Why I’m Living Abroad to Buy a Home in the U.S.

published Apr 3, 2019
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While I’ve always wanted to buy a house to make into a home, my partner has always looked at real estate as a financial investment, not an emotional one. We both have our reasons: My family lost our home when I was 13, and I love the idea of raising a family and creating memories in a financially-stable house I own. My partner comes from an immigrant family, and he was brought up to see homeownership solely as a means of generating passive income.

The thing we can agree on? That we both love living abroad. We currently live in Mexico, and would like to continue doing so for as long as possible. We have a lower cost of living than we would in the States, and because of this, we’ve been able to pay off a good chunk of our student loans and stash away a good amount of cash. And now, we’ve found a perfect compromise for that money: Buy a house back in the U.S. as an investment property, and use the income it generates to continue traveling and living abroad.

We’re not the first people to deal with the U.S.’s high cost of living, rising real estate prices, and student loan debt by living abroad for a couple of years. Like me and my partner, we’ve met many fellow expats who also moved abroad to save money. And they’re finding, too, that after growing accustomed to the international lifestyle, they want to continue living and traveling abroad and have decided to buy an investment property back in the States to do so.

In order to better understand what my partner and I are getting into, I talked to a few ex-pats (and a real estate professional!) with investment properties to understand the benefits (and inevitable hiccups of the process) better. Here’s what they said:

Think affordably and long-term

Our former dog-sitter, Casey Jasper, owns a formerly foreclosed home in midtown Sacramento. She bought it with cash in 2008 at the bottom of the market. She now makes $2,400 every month off the property, and uses the money to travel the world, which she’s done consistently for two years.

“As long as the house is rented, I can go to affordable countries,” Jasper says.

Another fellow expat, Nicole Scala, used the more affordable cost of living abroad to pay off mortgages back home. She bought a home in Florida, but then moved to South Korea to work as an English teacher. Her new job paid well and included housing, allowing her to double up on her Florida mortgage payments. Eventually, she moved back to the States with enough in savings to live on if she couldn’t immediately find a job.

Scala found that having an investment property also opened up her opportunities once she returned to the U.S. “I had the choice of paying off my house or buying a new one,” she says. “I decided, since the first house had tenants, that I would use my savings for a down payment on [a] new house, which is being built now.”

Know that the financing process will be a lot harder

But it’s not always an easy process for expat homebuyers. Jessica Panicola worked as a teacher abroad for four years, saving up $80,000—more than enough money to pay for a down payment on a house. When she decided to move back to New York City for grad school, she wanted to own instead of rent. Unfortunately, buying an apartment was a lot harder than she anticipated—she wasn’t approved for a mortgage.

“I had to be approved to purchase an apartment, and in order to do that, I needed a steady income,” she says. “Since I wasn’t currently employed, there would have been no way I would have been able to get approved.”

Scala, too, found there were unexpected hurdles when she went to build her second home. “I didn’t have W2s, so I had to use my tax returns to apply for a mortgage,” she says. “Some lenders didn’t want to work with me since I didn’t have a U.S. address for the past two years.”

Many times, the red tape expats face when buying in the U.S. can be avoided with preparation, says Ashley Nearby, a Realtor with Keller Williams in Charlotte, North Carolina:

“When it is time to move back, one consideration is to be sure to thoroughly discuss your employment while obtaining the pre-approval with the lender,” she says. “In addition to knowing which employment and income verification is needed, be transparent about your situation. Show when employment will start or continue, and know whether or not the place will be a primary residence.”

My partner and I have run into similar issues when trying to get a mortgage from Mexico. But, we are determined to keep trying. I asked some advice from Melissa Wilbur, a woman who had to sell her home from abroad when her husband was deployed. This is what she told us: “Don’t take no for an answer. There’s a way around everything. You just have to find it.”

Unfortunately, this route can end up being very expensive, so it’s important to work with a real estate agent and a mortgage lender who are familiar with your situation before you start searching to keep your costs as low as possible.

Stay organized

If you want to use the home as an investment property as opposed to a primary residence, you need to be transparent about that as well. Also plan on coming home for some time before turning it into a rental property. Being honest with your lender can help make the process run more smoothly.

“Stay ahead of contract deadlines and consider well in advance the need for getting a notary at your local embassy, as well as the time it would take to mail any documents that require an original signature,” Nearby says.

Would you live abroad to afford a home back in the U.S.?

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