Do you want to move to France or Italy when you retire? The price of a house in France or Italy can be a bargain, but follow these 3 steps before moving abroad.
Tommy Sikes began to think about the next chapter of his life for him and his wife, which is the possibility of spending at least part of his retirement years in Europe. What started as a fun project for American Tommy Sikes has turned into an important part of his life and business.
“We love Italy and France, and we started thinking, ‘What’s the next step?'” he told CNBC. “How can we make this dream a reality?” Sikes continued.
It all started from a dream
Sikes began looking for properties across the Atlantic, focusing on inexpensive locations away from big cities where he and his wife could pursue outdoor hobbies like hiking and kayaking.
When he started researching available properties, Sikes, a certified financial planner, found a new base of potential clients who were excited about the prospect of owning property overseas but didn’t know how to go about it.
He now has around 25,000 followers and subscribers on X, YouTube and through a weekly newsletter informs interested parties of available properties.
He understands the appeal of the lifestyle people want when they retire.
There are homes starting at $50,000, which is what a new truck costs in America
“I started discovering these incredible properties that were for sale in smaller towns and villages for prices starting at $50,000 and going up to $100,000. And I was shocked, because that’s the price of a new truck here in the United States,” he says.
Still, Sikes is careful to caution subscribers and clients against buying such a property on a whim, even if they think they can afford it.
“There seems to be a gap in this kind of planning — especially for Americans who need to do some financial planning ahead of time to make sure it’s feasible,” he explains.
Here are three steps Sikes says those looking to buy property overseas should take before they retire.
Take a financial inventory
Sikes works with a lot of clients who, like him, are thinking about what retirement might look like in other realms. For them, living abroad may be more financially attractive.
“I could do a simple financial plan for someone in the US and run the same plan for a place in France, and the cost of living is literally 50 percent less,” he says. “That means for the same assets and planned income, you could improve your lifestyle or retire a few years earlier,” says Sikes.
Before starting a dream life somewhere in the Mediterranean, you’ll need to take stock of your finances, says Sikes.
“You will need an inventory of your assets and income. What will social security be and how much will the pension be? Can you maximize your retirement income investments? These are the kind of traditional things,” he says.
“France and Italy have tax treaties with the US, so you avoid double taxation,” says Sikes.
Prepare for the home buying process
The good news for those looking to get one of the properties Sikes finds is that there are no restrictions.
“There are no restrictions on Americans buying property in Italy or France,” says Sikes. “You don’t have to be a citizen of that country. You don’t even have to be a resident. You can buy something remotely,” he explains.
But, he adds, you’ll need to be willing to put enough money away by retirement to pay cash.
In France and Italy, for example, mortgages for US citizens are rare unless they have lived in the country and established a relationship with a local lender.
And even if you’re willing to make a cash offer, don’t expect a simple process. “People have to temper their expectations. Often, you have to call the seller or agent. I’ve had people tell me they had to email the agent five times in three weeks and never got a response,” he reveals.
Then, he advises, start taking French or Italian lessons.
“Not just 10 minutes a day in an app on your phone. Start listening to music and news in French or Italian,” advises Sikes.
Take a “test drive” before retirement
Even if you think you’ve found your dream home on the French Riviera, life there can look very different from what you imagine.
“People will fall in love with a property, not realizing it’s in a town with one restaurant and no bars and you have to have a car because there’s no public transport and you have to drive an hour to get there to a decent hospital,” says Sikes. “Always, but always, the place is more important than the property itself.”
Therefore, wherever you are considering buying a property, it would be wise to rent it out for a while first.
If you find a place you’d like to live, Sikes suggests hiring someone there first, whom you empower to do certain things, so you don’t have to spend thousands of dollars flying from one end to the other. another part of the world to meet real estate agents. That person can be very helpful, he advises.
