Day 26: Step #10, Finding New Digs Overseas
How To Find A Rental In A Foreign Country
Dear Student,
As we’ve been discussing, you want to rent first (not buy) in your new home overseas, wherever that turns out to be.
The question on your mind, therefore, is likely: But how?
How do you find a rental in a foreign country?
The best way to source a rental in most places around the world is by word-of-mouth.
You can search on the Internet, but, as with property for sale, the rentals you find this way are typically the most expensive, certainly if you search English-language sites in a non-English-speaking market. Your chances of getting a better deal are increased if you reference sites in the local language. Still, going this route, you’re going to find only those properties for rent by locals with the wherewithal to advertise on the Net.
You can also source rentals through local print classifieds. This can be an effective method, a way to penetrate the local market and to gain access to local pricing, but only if you read and speak the local language fluently.
Understanding Spanish well enough to read a rental property listing in a local newspaper in Buenos Aires, for example, isn’t enough. You’ve got to be able to speak Spanish well enough to have a conversation by telephone with the owner to arrange a viewing appointment. Then you’ve got to feel comfortable enough in your Spanish to meet with him (or her) in person, at the property, to ask your questions, to negotiate the price and other particulars, and, ultimately, to review the rental agreement (which, of course, will be in Spanish if that’s the language of the country where you’re shopping). I’ve known many people who’ve successfully sourced rentals this way and been happy with the results, but I, for example, couldn’t do it without help, not in a market where the language is Spanish. Mine isn’t good enough.
The most efficient and effective strategy, therefore, certainly if you’re not fluent in the local lingo, is to ask around. You can begin this process before you arrive in your new home, but finding a suitable rental in the right location for you at a good price can be a difficult thing to accomplish from afar.
Two months in advance of the date we planned to move from Paris to Panama City, I tried to launch our search for a rental in the Panamanian capital. I sent off emails to friends, business contacts, and property agents in the city.
Everyone replied to say, in effect: “Searching long-distance for an apartment or a house to rent in this market is going to prove nigh on impossible. Much better to wait until you’re here in person. Probably any time you invest before you’re on the ground will prove wasted.”
The Panama City rental market at the time (this was a decade or so ago) was an extreme example. It qualified as one of the most active short-term rental markets in the world. The would-be renter had to be ready to act. If you hesitated (showed up to a viewing without your local bank checkbook, for example, and therefore unable to write a local check for the deposit on the spot), you risked losing out.
Few markets are this competitive. But there’s another, more universal reason it’s not easy to try to shop for a rental apartment in one country while you’re sitting at home in another.
Say you ask around from the comfort of your armchair. One of your sources replies to tell you about a rental in such-and-such neighborhood available for such-and-such price. It sounds great in the email, the best value you’ve come across. But is it a place you’d want to live? Making that determination without having seen the place yourself can be dangerous. Maybe you’d trust your best friend or your significant other to scout and secure a rental on your behalf, but I’ve known even that to backfire.
The problem is that you can’t believe everything you read on the Internet.
A reader who was in Panama City recently, shopping for an apartment to rent, stopped by our office to update us on her search.
“Well, the person who put together the Internet ad for the apartment I just viewed should win some kind of a prize!” she exclaimed.
“His photos made the place look big, bright, and beautiful. In fact, it was small, dark, and dingy.
“Plus, the photos with the ad included one showing a swimming pool. So I asked the agent showing us the apartment if we could see the pool.
“‘Oh, there’s no pool in this building,’ she replied.
“‘But the ad online shows a swimming pool,’ I said.
“‘That pool isn’t here in the building. It’s nearby, at the Marriott Hotel down the street…’”
It’s not the end of the world, of course, if you rent an apartment sight unseen that turns out to be less than you were hoping for (or led to expect). Eventually, the lease term will expire, and you could move wherever you like. Maybe you could even negotiate with the landlord to get released from your rental contract early. However, in some countries, this is not easily accomplished, and, regardless, the negotiation is a hassle you don’t want during what should be the honeymoon period in your new home in paradise. Better to set your own two eyes on a place before you hand over the security deposit and the first and last months’ rent (as you’ll likely have to do, though sometimes these terms are open for discussion).
It may sound like a non-strategy, but the best approach is simply to make a reservation at a hotel located in the area where you think you’d like to live. Plan to stay up to four or five weeks. It may not take you this long to find a place to live more permanently, but don’t be discouraged if it does. We were guests of the Granville Hotel in Waterford, Ireland, for a full eight weeks (we negotiated a discounted long-term rate with the manager) before we finally found the rental cottage that became our first home in that city. Easing into a place this way gives you a chance to get the lay of the land and to take your time considering your options.
We knew not a soul in Waterford, Ireland, when we first arrived in this city as foreign residents nearly 20 years ago. We were out of our element and on our own, with no local network of support. We quickly figured out that the Irish property market, for both sales and rentals, doesn’t much resemble the one in the United States (there’s no Multiple Listing Service, and agents don’t share listings). We knew that the ideas and expectations we’d brought with us from the States had to be adjusted. But how? To what?
