Guest Post Wednesday: “Thinking of Retiring Abroad? Buy Homes in Costa Rica! Check Out A ‘Dual Guide’ On What You Need to Know!”

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“Are you thinking of retiring abroad to enjoy ‘the good life’ after decades of dedicated, back-breaking labor, and you want to know how Costa Rica real estate is doing?”

(Editor’s note:  Today’s Guest Post Wednesday features an unusual spin on financial independence.  The expert who’s interviewed for this post spent over 20 years abroad on military bases, teaching at DoD schools and “living local” wherever possible.  No matter where you decide to live after the military, this advice will smooth your transition.  If you’ve never even considered living abroad, let alone buying a home in a foreign country, then learn more with the “Related articles” at the end.)

(If you’re interested in contributing a guest post, please see our guest posting guidelines.)

By Eric Williams

Are you thinking of retiring abroad to enjoy ‘the good life’ after decades of dedicated, back-breaking labor, and you want to know how Costa Rica real estate is doing?

Have you always dreamed of living abroad in a less-stressful environment than the breakneck-paced speed that defined your working days and you’d like a ‘How to buy homes in Costa Rica’ guide?

Well, if you answered ‘Yes’ to either of the aforementioned questions, then you’re going to love this brief, but informative, ‘dual guide’ on how to buy homes in Costa Rica and what you need to know about retiring abroad.

Thanks to some in-depth research from yours truly – and some expert advice on living abroad from family friend and well-traveled educator Kathy Honeycutt, anyone who wants to either buy homes in Costa Rica or retire abroad, will get the insight they’ll need in order to make a pair of well-informed decisions on both subjects.

Honeycutt, 62, is a retired teacher who has lived in three different countries over a nearly 25-year span dating from 1986 to 2009 when she finally retired after educating an untold number of children from literally around the world.

Honeycutt, who holds a B.S. in Education from Texas Tech (1972) and a Masters degree in Education Reading from North Texas (1977), now resides in beautiful Cibolo, Texas, a small city of approximately 15,000 that lies about 30 miles north of San Antonio. As an educator for the Department of Defense Dependent Schools from 1985-2009, Honeycutt knows what living abroad is like better than most people ever will.

You see, the always-cheerful South Texas resident once resided in Germany, Cuba and Japan. She shared some her thoughts on living abroad in an effort to help assist people everywhere.

I always lived outside the military base wherever I was except for at Guantanamo. There…you had to live on base,” Honeycutt said. Without getting into the politics of it all.

Living abroad is an awesome opportunity. You actually get to see the country as it is and not through a tour bus. The country becomes yours. It’s your playground to live in. It broadens your horizons…meeting new people, understanding new cultures…seeing the world from their eyes and how they see things…not necessarily from ours.”

Honeycutt spent 10 years living in Germany (1985-1996) and four more at Guantanamo Bay Cuba (1996-2000) before finishing up her career in Japan from 2000-2009. When it comes to retiring abroad, she says there are a multitude of things that people need to consider.

Financing

When it comes to financing, Honeycutt says that everyone needs to be very aware of the cost of living in each country.

They need to know what cost of living is in that country because they’re so different,” she said. “Some countries you can live in cheaply others you can’t unless you’re very wealthy.”

Honeycutt goes on to describe some destinations where people can live abroad comfortably.

Places you can live and live quite comfortably include the Philippines, Mexico and Thailand…most of them are third world countries,” Honeycutt said.

Expensive

Anywhere in Europe is generally expensive, especially now that the Euro has surpassed the U.S. dollar,” Honeycutt said. “Japan is now extremely expensive as well,” she added.

Quality of Life and Safety

Arguably the most important thing people will need to know is their potential new home’s quality of life and their overall safety factor, points Honeycutt agreed with me on.

“You know what the quality of living is in that country,” she said. “To me that would be a given as far as what I’d need to know about possibly living abroad. Some places, like the Philippines, you can live like a king…literally. You can have house boys and housemaids, but then you have to look at the other qualities there. The Philippines have a very high theft rate, so you don’t have a whole lot of women looking to move to the Philippines…things like that,” she pointed out. “Is it safe…in terms of government? What kind of government am I looking at? Is it stable or unstable?”

Find the Right Neighborhood

Of course, one of the other things that homeowners potentially living abroad may want to consider is where exactly they will reside in their new home.

When asked what the best way to decided on a specific neighborhood is in your new country, Honeycutt offered her sage advice.

“I would go visit the country (as opposed to searching online) because then I would have a better idea of what I’m dealing with…in terms of what am I really looking for,” she said. “If I don’t know that country, I’m going to have to go online or come up with another game plan and for me, that would be… to go see it.”

To Expat or Not?

Honeycutt suggested that those looking to retire abroad may want to look at whether or not they want to move into an ‘Expat’ or not.

“People planning on potentially moving abroad will want to look at what’s called an Expat (expatriate) neighborhood or not,” she said. “I didn’t live in an ex-pat neighborhood because I went to experience the world, not hang around a bunch of other Americans,” she said laughing heartily.

Honeycutt did go on to say that Expat neighborhoods do have plenty of value in terms of familiarity and other areas that might make ‘foreigners’ more comfortable in adjusting to their new surroundings.

Guide on How to Buy Homes in Costa Rica!

Now, before we move further along with some more tips for retirees that want to possibly live abroad, here are some of the steps you need to take if you’re thinking about buying a home in Costa Rica.

Learn the Process!

The first thing prospective buyers should know is that, while the home-buying process in Costa Rica is very similar in process to the one used in the United States, prospective foreign home buyers should know the requirements they need to meet and the rights they’ll have in their new homeland as property owners.

