When retirees move to Costa Rica they basically have two choices when it comes to living situations. They can rent or buy. On my monthly relocation retirement tours and when I lecture at conferences I always explain the pros and cons of both situations to help potential residents make the most practical and intelligent choice given their particular situation. Let’s face it. Some people are buyers while others are renters. Either way you will have plenty of housing choices in Costa Rica and areas from which to choose.

Advantages of renting
Short-term cost: In the short and even medium term, renting is obviously much cheaper than building or buying. Those other options require you to have either thousands of dollars in liquid assets, or a down payment and good enough credit to take out a mortgage. To rent, you only need a deposit worth one month’s rent and enough resources to keep up with the payments. With a furnished apartment, neither do you have to invest in furniture or anything else that might tie you down before you’re ready to stay.

Flexibility: With a rental property, you can leave any time, the only possible loss being your deposit, depending on the terms of the rental agreement. This is a real advantage when you consider that, for all it’s stability, Costa Rica is still a developing country, and you are not a citizen. Also, unforeseen things can go wrong on short notice – a death in the family, natural disasters, economic problems, a divorce and even political upheaval. If it does, you may want to leave, and the option to pull up stakes at a moment’s notice can provide quite a bit of peace of mind.

Simplicity: Since you’re not investing a large amount of money, renting is much simpler than buying or building. You find a place, sign a contract, and make monthly payments. There is no due diligence, no lawyers, and no messing around with architects, engineers, and the National Registry.

Disadvantages of renting
Furnishings: Usually poor, or at least in bad taste. This can be fixed somewhat with an unfurnished rental, but not completely if things like window frames and kitchen cabinets are taken into account. If your standards for comfort and interior decorating are adjustable, you should have no problem, but it really is difficult to find a nice rental home for a decent price.

Landlords: You will, of course, have to interact regularly with a landlord, which can be tolerable or hell on earth, depending on the landlord. Language barriers provide another layer of problems.

Ownership: You don’t own the property, which limits your use of it. Drilling holes to hang a picture? Ask the landlord. Want a dog? Ask the landlord. Thinking about painting the walls of the second bedroom your favorite shade of fuchsia? Better ask the landlord.

Most important, no investment potential: All that money you pay on rent is gone, paying someone else’s mortgage. If you stay for the long term (rule of thumb is 100 months), by buying you might even make money, as Costa Rican property has steadily risen in value over the last decade. If you buy a property in a good location and in the “path of progress” you are bound to make money on your property. Also, the better the location and the more desirable the area, the easy it will be to get rid of the property if you have an emergency and have to leave the country. You should always have an exit strategy whether you rent or buy. You never know what is going to happen.

By the sound of the title readers may think that we have a cell of American terrorists in Costa Rica. Well, nothing could be farther from the truth. In fact, we have NO terrorism here. Even during the tragic events that occurred on September 11, 2001, Costa Rica was never in danger. We have had no army for over 60 years nor do we have any enemies. What we do have here is peaceful tropical paradise which makes the country one of the best places in the world for foreigners to live and retire.

So what does the title mean? A couple of weeks ago I wrote an article for my blog titled, “Ugly Americans.” Gringo terrorists refers to the same concept. Don’t get the idea from reading this that I am anti-American nor do I want to scare potential retirees away. Although I have lived more in Latin America than in the U.S., I am proud to have been born in the latter and would never be where I am today if it were not for all of the things that the U.S. gave me. In addition, I find it very gratifying to help my fellow Americans relocate to Costa Rica on my monthly retirement tours and have made many new friends in the process.

For me a gringo terrorist is any American or foreigner who comes here and acts like a jack ass or manipulates people with erroneous information. I consider this to be a form of societal terrorism since it can affect many people. The majority of Americans who live here are good people but we have a few bad apples that give all of us a bad name. Unfortunately, we have our share of gringo flim-flam men, pontificators, obnoxious drunks, whoremongers, pedophiles, druggies, even one serial killer (Wild Bill) and others who make all of us look bad. During the 31 years I have lived in Costa Rica, the country has always attracted some of these unsavory varmints. I love this country so much I became a citizen. It really hurts me to have these types affecting us. Fortunately, most of them eventually self-destruct and/or wear out their welcome really fast.

One group that is seemingly innocuous but actually does a lot of harm are the overnight experts. Internet forums, blogs and websites are fertile ground where these critters lurk. Please don’t misunderstand me! I believe everyone has the right to express their opinion. I don’t purport to know everything about Costa Rica but I see people dolling out information based on their own subjective perception of how things work here. It takes years and a lot of research to acquire knowledge in any field. Without understanding the language, humor, politics, culture, people or what the country is really about a handful of foreigners who are higher up on the gringo food chain give incorrect advice to naïve neophytes in search of information about living or retiring here. What this does is misinform people and can keep them from making the correct decisions.

I don’t want to dwell on all of this but it seems to have become more prevalent as Costa Rica’s popularity increases and more and more baby boomers and others relocate here. It seems like everyday more opportunists want jump onto the bandwagon and cash in on all of this.

The best solution is to always consider the source of any information to which your are exposed, DO your homework and ask the right questions.

Mi granito de arena (two cents worth).

It doesn’t matter what kind of rental a retiree ends up with, it will either be unfurnished or furnished. Unfurnished apartments are completely unfurnished. That means they don’t even include basic appliances like stoves and refrigerators. Furnished apartments, meanwhile, are usually decorated very poorly, with cheap picture frames, and tacky curtains. The furnishings themselves are usually hand-me-downs and castoffs from the landlord’s residence. Surprisingly, this is often the case even in pricey properties in the $500 to $1,000 range. Landlords in Costa Rica typically put the bare minimum of upkeep into their properties as well, so before you settle on a place, you will probably view a parade of gloomy concrete boxes with cracked tiles, pealing paint, ancient kitchen and bathroom fixtures, and faded wooden cabinetry. Newer properties won’t usually have these same problems.

