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Not doing it now, but looking to do sort of the same thing, only sticking with Baja and/or Puerto Vallarta area (since I'm on the West coast). Lots of people do this sort of thing!
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by MrRational
I'd say to stick with that... at least for one of the two homes.
I'd say own ONLY if the property taxes and overall expenses are low.
And calculate the best location as primary for income taxes too.
If your USA mainland home is in a state with income tax, AND you have a tax burden, you should probably spend a few more days / yr in your Island Paradise (183+ days). Some of my friends with internet businesses appreciate a TAX FREE domicile in a US protectorate Island Paradise
Check the regs of your 'other' state (Don't trigger domicile in a 'greedy' state!)
For our 'absentee places'... we keep a 'tenant' and use rural properties with separate living qtrs. (cabin, apartment in garage or shop, extra home, RV spot). The tenant feeds the farm dog, cats, livestock, mows, water the plants, collects mail and keeps an eye on things. We rent for slightly under market, and ONLY to referrals / people we know / usually adult singles over age 40. We get referrals from neighbors and local churches and seminaries (Adult students).
As we age / need less space, we rent out the main house for great positive cash flow and live in the cabin.
all our 'Stuff' has a place in the home / apartment / shop or barn (Each place has all of the above).
We keep a CHEAP <$100 car at each location, and homes are close to airports in desirable destination areas.
The extra living space will be for: Renters, boomerang kids, needy relatives, future caregivers, LT guests or US!. The extra income pays expenses and helps support our habit (being gone!) 280 days / yr of drizzle at our domicile. In the last 4 yrs... maybe 120 days / yr at main house (summers are wonderful). Eventually we will stay put. When I need care... I have my LT reservations / request @ WY Pioneer Home (site of hot springs State Park). Bring extra swimwear cuz I'm wearing mine out on the waterslide!
We've been all over the Caribbean - sometimes land trips, often on cruises, so lots of the islands. Our favorite area is the Caribbean side of Mexico - Isla Mujeres, Tulum, Akumal, etc. But we'd like to visit other areas too.
Does anyone know which of these states is most favorable to retirees as far as taxes, etc...
PA
NJ
DE
(I am pretty sure we can scratch NJ off the list due to property taxes).
We live in NJ now but would like to stay in the general area when we retire so we can stay connected with friends and family the 6 months of the year we are here.
Relatively speaking, So. Jersey property taxes are lower by quite a bit relative to No. Jersey. A friend on LBI pays around 1%, which for NJ is quite attractive.
Well, OP, it all sounds great on paper and I say go for it. But, I will share some of the problems we are having with 2 homes, just to warn you. Of course, everybody's situation will be different, depending on locale.
We retired to Ecuador with a condo we own. That's not the problem (I know you plan to rent, sounds wise). The problem is the other home in the States that is not selling. It sits vacant as it is not practical to rent. Even if it was, our little rural town forbids short-term rentals so we'd be out of that lucrative scenario you described. And the nearest town with services is 1/2 away so no one is interested in managing it, or doing maintenance on it. Everyone is retired around us. But it is very low COL. Who would look after your U.S. place while you're in the Caribbean? Who would handle the rental? We had a beach condo in TX that also forbade short-term rentals.
Read the other threads about being landlords. Especially overseas.
The other issue is mail. My sister in the U.S. is handling ours, but it is a burden for her. Even though we got everything online that we could, there is still a surprising amount of snail-mail that has to be dealt with. I had a hip replacement before we left, and a year later co-pays are still dribbling in. Some can be paid online, some not. My sister has to open these, scan them and email them to me. Its time-consuming for her. There are 3rd parties that do this, but its like $3 a page to scan, plus the monthly fee. Then how do you switch the mail over when you come back?
My sister is our official U.S. address but that is problematic for things like SS, which want to know where you actually LIVE. We don't get mail here in Ecuador, its just not reliable. Getting new credit cards can be a hassle. If you need to pay by check, how do you do that? Like to a maintenance guy?
We couldn't have our property in the U.S. as our address, as there is no one there to pick up the mail.
Then if you are not a resident of the foreign country, often there are restrictions as to how long you can stay there. Here, it is a 3-month travel visa. Here, even as residents, we can only be out of the country for 6 months in a 2-year period. Not every year.
We are looking into doing what you plan, since our U.S. place isn't selling. May as well enjoy both places.
But it's really hard to figure out the logistics, as you mentioned.
Not trying to be negative at all. Lots here have made this scenario work. I just wish I'd known all the pitfalls to be better prepared, even though I thought I was. Just a heads-up...
Sorry to be so long. Having said all that---go for it. Just beware, the devil's in the details.
In areas in Mexico with sufficient numbers of expats, there are US mail forwarders who bring your mail down to you. We have used these services in both San Miguel de Allende and Lake Chapala since 2007. They give you a TX mailing address and transport the mail to MX twice a week, where you pick it up at their local office (in a box similar to a USPS box). This service costs $20 to $25 a month and you only pay for the months you are in-country. We get our credit card renewals, magazines...never had an item lost.