‘Folio Real’

Almost all properties in Costa Rica have what’s called a ‘folio real’ or property tracking number. These properties are registered in a centralized computer system at the offices of the Public Registry in San José. Make sure a title search is performed in the folio real for any prospective piece of property you plan on purchasing.

To LLC or Not!

Believe it or not prospective Costa Rican home buyers, it is a lot easier to complete the home buying process if you form a Costa Rican limited liability corporation, better known as a ‘Sociedad Anónima.’

While this method may not always seem appropriate, the corporate structure usually helps make the home buying process less stressful –and a bit cheaper too.

Just know that property located within 150 meters of the waterfront is known as “concession land,” and there are restrictions on foreign ownership, so don’t go getting your hopes all high for naught.

While there are no hurricanes on the Pacific Coast, earthquakes are always a big issue in for those on the ‘left coast’ as we call it here in the U.S. All construction must meet unyielding earthquake safety standards if you plan on having a home built in Costa Rica.

The good news for homebuyers with a verifiable pension or investment income is the fact that they can apply for ‘pensionados’ status, which offers an array of benefits.

Find the Right Agent!

Okay, prospective Costa Rican home buyers, depending on your needs and monetary situation, it may or may not be feasible for you to travel to your potential new home a few times in order to check out potential property, but either way, you’re going to need to find a very good real estate agent to help you out. A good real estate agent has the means and access to search thousands of homes quickly to help find the type of home you’re looking for without you having to travel all over the place while wasting valuable time and money.

So, there you have it prospective foreign home buyers…a quick guide on how to buy homes in Costa Rica. Now, let’s get back to a few more tips on retiring abroad, even if it’s not in beautiful Costa Rica!

Amenities to Expect

People who are thinking of relocating may also want to strongly consider the potential amenities they’re going to have available in their new country. I mean, let’s be for real…no one wants to move to a new country only to find they can only use running water four days a week.

“The amenities they are going to have at their disposal depend on the country itself,” Honeycutt said. “In Europe, you have every amenity in the world. In other countries, you’re going to have electrical problems like brownouts and blackouts while other countries have continual problems with cable TV and other services.”

Prepare for Challenges

Another thing that people planning on retiring abroad may want to consider is the challenges they will face in their new destinations. What once may have once been a routine act could potentially become a frustrating experience you never forget. Here are two huge challenges aspiring retirees will want to consider.

Language

Language is always the first and foremost challenge that people face when moving to a new country that doesn’t speak their native language. Many folks find learning a new language a task not worth partaking while others can master a new language in no time at all, transitioning seamlessly into their newfound cultures.

“You also need to think in terms of language,” Honeycutt said. “Is there going to be a language barrier and how much of a barrier?”

Medical

One of the other important areas that people who are thinking about retiring abroad should be most concerned about is the medical care in their potential new homeland. Honeycutt admitted she didn’t know much about medical coverage overseas, but understand its importance.

Well, I don’t know much about the medical situations in these other countries because I was under military coverage, so that makes a difference,” Honeycutt admitted. “You need to have a really good idea of what medical care is going to be like within that new country because that’s a big factor.

Living Abroad Under the US Government

For both those who are going to retire abroad with a connection to the U.S. government and those who aren’t, life will be very different according to Honeycutt

There were benefits I had that others would not have,” she said. “I had use of military facilities, the commissary… the BX. Others may find it a bit more challenging…even with finances.”

Use of Online Assistance

When it comes to using the Internet to find out more about your potential new home abroad, Honeycutt says that’s fine and well, but nothing beats finding out about a place by seeing it firsthand.

I think of the Internet like it’s kind of campaigning, so I’m a little leery of it, but that’s just my own thoughts,” she said laughing.

“The countries are going to show you the best parts of their countries online. They’re not going to tell you or show you that you need security outside of your home to keep people out,” she said. “I think you can find a lot of the pricing online and things of that nature, so the Internet is very good to use as well.”

So there you have it– the best tips for those planning on retiring abroad and a handful of tips on how to buy homes in Costa Rica…and hey, if you’ve got a spare room for a certain writer you know, just drop me a line.

Related articles:
I’m going to retire. Now what? (part 2 of 2)
During retirement: where do you want to go next?
Prepping your military finances for an overseas move
Lifestyles in early retirement: long-term travel
Old-school frugal (part 2 of 2)



WHAT I DO: I help you reach financial independence. For free. I retired in 2002 after 20 years in the Navy's submarine force. I wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other financially independent servicemembers, veterans, and families. All of my writing revenue is donated to military-friendly charities.

5 Comments
  1. I recently came across a new retirement site retirementandgoodliving.com that selected the top 10 retirement locations abroad for 2013 also covers many other retirement related topics

  2. This was a very interesting article; a romantic part of me keeps bandying about the idea of retiring abroad.

    There were a couple of topics which are important to know about that might be appropriate for another guest post some time:

    1. Visa requirements. It’s different for every country, but you can’t just waltz into Country X and expect to live there without getting appropriate residency permits.
    2. FBAR and FACTA requirements. If you keep more than $10k in a foreign bank account, this will affect you.
    3. Healthcare abroad – questions like keeping U.S. based health insurance for when you visit the states and applying for Medicare at age 65 are important issues for expats.

    Thanks again for the article – this was much more fact-based than some of the salesy pie in the sky websites and articles are.

    • Thanks, Jason, I’m always looking for good expat/travel guest posts. For some it makes the difference between staying at their jobs or financial independence.

      Chapter 6 of “The Military Guide” has the story of two Army veterans who were able to reach financial independence and leave the service in their early 30s by deciding to live in Panama. The cost of living is the key.

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