Bargain destinations, vacation values, and international travel adventures.


The Cheapest Places to Live, Late 2008

September 15th, 2008 Posted in International living/working, Long-term travel, Work/Life/Travel Balance

Some of the most popular old posts from this blog are the ones about the cheapest places to live around the world, something I started writing about back in 2003 and then continued each year thereafter.

The thing is, those posts tend to get out of date, except for the parts about seeking out current in-depth resources instead of looking for an easy quick-fix answer. I’ll say it again: if you’re serious about picking up and moving somewhere less expensive, do your homework and invest in knowledge. No, that doesn’t mean you have to attend some expensive seminar with guest speakers in some far-off city, but it does mean you should invest in some good books, e-books, and reports on the destinations that look interesting. Take a scouting trip on vacation. Subscribe to International Living for a while if you’re not sure where you want to end up. (They’ll bug you to death with breathless pitches for products and seminars they make more money from, but just ignore the noise and read the magazine.)

If you go for the free info you find on sites like EscapeArtist.com, make sure it’s current. Panama used to be a fantastic deal, especially for retirees. Now? Not so much. Good incentives still, but much higher prices. Parts of Europe that were a good deal before the euro appreciated by 45% are far more expensive now, especially for American buyers coming over with devalued dollars. If you’re reading an article about how good the buys are in Roatan or Boquete, check the date. You’re probably at least five years too late unless you’ve got a lot of capital. Seek out expat message boards for the country or city you like to get the current scoop.

While most of Latin America has stayed pretty stable against the dollar from a currency standpoint, there are notable exceptions. Commodity-rich Brazil and Chile are booming, with a strong economy and a resulting stronger currency. Prices have risen considerably in both countries over the past two years. Colombia’s currency has risen as the level of safety has improved. Meanwhile, anyone who invested in Venezuela has gotten hosed.

Some coastal areas in Mexico and Costa Rica saw ridiculous speculation spikes akin to the bubbles that have burst in the U.S. In fact, much of what has been driving the increases there is the influx of “crazy California money” from retirees who had sold their home for a frothy price and were perfectly willing to pay a frothy (but lower) price in Puerto Vallarta, Los Cabos or the northern Pacific coast of Costa Rica. Avoid those areas if you’re not flush from a recent sale.

In fact, avoid any place where you seem to see as many gringos as locals on the streets.

So, where are the cheapest places to live now? As always, cheap places to travel are usually cheap places to live, assuming they don’t make it next to impossible to do so legally. (I’m talking to you Indonesia!) If it’s a good value plus they make it easy to become a legal resident, that’s the ideal. To varying degrees, those candidates would be Malaysia, Honduras, much of Mexico, Nicaragua, Ecuador, Argentina, Uruguay, and parts of Belize (for now) for Americans, much of Eastern Europe for Europeans. But check out the other places in The World’s Cheapest Destinations too and remember that for short stays, you can usually get by with a few visa runs. For permanent residency, in some cases you either need company sponsorship or a local spouse. The U.S. and Europe aren’t the only places that are ambivalent about immigrants.

International Living’s new Top Retirement Havens issue is out now and while it’s geared to those who are done working, there are always plenty of examples in the magazine of those who have retired early or are laptop telecommuters who can do their job from anywhere. The only catch is that you usually need to be of a certain age (and have a verifiable income stream) to qualify for incentives. Or you have to invest in the economy there by starting a business. For nine of these countries, you can find overviews of the requirements in Traveler’s Tool Kit: Mexico and Central America.

The new IL report still ranks Mexico the highest overall, but noting that even they only got a score of 77 out of 100. “No place is perfect.” Some places that ranked highly overall, like Italy, France, and Australia, made up in other areas for a cost of living that was high.