Our challenge was particularly great because we were trying to find not only a house to rent, but also an office. We began making inquiries about available rentals at the front desk of our hotel, of fellow shoppers standing in line at the grocery store, of fellow parents at our daughter’s school, in the bank, and of every taxi driver we encountered. Finally, someone gave us the address of a small office he thought might be available for rental.
By this time, we were nearly desperate, so, new lead in hand, we headed across town immediately, without an appointment (for we had no phone number, only the address), to knock on the door of the office in question. Is our information correct, we inquired of the nice Irish lady who opened the door to greet us. Is this office for rent? Indeed, it was. We negotiated a price and terms on the spot and asked if we could return the next day to begin setting up shop.
On our way out the door, I asked, as an afterthought, “Would you happen to know of a two-bedroom house for rent?”
The nice Irish lady did. She wrote down another address for us. Again, we walked out the door, down the street to the taxi queue, and took off in a cab to see the residence for ourselves. The landlord, it turned out, was at home in his own house on the same property. He showed us the place, the view of the river, and the garage where we could store belongings that wouldn’t fit in the little cottage.
We were won over, by the location but also by the furnishings. Rentals in Ireland, both short (a few weeks or a few months) and long (six months or longer) term, come furnished. On the one hand, this was welcome news for us at the time, as our furniture was in a container on a ship somewhere in the middle of the Atlantic Ocean. On the other hand, “furnished” is one of those words that loses something in translation from American English to Irish English. Even the higher-end rentals we viewed had but bare-bones furnishings. Some didn’t even have central heating (this would be much less true today), and few properties had things like dishwashers.
We were delighted, therefore, with our riverside discovery, which boasted “all mod cons,” as the Irish would say (all modern conveniences). We negotiated price and terms for renting on the spot. We sealed the deal, our second of the morning, with a handshake.
Here in Panama City, again, we’ve followed our own rent first advice… and continue today, three years later, to rent still, both our home and our office space.
The rentals market in this city is an interesting case study.
Before we bought the office we currently operate out of, we rented it—it is nearly four times the space as the office we rented previously. And our monthly rent increased 15%…
Friends are renting a two-bedroom house on the water… with a complete one-bedroom guest house on the grounds… on the east coast of Panama’s Azuero Peninsula for US$200 per month. I’ve been to stay there myself. This is a comfortable house built and finished to North American standards…
Another friend moved into a brand-new, loft-style apartment in a high-rise building in the trendy and popular El Cangrejo neighborhood of Panama City. He took us to see the place when he moved in. As he described it (and as I’d agree), “This is the kind of place you might find in Manhattan but that I’d never be able to afford there.” From his living room and loft bedroom, he has an expansive view of the city skyline, and the building features full amenities, including a swimming pool, a gym, a sauna, even a squash court. The rent is US$1,100 per month…
On the other hand, during our search for new and bigger office space back in the day, we viewed a building that was (no kidding) little better than a shell. It was a nice shell, of brick, with a red clay tile roof and interesting architectural features. However, the inside had been damaged by flooding, it appeared, and was not habitable. We calculated what we’d be willing to pay in rent given the condition, and what renovations we’d expect the owner to carry out before we took up occupancy.
When we called to inquire, we had to ask the agent to repeat the rental amount three times. We were sure we were misunderstanding or mistranslating the Spanish. But, no, the lady confirmed. The owner was asking US$36,000 per month…
We viewed commercial space on offer for as much as US$25 per square meter per month…whereas the high-end space we finally found to rent (and eventually decided to buy) cost us but US$9 per square meter per month when we were on lease…
Even harder to understand is the amount of office space sitting vacant around the city. There is growing demand, yes, but there is also big and growing supply.
A U.S. expat we know is renting in El Cangrejo, in a building two blocks from the building where the friend I mentioned above is going to be living. The first building is older, not as nicely finished, and lacking the amenities of our friend’s new pad. Both apartments are about the same size on a per-square-meter basis, but the first is less dramatic, as it’s not a loft. For the older, less nice place, the expat we know is paying US$1,500 per month…more than 35% more per month than our friend.
But wait, it gets even harder to understand…
In his research, our friend found other loft apartments available in his building, identical to the one he’s renting, on offer for as much as US$1,800 per month… more than 60% more than he’s paying for his place.
How in the world do you, the would-be renter in this town, make sense of all this?
