When to Rent - When to Buy
Vacationers often fall in love at first sight with a quaint tourist destination. Sometimes the knee jerks and the wannabe expat ignores everyone's advice and his own good judgment to plunk down a deposit on a new development on the beach.
After all, what can possibly go wrong?
Buying off plan in emerging countries can be risky. Had the future expat done his due diligence on the developer? Abandoned projects all over the world stand as grim testimonials to poor planning, lousy management, and under financing.
But lets just say that the project gets completed and the proud new owner moves in with a minimum of fuss. What's he going to do when he see a ground breaking ceremony for a steel rolling mill fifty meters down the road? Zoning, what's that?
What could be even more insidious is that when the new expat ventures to another province, they find an area that appeals to them more than their existing one. The grass may well be greener and the ocean more blue. Sell and move? Sure, just take a 30% or greater loss on your house .. assuming you can actually sell it.
- Travel around a lot before you decide to settle. Find an economical hotel or guest house and get a feel for living somewhere. If you see a negative, move on.
- Investigate places that you hadn't ever considered. They may be gems.
- Rent before you buy. Find a house and rent for several months. Living in limbo can be uncomfortable, but making a bad decision and worse investment can be brutal.
- Legal In many countries, foreigners
cannot own land. In others, certain types of land, such as
coastal land, cannot be foreign owned.
Opportunistic real estate developers often set up "local" shell companies with nominee shareholders to own the house and properties. In many cases, those shell companies are illegal and your investment may be at risk.
Always consult a trusted attorney. Get a recommendation from your home embassy.
- Building If you decide to build, and you don't have first hand construction management knowledge, hire a trusted 3rd party construction supervisor. Keep track of materials and labor costs.
An expat home may be the last move for the rest of your life. Make sure it's a rewarding one.