If you’re looking for a house rental, your two basic options are a detached stand-alone houses and houses (or townhouses) in gated communities. The former might be cheaper because your landlord does not have to pay condo fees. The latter will be safer, since the condo fees usually include 24-hour security, and your landlord may not ask you to pay them. There are quite a few gated communities in the Central Valley and the surrounding areas, and more are being built every year. That kind of housing is more difficult to find in rural areas, and in beach areas it’s usually targeted toward tourists, and therefore quite expensive.

Apartment rentals are more abundant in city areas, although you can find them more or less anywhere if you look long enough. Like house rentals, you can get one with or without 24-hour security. Newer apartments come with their own parking spaces in a guarded area, which is something to check on if that’s important to you. Another options available to renters is an apartotel. It functions something like a hotel, but rent for longer periods of time. An apartotel includes a kitchenette and is fully furnished, down to the hand towels. Apartotels are mainly located in urban areas and their rates will be more reasonable (and contracts more long-term) than if you were to simply get a hotel room.

You should know there is a rather distinct difference between rentals for Ticos and rentals for foreigners. Tico houses and apartments have a rather dreary style that includes block construction, small or no windows, tin roofs, and shabby furnishings. That being the case, Tico rentals also come with a lower price, so if you can handle “going local” for a bit, you’ll get to both experience some of the culture and save money. Also, if you have pets, make sure to ask your landlord about them ahead of time.

So, as you can see if you chose to live or retire in Costa Rica, there are several rental options available for foreigners.

Achieving millionaire status is a noteworthy financial goal. But saving $1 million in the United States or Canada doesn’t necessarily mean you are ready to retire or that you will be able to afford a lavish retirement lifestyle. I am originally from California and the cost of living is very high there. Having a net worth of one million dollars does not make you rich anymore.

As one expert says, “Many people should be able to save $1 million for retirement if they start saving early enough. A worker who saves $5,500 per year beginning at age 30, gets a $1,500 401(k) match each year, and earns 7 percent annual returns will have $1,014,640 by age 65. However, someone who waits until age 40 to start saving will have to tuck away closer to $14,000 a year to reach $1 million by age 65, assuming the same 401(k) match and investment returns.What $1 million will generate. We associate the word “millionaire” with luxury. Spread out over a 30-year retirement, $1 million will likely make you comfortable in many parts of the country, but not especially wealthy. It’s not enough that you can put it in the bank and draw half a percent of income and live off it. You have to invest it and you have to take on risk.If you draw down 4 percent of your $1 million nest egg each year, you will receive about $40,000 annually for 30 years, before adjusting for inflation. To that amount you can add any Social Security or pension income you expect to receive. But you will likely need to subtract taxes, especially if most of your savings is in tax-deferred accounts including 401(k)s and IRAs, and account for inflation. Making it last. You may have to adjust your withdrawal strategy in retirement as new expenses arise or cut back on discretionary spending such as travel or entertainment in years when your investments perform poorly. There’s also inflation, which can erode your spending power in retirement. Most people have one major source of inflation-adjusted income: Social Security.”

On the other hand, those of who didn’t contribute to a 401(k) or IRA, will be pleased to know that you don’t haven’t to be a millionaire to retire in Costa Rica. You can have a good lifestyle here and live with dignity if you: rent an affordable apartment; take advantage of the public health care system as a retiree; shop for fruits and vegetables at the weekend farmers markets; pay low utility bills; if you buy a home pay low annual taxes on your property; use public transportation; enjoy hundreds of affordable activities and so much more to stretch your retirement dollars.

I personally know hundreds of retirees here who live very well for under $2000 per month. They could never afford a similar lifestyle in the U.S.

During my monthly relocation/retirement tours and at seminars, where I am a frequent lecturer, I always talk at length about the affordability of living in this wonderful country and the terrific lifestyle one can have for less that up north.

On my monthly award-winning relocation retirement tours, I am asked repeatedly about how difficult it is to move here. I usually start out by saying that it is no more difficult than moving across the United States. The logistics may seem daunting but they really aren’t if you are organized and put yourself in the hands of the right people. Remember thousands of Americans have done it before you and have already blazed the trail. Basically everything is already place to make the move virtually seemless.

The first step is to affiliate with the Association of Residents of Costa Rica (ARCR). Costa Rica is one of the few countries in the world if not the only country to have an organization like the ARCR. They can help you with your paperwork for residency and everything else you need to relocate. It is highly advisable to attend their monthly seminar before you do anything.

Then you have to decide what you want to bring —everything, some things or nothing. If you choose the latter route you will happy to know that you can purchase almost everything you need to set up an apartment or home here without bringing it from the U.S. However, if you do decide to bring all of your belongings form your home country you can hire Charles Zeller’s Company, Ship to Costa Rica. This company will handle everything form A-Z for you including importing a car.

One you get here the ARCR can help you with getting a cell phone, opening a bank account, insurance, health care and almost everything else you may need. When you finally do get settled and know the ropes you will learn how to save money and where to go to stay busy and happy during your retirement years here.

Over the years I have personally helped 1000s of people move here through my book (“The New Golden Door to Retirement and Living in Costa Rica”) and relocation/retirement tours, so I am very familiar with the whole process of moving here. I also have a network of valuable contacts to help those who retire here.