In terms of costs for a resident, the data presented in this report is far from helpful. They mostly rely on cost of living reports put out by others, which are based on costs for working executives and state department employees rather than what you or I would spend living somewhere. The answer to, “What does it cost to live there”? depends on whether you live like a local, live in the exact same style you had at home, or somewhere in between. One couple profiled in the magazine lives in a small town in Ecuador for $600 a month. They eat out most of the time because their 3-bedroom apartment is only $150 a month. I’ve gotten e-mails from people living on Utila, Honduras for about the same. But an investment banking analyst sent to Quito or San Pedro Sula may spend five times that.

Based on what I’ve seen in my research, if I didn’t already have a little beach house in Mexico, I would be buying something in a highland town in Ecuador, Montevideo in Uruguay, or some not-overrun town in Colonial Mexico. The funny thing is, I’ve only been to one of the three. The numbers just look like “can’t go wrong” propositions in the others. If you rent though, purchase prices don’t matter. Just find a place you like, settle down for a while, and see how it goes. If it doesn’t work out, move on.

  1. 16 Responses to “The Cheapest Places to Live, Late 2008”

  2. By Tony on Sep 15, 2008

    Hey thanks for keeping this updated! These things go out of date really quick. I really like this new update (the places that is). On a side note I found a cool website that i think you would like, its called, baraaza.com So check it out, and see if you like it or not :P

  3. By james yarbrough on Sep 23, 2008

    I am retired and wish to live on my retirement someplace other than the states. I am interested in Mexico but do not know where. Somewhere near water. I make $1239.00 a month and would like to know if one could live good, not extravagant but a good peaceful life. Do you have any suggestions? James

  4. By Jorge on Sep 24, 2008

    Hey man thanks for this post! I’m a web developer from Argentina and I can pretty much work from anywhere. I’m looking to move somewhere new (and cheaper!). This is a good starting point. Thanks!

  5. By Grandad on Oct 25, 2008

    James–My daughter and her husband live in a beach town on the Pacific coast (not one of the resort towns) and spend an average of $2K a month on everything. They’re not living like natives and eat out a lot, but they’re not blowing money like free-spending retirees either. I imagine a single person could manage it on your income, but you would need to find an apartment that’s priced for locals and not for “rich gringos.” The longer you’re there, the less you’ll spend probably.

  6. By kish on Oct 26, 2008

    buddy, i have £10,000 sterling and thats it.

    i’ve quit my job cos i pretty much hate it. i’m a dentist. (u understand now…lol )

    so i need a place where i can just buy some time….. any capital city anywhere….

    and maybe find a life or make a living somehow… … ?? any ideas??? any where mate. if u can give me your top 3 destinations… i’ll research em…

    thanks mate, appreciated.

  7. By tim on Oct 26, 2008

    Kish, different places for different tastes. I can’t answer this more than I could answer “What kind of woman should I marry?” Cost of living is only the start. You could read my book to find out which places are the cheapest in relative terms—the broad strokes—but after that it depends on your work situation and what kind of place you’re looking for. There are hundreds of cheap places around the world to live, so the best first step is to pick a region and start looking around.

  8. By scott on Oct 28, 2008

    Readers, please be careful with any assumptions based on all the information you read. I’m just back from Montevideo, Uruguay and I loved it overall. The cost of real estate was quite reasonable — more of a bargain for New Yorkers and Californians than those of us in the great middle of the country. But, the blatant force of two or three other factors startled us. In no particular order: 1. Eating out is astonishingly expensive for undistinguished food in an ordinary pleasant atmosphere — $175US for 3 w/out alcohol of any sort. This is far out of line with the local cost of living, but standard for eating out. 2. Uruguayan Spanish is almost incomprehensible to North American Spanish-speakers. It is actually Castellano or Rioplatesense. In Asian countries Caucasians are not expected to understand local languages. In Uruguay, there is a complete puzzlement that you do not understand what clearly everyone should. 3. Although we consistently encountered extremely gracious and helpful people, Uruguay is a remote country with a highly developed local culture. Despite an appearance of worldliness, it is not a cosmopolitan center, eg, there are practically no Asian (or ‘foreign’ except Italian) restaurants in Montevideo. Bookstores often stock largely Uruguayan books. In general, things are done the way they are done because that is the way they are done and eveyone knows that.