Here are some Panama City rental fundamentals…which are transferable to most developing markets:
#1: There’s no such thing as the “going rate.” What you pay depends on what you’re able to negotiate…
#2: Direct comparisons are difficult…even, for example, when considering seemingly identical apartments on offer in the same building. Some are more expensive because they’re being offered furnished. However, “furnished” can mean a cheap bed, a cheap sofa, and a small, cheap table with two chairs. Some are more expensive because they come complete with what’s referred to here as “linea blanca”…that is, the white line (refrigerator, washing machine, dryer, etc.) installed. (Meaning you can’t take this for granted.) Some are more expensive because their owners are delusional or greedy. And some are more expensive because their owners don’t really care if they rent or not (see below)…
#3: Not all landlords care if their rentals are rented. In Panama City, for example, there’s a big universe of absentee Venezuelan and Colombian landlords. They’ve been parking capital in Panama City real estate for years, seeing this city and this country as a safe haven. For them, renting can be a hassle, a management headache, worthwhile only if they’re able to get a premium return…
#4: It’s possible to get a tremendous deal on a rental if you invest some time and shoe leather. That US$200-a-month house on Panama’s Pacific coast that our friends are renting? They never would have found that on an Internet site or from an agent. They found that house by word-of-mouth after having spent months becoming known and making friends in the area where it is located. The American owners wanted to rent to someone they felt they could trust to take care of their house as well as they would take care of it themselves. For them, this was more important than the rental yield…
So, again, it may sound like a non-strategy, but, for all these reasons, the best approach to finding a rental in a new place is simply to make a reservation at a hotel in the area where you think you’d like to live. Show up, check in, and hit the streets. Look for “For Rent” signs. Check notice boards in grocery stores and restaurants. Ask everyone you meet everywhere you go if he (or she) knows of an available rental.
Perpetual traveler friends Paul and Vicki face this challenge of finding a rental in a new place as often as two or three times a year, and this is the strategy they employ:
“Paul and I prefer to begin our search after we have landed in our city of choice,” Vicki explains. “However, before we arrive, we gather as much information as we can about rentals through friends, travel guides, and the Internet. We check into a moderately priced hotel then head out to the neighborhoods that sounded appealing to us in our research. We check bulletin boards in grocery stores, cafés, English-language churches, and laundromats. We read the local papers and chat with anyone who might have a lead. In small towns, we visit the local tourist office.
“We keep an open mind, while, at the same time, remembering what’s important to us. In a tropical climate like Chiang Mai, Thailand, we want a place with an outdoor sitting area. In big cities like Paris, we want to be close to public transportation and grocery shopping. In small towns like Chapala, Mexico, or Boquete, Panama, we want to be in the center of town, living like the middle-class locals. We always choose places where we can walk to most of the places where we want to go day-to-day.
“We deal only with owners. When a deposit is required, we amortize it over the number of months we intend to rent to give us what could be the real cost of the place if our deposit isn’t returned. (We’ve found that this isn’t normally a problem, but, remember, in a developing country, you have no easy resource for help getting your security deposit returned if the landlord decides he’d rather keep it in the end.)
“When eating out is cheap (as in Southeast Asia), we live without a kitchen. Sometimes we decide that our best bet is to stay in a hostel with kitchen privileges, a guesthouse, or a simple apart-hotel, rather than a furnished apartment. We often find what we need in a few days. We move in. I set up my nightstand and make a cup of coffee, even if it’s instant with an immersion heater, as long as it’s in my own cup. I sit down, savor the coffee, look out the window at my new view, and relish the moment. I’m home.”
That’s Strategy #1: Word-of-mouth.
In addition, I recommend that you consider a parallel Strategy #2: Engaging the help of a rental agent.
In most markets, the landlord pays the fee, and, in some, it’s split between the owner and the renter. I’d argue that, in a place where the person you eventually rent from is responsible for paying the agent’s commission, why not enlist the services of a broker in your search? This may seem to contradict my recommendation to seek out your rental by asking around in the place where you want to rent, but that’s not necessarily so. If it costs you nothing, why not have an agent search along with you? You pursue your word-of-mouth strategy, while the agent does his (or her) thing.
The downside is that, even though you’re not paying it, the agent is still working for a fee, which is typically based on the monthly rental amount. In other words, the agent isn’t going to knock himself out trying to find super-cheap options. He’ll work within your parameters, but he’ll bring you the options that will earn him a greater commission. You can always politely decline interest, of course.
The other advantage to engaging a broker’s help sourcing a rental (in addition to expanding your search basis) is that, in some markets, the agent’s job isn’t over when the rental agreement is signed. Here in Panama, for example, a rental agent is expected to help you orchestrate your move, as well. He’ll negotiate the terms of the rental; he’ll coordinate payment of the security deposit and initial rent (walking you through when, to whom, and how to accomplish this); he’ll help you arrange for the installation of telephone and Internet; and he’ll help you transfer the electricity account into your name (if that’s what you decide to do).
These may sound like small things, but, in a new country, operating in a foreign language, dealing with these issues for the first time, you’d be surprised how complicated they can become and how welcome a little help can be.
Bottom line, to find the real deals in any market, you’re going to have to connect locally. If you’re operating in a market where the language isn’t English, this means you’ll have to read and speak the local language or have a contact on the ground you trust who reads and speaks the local language.
Kathleen Peddicord
Your New Life Overseas Coach