When heading out on vacation in 2016 you may turn to VRBO.com or Airbnb to find a room to lay your head when the day is done. Basically, you’re helping some other lucky soul pay for their exotic home away from home. It’s very enticing to jump in to the game, but there are 8 things you need to consider before jumping on the B & B bandwagon (besides how awesome the beaches are).
1 – The Geography
There are plenty of pros when you think of the geography of your dream country. It’s all of the obvious reasons you chose this place to begin with. In Costa Rica there are beaches on two different oceans all within a days’ drive from the airport, an “easy to reach” International Airport with a flight of no longer than about 10 hours from anywhere in the USA.
What are your CONS? You have to consider these, and you need to put more weight on them than the PROS, because these are the headaches and the buyer’s remorse. Costa Rica, for example, seems very easy to travel in. The truth is, the roads are stomach turning, and the drivers are “get the job done” aggressive. A full day of driving will put you into most parts of Costa Rica, but it is not for the wary. On the West coast peninsula, there are spots that still require 4×4 to get to. How are you going to get your car there? How about your boat? Will your family and friends visit you?
2 – Real Estate
How is the market? Do vacation rentals easily rent? Can you own outright or do you need to incorporate or develop a trust? PROS – In Mazatlan for example, the Mexican Government has gone out of their way to make purchasing easy for foreigners and because of NAFTA they can never expropriate your property. CONS – you may need to set up a trust for the purchase. Your transaction will be handled by a Notary and you will not have the same luxury of a buyer’s agent and 45 pages of legal documents to protect you in the transaction.
3 – Demographics
What are you looking for in retirement or in a vacation home? Are you more comfortable being surrounded by expats, or would you prefer a cultural experience? Is there resources for seniors? Is it well educated? It is very easy to spend a week in a cute tourist town, meet a couple of expats at a bar that seem to have the dream, but it’s another thing to all of a sudden realize you are the outsider.
PROS – There is an outstandingly eclectic mix of people in many destination towns of both expats and tourists, each may draw you in. CONS – If you’re a young entrepreneur will there be enough young people to sustain your business ideas? Retiring? How many seniors will be there to join you in your leisure?
4 – Government
This is probably the biggest. Do they allow foreign ownership? What are the taxes like? How similar is the government to your own. How anxious might you become if you land in a country very different from your own like Venezuela?
The PROS and CONS on this one completely vary by your needs and where you’re headed. Mexico for example, has a very similar government structure to ours, however you must remember to pay your bills and taxes because you won’t receive a notice. In a number of countries you have to watch for corruption. More than once an expat has been asked to pay a police officer cash in lieu of procedure…in more than one country.
5- Economy & Business
My personal overseas goal would be to own an Airbnb. Yours will be different, but no matter what your reason watching what the economy is doing in your country of choice is critical. Is it booming? Well that’s terrific for infrastructure, but your real estate is going to be sky high. Is it on a down turn? You may get that little coffee shop on the cheap, but where will you find your business?
6 – Infrastructure
A country cannot easily sustain economic growth without essential infrastructure. Emerging economies struggle with whether to invest in underdeveloped infrastructure and leaders in developed countries struggle with aging infrastructure.
Consider the hospitals. What happens if you’re retiring and suddenly need some medical care? Also the schools, roads, bridges, seismic upgrades, trash collection, and grocery needs. Does your country provide you with all of the luxuries or necessities that you require?
7 – Beyond the Basics
A country’s ethnicities, languages, religions, traditions and history create its unique identity. Understanding a nations culture facilitates working with its people, places and in business matters.
Go through all of the obvious reasons to move or not to move, then dig a little further. Go beyond. Can you live with nothing but Indian Soap Operas, or Spanish Novellas? Will you be happy not being able to order anything you want from Amazon.com. What is the main religion of your new neighborhood? How far will you have to drive if you all of a sudden need to buy a new surf board, or motorcycle?
I recently witnessed a young man carrying a TV (not a flat screen mind you), in his hands on the back of another man’s motorcycle up a very steep gravel road to get it home. To get that TV he had to take a ferry an hour and a half each direction before worrying about that gravel road.
The 8th thing to consider – Your Actions.
Planning and patience. It is so easy to daydream while you’re sitting in your cabina, owned by a French Lady that appears to do nothing buy surf all day. You add up her income… 10 full cabins, $70 each per night… oh, lord she’s making $700 a night! Living the dream! Sign me up! Wait!!! What is her overhead? Does she actually own the building or could it be expropriated by the government at any time? How often does her place sit empty? rainy season? Rebuilding after storms?
Go have an amazing trip at a beach town, but before your endorphins get the best of you come home and find a Certified International Property Specialist (CIPS). These are trained professionals that are here just to help you vet out those pros and cons and they are connected globally to make sure your real estate professional on the other side of the deal is there for your best interest.