  9. By kish on Oct 29, 2008

    ….:)

    i’m not that fussy…..

    i’d marry any chick for a week or two.

    ha
    thanks

  10. By tim on Oct 29, 2008

    Scott, thanks for sharing your experience in Montevideo. It seems bizarre that meals would be that expensive when they’re so reasonable right across the waterway in Buenos Aires. Seems like you could take the ferry over for dinner and still come out way ahead!

    I’m with you on the Castellano Spanish. I can understand a lot of what I hear in Spain, Mexico, or Peru, but am completely lost when listening to someone from Uruguay or Argentina.

  11. By Sally on Nov 1, 2008

    Hi All,

    I strongly recommend the South Island in New Zealand. I bought a nice house there 2 years ago in Oamaru ($110,000 NZD), five blocks from the ocean which it overlooks. Only negative is that they will only permit me to be there a maximum of 12 months out of every 24 months. Currently I plan to divide it to 6 months stays, which is acceptable but I have to have another country, cheap (NZ exchange rate is excellent, currently 1USD = 1.72 NZD)in which to live the other 6 months and would appreciate info on Cuenca, Ecuador which I have been considering tho never been there. I have very limited funds so rent out my house in NZ when I am not there which, is profitable. Since I have very limited monthly income, I can’t afford to buy a house in the U.S. and pay the taxes and insurance as they have become completely unreasonable in this country. In NZ my property taxes are $1,600 a year and unlimited water, sewer and garbage is included in that charge. I’d live full time in NZ if I was permitted to. Have been going there for several years and it is Utopia to me……..Sally

  12. By Sally on Nov 1, 2008

    By the way, that $1,600 for water, sewer & garbage is NZD!…..Sally

  13. By matt on Nov 2, 2008

    I should’ve come to this site before leaving NZ. I was there and thought Mexico would be cheaper for me. Landed in Ajijic, Guadalaja and find it too expensive for me. I’m trying out maybe somewhere in Chile or maybe other part of Mexico. Leaving in few days and will probably end up in NZ again. Cook Island, or any of the south pacific island will be a good choice.

  14. By heather on Nov 5, 2008

    hello to everyone!!
    I have a few questions, Everyone here seems to travel alot, which i would love to do ,but Im wondering what some of you all do for a living to be able to travel and buy houseing in diffrent countries.. I am soon to be 22 and i have a great job in retail as an assistant manager in a well known store. I make good money .I want to travel but once i left my job i would have no income.. How do you guys do it? I would love any advice or tips. Everyone here seems to know alot about traveling and stuff.. Thanks so much for your time

  15. By tim on Nov 5, 2008

    If you’re young, you don’t have savings and investment/real estate income yet, so you work. I’ve taught English in two countries. Others work as scuba instructors or in other tourism industry jobs. But these days, probably more people just have a job that requires a laptop and an Internet connection. If that’s all your job requires, you can do it from almost anywhere. Move to a cheap country and you don’t need nearly as much to pay your day-to-day expenses. There are some good resources on the website at this link: http://www.worldscheapestdestinations.com/id17.html

  16. By Kim on Nov 19, 2008

    My husband and I have two young (10 and 5) children. We want out of here (the US) We will have some savings this year but are tired of always feeling like its a struggle and have no “extras” to speak of. We know we could go somewhere else and enjoy life with the money that we are making instead of a consatant struggle. I homeschool my children so education system is not a concern. We will do our research but wanted some suggestions to start.

    Thanks!!!!

  17. By tim on Nov 19, 2008

    Kim–I’m going to Mexico for a year with my family starting middle of 2010. That’s easy, close, and reasonably priced. Ecuador is even cheaper and has cooler temperatures in the mountains. But heck, if you’re home schooling you can go most anywhere, so figure out what matters to you and start looking around. I just emphasize Latin America because it’s easy to stay a year or more legally there as opposed to say, Thailand. But there are lots of expat families all over that have done the research and the trial and error. Just tap into that system and you’re set.

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