For Millennials – The Disappointing but Good News

This article was published in the Escape Artist Weekly Newsletter on September 04, 2018. If you would like to subscribe to the newsletter, please click here.

Dear Millennials,

A few years ago, I learned the disappointing news from a friend who was featured on House Hunters International that the show was staged. Not only did he know what house he was going to call home after the show, but he was already living in it, AND the furniture featured on the show in the house was his.

I’ve heard similar accounts from other buyers on the show, although nothing as heartbreaking as the above. Regardless, I continue to watch the show for hours on end from my turquoise futon in Belize, “ooh-ing” and “ahh-ing” when incredible, out-of-my-budget home features are pointed out.

For me, I consider it an update on the real estate market overseas, an industry that I truly enjoy following. Spending significant time in the real estate market in Latin America and seeing the markets that are growing and transforming around the globe is extremely exciting.     

For many of my millennial friends who also watch the show, international real estate may not necessarily be their passion, but they do dream about owning their own beachfront bungalow in the Caribbean one day. Or perhaps living off the beaten path in a secluded, out-of-this-world treehouse in the rainforests of New Zealand.

For Millennials – The Disappointing but Good NewsImagine looking out on these beautiful waters when you need a little R&R!

Although my friends have also recognized that the show is premeditated, for that hour, they are in another country exploring property that one day might be theirs.

But today, “one day” is their standard answer when they dream about hopping on a plane and spending time abroad. And it is also the standard answer when I invite them to be my neighbor on Ambergris Caye.

For Millennials – The Disappointing but Good NewsAmbergris Caye mornings, sunrise right over the horizon.

Many people default to “one day” because of life circumstances. It is very difficult to say sayonara to what you have going on at home, yet it is easy to watch shows like House Hunters International and imagine.

Imagine you could own your own getaway on a Caribbean island that you and your family would vacation to down the line. Would you start putting money aside now?

Imagine you could rent out your Caribbean real estate when you’re not enjoying it. Would you benefit from the extra cash?

Imagine you could own your own timber farmland now and start building your legacy for generational wealth stewardship. Would you take the first steps now?  

If you could budget for these exciting opportunities now, would you?

As millennials, many of us are on the same boat – conquering student debt, navigating through new relationships and young families, paying down mortgages, etc. I am not telling you it is easy, but you can start taking the right steps forward to make your dreams more attainable. Below, you’ll find a couple of suggestions to get started on your next steps that my forward-thinking friends at home and I have discussed. I hope you find them useful.

For Millennials – The Disappointing but Good NewsA few real estate investment friends with Tom Hopkins, real estate & sales expert, enjoying great dinnertime conversation.

First, let’s debunk a few global real estate myths to help set expectations right from the get-go:

  1. Conventional financing of 20%, 80% financed at rates of 4-5% is NOT the norm overseas for foreign buyers. Some developers or sellers offer financing, but do not expect the great rates you get at home. For more information, take a look at these options for financing overseas. 
  2. Set your return-on-investment expectations low. So many people purchase real estate overseas with this unrealistic expectation that they are going to earn 15, 20, or 25% from their rental property. That mentality can be dangerous and disappointing if you do not reach those high numbers. Go into international real estate ownership with the understanding that you are killing 2 birds with 1 stone through ownership of property abroad. The first is that you are accomplishing jurisdictional diversification, and the second is portfolio diversification. Always remember, if the promises sound too good to be true, they probably are.
  3. There is NO MLS system, which means Zillow.com and Realtor.com will not work if you are looking outside of the United States. So, what do you do? Start with reputable global resources like Escape Artist, well-known real estate brokerages, and global developers who have been around for a while. Of course, identifying other expats or buyers abroad is a great option. How do you find those people though? Refer to number 3 below.

How to get started:

  1. Personally, I recommend you read the life-changing book “Rich Dad Poor Dad” by Robert Kiyosaki. It is one of the most popular reads for folks new to real estate investing. Kiyosaki truly puts into perspective why it makes sense for you to consider ownership of property.
    For Millennials – The Disappointing but Good News
    Rachel Jensen and Robert Kiyosaki on a Real Estate Cruise Conference.
  2. Budget and set goals. If you’re just starting out, ask yourself what you can do now that will produce an income for you down the line. Wouldn’t it be nice to be nearing retirement and have your retirement funding plan already figured out? I read a crazy statistic the other day on the MotleyFool.com that 42% of baby boomers and 41% of Gen-Xers have $0 (ZERO DOLLARS!) set away for retirement. That’s scary.
    Understand how much you are spending each month in set expenses and how much you have left to play with. Creating an “investing bucket” may take time, but don’t let that discourage you. At least you are thinking about and strategically planning the next steps. Not sure how to start budgeting? Try using Mint.  
  3. Stay up-to-date with live webinars and conferences hosted by Escape Artist. Dan Wilhelm recently invited me to Escape Artist’s 2-day live event in Dallas on December 1 and 2. He mentioned that we already have an incredible number of internationally-minded folks attending, and it would be great to meet our fellow readers in person. What’s better than connecting with people who have done what you are trying to accomplish? Reach out to Dan directly if you’d like to learn more about the event. And encourage your friends to join you. The best investment you can make is into your future.  

Consumer Resource Guide

By the way, if you have not heard of House Hunters International before, it is a show on HGTV about people who are looking at buying real estate overseas. Sometimes these buyers are looking for a primary residence due to a lifestyle change, while others are simply looking for a vacation rental property or second home. On the show, the real estate agent takes the buyers to look at 3 final places based on their budget and “must-haves.” The buyers then make their decision and end up living happily ever after in their new digs.

I invite you to take a look at this clip from a few years ago when my friend Kent and his wife Denise were going through the home buying process in Nicaragua.  

Enjoy your youth and remember to give your dreams a chance. Hope to see you in Dallas in a few months.

This article was published in the Escape Artist Weekly Newsletter on September 04, 2018. If you would like to subscribe to the newsletter, please click here.