Photo: By Arturo Avila on flickr
No matter where in the world you decide to relaunch your life, I recommend that you rent first, rather than buying a new home of your own. Renting for at least six to twelve months keeps you mobile and flexible. It allows you to try a place on for size before committing to home ownership. And it saves you the carrying costs of being a homeowner.
Renting a home or apartment overseas comes with important advantages. However, renting a place to live is not as straightforward a process everywhere in the world as it is in the United States.
Make sure the lease establishes clearly what is included in your rent and what is not, such as building or homeowners' association fees, water, utilities, phone, and Internet services.
If you're liable for utilities, find out the previous renter's average costs.
Sometimes these can be a shock. We've just moved into new office space in Panama City that is the same number of square meters as our house, yet the monthly electric bill for our office has been three times as much as that for the house thanks to the cathedral ceiling in the great room.
Also understand who's responsible for setting up the utilities.
Will they remain in the landlord's name or will they be switched to your name? There are pluses and minuses either way. For example, what is your liability if the electric bill is transferred into your name?
Maybe you deposit the rent directly into the owner's bank account. Maybe you pay a rental manager. Maybe you have to hand-deliver the check to your landlord.
In Europe, rent is often paid by direct debit from your local bank account. Building and homeowners' association fees are often paid to a different person or organisation and by a separate check, not as part of the rent.
What protection do you have against the owner selling the apartment and giving you limited notice that you have to move out?
The lease should include a compensation allowance in case the place is sold while you're renting.
In some markets such as France, you're going to have to prepare a complete dossier of paperwork including recent bank statements, pay stubs, reference letters, and even sometimes letters of guaranty to submit for approval before you'll be able to sign a lease.
In Panama, you generally don't need any documentation to rent. You find a place, sign a lease, pay your deposit, and move in.
In some countries, renters can be responsible for structural repairs including cracks in the façade or a leaky roof.
Document any existing damage and the current condition of used fixtures or appliances.
The date you begin to pay rent doesn't always coincide with the date you take up occupancy.
In Panama City the market was so competitive at the time that we paid rent for two weeks in advance of our moving in.
Understand what deposit you will be required to make. The general rule is that you'll have to pay the first month's rent plus a deposit equal to one to two month's rent.
And, whatever the deposit, don't expect to see it again.
People in Paris joke that the best way to think about any security deposit you make is to amortize it over the lifetime of your rental. In other words, consider it part of the rent.
In Panama, your deposit should be posted with MIVI, Panama's department of housing. MIVI holds the funds and then releases them at the end of the rental term. If something is to be deducted for damages, the landlord informs MIVI and the renter is given a chance to sign off on the amount to be withheld for repairs.
Unfortunately, not all landlords do this, which means your deposit could be at risk. One of our landlords returned our deposit in full within a couple of weeks of our moving out, while another property manager refused to return our deposit citing unspecified damages and kept the full amount.
You should use an attorney when signing a rental agreement in another country.
Unless you are very familiar with tenants' rights and the particulars of rental contracts in the country where you're renting, it pays to have an expert review the documents before you sign.
A good attorney will also inform you of any negotiable clauses, so that you have an opportunity to adjust the terms of the agreement to your benefit.
Outside the main cities in countries like Panama and Nicaragua, the protocol for renting a house might be a handshake, rather than a written agreement.
This shouldn't necessarily make you nervous.