Finding Opportunities with Overseas Retirees
Over the next few decades, more and more retirees are expected to purchase property abroad for their so-called golden years. If you live and work in a prime retirement destination, you’ve probably already witnessed the trend. But if you’re located elsewhere, are there ways to tap into the outbound side of this market? Here are some tips from professionals who know how this market works.
Where to start
Educate yourself as much as possible on the global retirement market with the intention of identifying a specific niche to focus upon. In overseas retirement, niches are typically based on destinations and/or the type of property. Since very few buyers in your local market are likely to relocate abroad, you’ll have to look outside your immediate area to grow your practice.
Once you’ve narrowed your focus to a particular area, start planning your first visit to learn more and establish key contacts. Much of this legwork can be done by attending international meetings and conferences such as the REALTORS® Conference & Expo. (See the November 2013 issue of Global Perspectives for lots of networking tips and details on various events.)
At these meetings, ask other CIPS designees about people they know who are doing business in the country you’re exploring. “By being actively involved in networking events, I’m always able to talk to people I know and trust,” says Vanessa Falcon, CIPS with Jameson Sotheby’s International Real Estate in Chicago. “It’s much better to develop relationships and work with other real estate practitioners that I come to know and trust and ask to be referred to their trusted connections for advice on legal and financial matters.” Falcon also notes that it’s not uncommon to find an expatriate agent from your own country who is selling overseas. Network through them to find more connections and hone in on an area that attracts foreign retirees.
Travel to investigate your destination
Before you begin assisting retiree clients outside your borders, it is important to have adequate knowledge and connections in that country. Make plans to travel and spend time in your preferred retiree market for at least a week but preferably longer. Set up meetings before you travel and ask local agents to show you representative properties, highlights of the city and local health care facilities.
Your buyers will need assistance in navigating legal, tax and other issues. Working through your connections, set up a day of meetings with local professionals who you may want to recommend to your clients. These should include tax advisors, local attorneys, notaries, bankers, title insurance agents and even property managers.
Expat retirees can also be a valuable source of information and advice for newcomers. Before traveling, visit and follow expat forums for your destination country to see what issues are being discussed. You could even contact forum members prior to traveling and make plans to meet them to get their first-hand perspectives on moving. Ask them about issues like health care, quality of life and personal safety.
Working with developers
Sometimes retirees are more comfortable moving to planned communities where they feel safer and have easy access to desired amenities. Many overseas retirement destinations already have planned communities or new ones in development, especially if retirees have been moving there for years.
“If you work with developers, make sure they are reputable and their financials are sound,” says Falcon. “The project should already be funded, the building permits approved, and hopefully they can point to other projects on which they have established a good track record.”
Second homes as retirement properties
Many buyers initially purchase homes overseas for vacation purposes. “Most people don’t buy retirement homes. Instead, they buy second homes with the thought of potentially using them later for retirement,” says Bill Clover, President of Panorama International, Inc. in San Antonio, Texas. “They split their time and possibly rent the property when they’re not there.” Second-home buyers may need the services of a property management company.
Educating potential buyers
Moving overseas for retirement may seem like the adventure of a lifetime, but it’s a decision that must be made carefully. Emotions can crowd out factors that affect long-term happiness. Retiring abroad to live cheaply is heavily promoted in the news, online and in publications targeting seniors. You’ll do your buyers a service if you draw their attention to important issues to consider before pulling up stakes and moving overseas.
Some topics to discuss:
• Distance: How do you feel about living far away from your family? Door-to-door travel times can be easily found online. For example, the shortest flight between Chicago and Cuenca, Ecuador is 11 hours with two stops.
• Health care: Is good medical care available and at what cost? Are there nearby clinics and an accredited hospital less than an hour away? “If a community does not have a hospital, there should be a Medevac service available,” says Clover.
• Language: Will you need to learn a new language? Or do you prefer limiting your search to destinations (or specific communities) where you can easily speak your native language?
• Weather: Will you enjoy the weather during all seasons? Is the area vulnerable to extreme storms or other natural hazards?
• Familiar faces: Is it important to live among expats from your home country? Or are you more interested in making new cross-cultural connections?
Other important topics
Depending on their circumstances and where they’d like to move, your buyers may also need to evaluate these issues:
Second careers: If your buyer is interested in starting a small business, are they allowed to do so under the country’s visa laws?
Tax considerations: Become familiar with the tax laws in the country(ies) you are focused upon, but also be able to refer your buyers to experts who can give professional advice since tax laws can make a big difference in the cost of living in one country over another.
Real estate practices: Some countries place restrictions on foreign land ownership, and in most countries real estate professionals are not licensed. It’s important to deal with honest, reputable professionals who understand property law and transfer.
Covenants and restrictions: If your buyer is considering moving to a planned community or condominium development with rules concerning things like the age of residents, property maintenance, pets, etc. make sure they find these restrictions agreeable and advise an attorney review. (Be prepared to recommend someone with known experience in this area.)
Financing: Buyers should also know that financing to foreigners can be difficult or unavailable in other countries. In Latin American countries, for example, sales are traditionally conducted in cash, even for natives. The concept of borrowing via a mortgage is relatively new. In Mexico, however, financing is generally available, but your client should expect to make a substantial down payment.
Local and country-specific risks: Buyers will want to be sure they are moving to an area with low crime rates and political/economic stability. While every country can encounter economic swings and political shifts, you’ll want to stay informed about such topics and be able to point your buyers to reliable sources for more details.
The rent-first option: Moving to another country is complicated and expensive. “If they have any concerns at all, people should rent before buying,” says Falcon. “Undoing a move is difficult and under some circumstances unaffordable.” Or, if a buyer has the resources, purchasing property as a second home before retirement gives them an even better opportunity to “test drive” life there.
There may be a large number of Boomers approaching retirement age in your local market, but few of them will likely be considering an overseas move. How do you broaden your leads beyond your immediate geographic area? This is where online marketing skills become essential. Falcon offers the following advice:
- On your website, create an area focused on international retirement and second homes. Its content should be rich in relevant search terms. Make it educational, discussing not only the advantages of retiring abroad but also the pitfalls and concerns. (See earlier list for potential topics to include.)
- Write a blog that presents you as a trusted source of well-balanced information that stands apart from sites intended to “hard sell.” Explain how the decision to retire abroad is complex and why expert advice can save time, money and heartbreak.
- Conduct webinars on different aspects of retiring abroad. Promoted online and archived on your site, webinars expand your reach far beyond your local market.
- Social media can also be an excellent way to extend your reach and make connections with others who share your interest in a particular destination.
- Supplement your CIPS designation with NAR’s Seniors Real Estate Specialist designation, which offers education to help agents counsel clients ages 50+ through major financial and lifestyle transitions in relocating, refinancing, or selling the family home.
The role of the domestic agent in the international retirement market is evolving. Growing a niche in overseas retirement may require you to extend your reach far afield to find retiree and second-home buyers. It will definitely involve travel and on-the-ground networking in the region you promote. “The business model for this segment of the global market is still in development,” says Falcon. “Abroad, it will be all about who you know and trust. Finding the buyers? That’s the bigger challenge for most agents.”