As far as residency in MX, you can get a tourist visa (included with your airline fare or about $30 USD if you cross by land) that is good for 180 days (appx. 6 months). There is no limit on how many tourist visas you can get in a year...you get one every time you fly or cross at land.
OR, you can apply at a MXN consulate in the US for either a Residente Temporal or a Residente Permanente that allows you to stay year-round. You have to qualify by income or assets or owning a home in MX. We just got our Residente Permanente, which NEVER has to be renewed. It is basically the same as a US green card. A Residente Permanente or a Residente Temporal does not require you to stay in MX any number of days a year; you may leave as often and for as long as you like. If by your income you only qualify for Residente Temporal (lower thresholds), you can renew it for 4 years and then it becomes a Residente Permanente without having to meet those higher income/asset thresholds.
As far as paying bills, we use free billpay with our US banks. Most are auto pay, like monthly utilities at US home, credit cards, etc. If I get a bill while in MX for an unexpected bill, I send a check via billpay...it's as same as writing a check, but the bank does it for you, including paying the postage to the recipient!
Re: need US address for SS. Huh?? SS will send payments to foreign banks, including MX banks. And they will accept a non-US mailing address or a PO box or a relative's address for that matter for mailing address (yes, they want to know where you physically live, but that has NO effect on your benefits or where you receive them). US consulates in foreign countries have at least one employee who will assist expats with SS issues. The consulate in Guadalajara is excellent in helping people with SS queries.
Last edited by dothetwist; 03-16-2017 at 06:31 AM..
Thanks for all the insights, thoughts, tips and warnings. It is much appreciated. Yes, there are so many logistics and details to think through. I am glad we have lots of time to figure it all out.
As for where to own in the US, well....we would prefer to stay in the northeast in the general area that we live, since this is where our friends and family are. Culturally, the south would not fit us (although I do realize it's cheaper), nor would rural areas. We are Philadelphia suburbanites and have been our whole lives and we are comfortable (and prefer) living near (or maybe even in) a large city. I know from past research (when we were considering moving from NJ to PA at one time) that there are some towns in the Phila Suburbs that have low property taxes. We would probably concentrate our focus there. I just have to learn more about the other taxes, like income tax, etc., to see how we could get the best situation financially and still be near our friends and family. I would also be sure to investigate the permissibility of renting our home to long-term renters and would avoid purchasing any property that would not allow this. It's possible we might not HAVE to rent our place out, but it would be nice to have that option if funds were too tight.
In areas in Mexico with sufficient numbers of expats, there are US mail forwarders who bring your mail down to you. We have used these services in both San Miguel de Allende and Lake Chapala since 2007. They give you a TX mailing address and transport the mail to MX twice a week, where you pick it up at their local office (in a box similar to a USPS box). This service costs $20 to $25 a month and you only pay for the months you are in-country. We get our credit card renewals, magazines...never had an item lost.
As far as residency in MX, you can get a tourist visa (included with your airline fare or about $30 USD if you cross by land) that is good for 180 days (appx. 6 months). There is no limit on how many tourist visas you can get in a year...you get one every time you fly or cross at land.
OR, you can apply at a MXN consulate in the US for either a Residente Temporal or a Residente Permanente that allows you to stay year-round. You have to qualify by income or assets or owning a home in MX. We just got our Residente Permanente, which NEVER has to be renewed. It is basically the same as a US green card. A Residente Permanente or a Residente Temporal does not require you to stay in MX any number of days a year; you may leave as often and for as long as you like. If by your income you only qualify for Residente Temporal (lower thresholds), you can renew it for 4 years and then it becomes a Residente Permanente without having to meet those higher income/asset thresholds.
As far as paying bills, we use free billpay with our US banks. Most are auto pay, like monthly utilities at US home, credit cards, etc. If I get a bill while in MX for an unexpected bill, I send a check via billpay...it's as same as writing a check, but the bank does it for you, including paying the postage to the recipient!
Re: need US address for SS. Huh?? SS will send payments to foreign banks, including MX banks. And they will accept a non-US mailing address or a PO box or a relative's address for that matter for mailing address (yes, they want to know where you physically live, but that has NO effect on your benefits or where you receive them). US consulates in foreign countries have at least one employee who will assist expats with SS issues. The consulate in Guadalajara is excellent in helping people with SS queries.
In light of all this, Mexico sounds like the better choice. We don't have these mail delivery services, and the tourist visas are much stricter.
I didn't know about sending a check via billpay. Does that work sending to an individual too? Someone who does not do things online?
I'm glad you had a smooth experience with the SS people. We did not. They gave us a hard time about addresses. Said their communications had to be sent to where one lives. That would be nice if that is not the case....
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