opportunity.
Wish me luck.