The Hard Facts
Face it, those of us considering transplanting ourselves to an entirely different country do so for very intense (socio-economic & political) personal reasons. Personally, Iím a bit conservative and favor libertarian thinking. But the fact is that the western world is in rough shape, both morally and financially. Why sugarcoat the fact that if the United States & Europe were corporations they would both have been declared bankrupt several years ago. Are they ready to become the next two banana republics? Maybe, maybe not.
It depends on what economic models youíve studied on your own. Iíve learned over the years that itís a waste of time trying to convert Keynesian taught and trained friends, that the economy isnít going to get better soon. Besides, most people donít even realize that our government taught them from this perspective without question and thatís all they know.
The Statists plan to stay the course. They plan to get us out of debt by spending more money. The problem is that we need more savings, more investing and a productive capacity to overcome these problems. The economic ship is sinking and itís only a matter of time. Plus the fact that just worrying about saying anything benignly critical of where Iím from is getting more uncomfortable by the day. Not good!
Seven years ago we saw the writing on the wall. More regulation, more taxation and more big brother to come. Meaning less of all the things we cherish including liberty and freedom. ďKnow your place, shut your faceĒ appears to be the new mantra. So we set out to discover the best place to relocate to using a sophisticated set of parameters and a heck of a lot of research. After seriously considering several other countries visited, we fell in love with Chile. Especially the area referred to as the Lakes District.
ďBut, why Chile?Ē, you ask. First we need to back up to 1990 and make a long story short. Essentially, Jeanette had traveled to more than 15 countries, living for extended periods in several, for her work in international manufacturing and later business for a trading company. Ironically, compared to a lot of people, thatís just a drop in the bucket. But she wasnít on a whirl-wind vacation in Europe, where passing through several countries in a few days is an easy matter.
Living elsewhere for extended periods gives people a chance to really get to know your host country and what life is like outside of your own as well. If youíve ďbeen thereĒ Iím sure youíre nodding at this point. It also gives you some interesting insights into your own culture and customs. She spent almost 3 years in China/Taiwan, living with the people, learning their mind-set and speaking their language. She learned that not everything US-centric is best and that living in another country, besides having its challenging moments, can be interesting, fun and rewarding!
Yes, it was during the boom of the housing market in 2003. Everyone said it would never stop, but we knew the ending would be ugly. So we set about looking for our new home. Someplace where our money would go further. Where the climate is temperate, having an abundance of water, and a low population density. Somewhere with a stable economy, and a political system low on corruption and designs on empire building. Some place more self-sufficient that still believes in family values, and the people still answer to a higher power. Some place where you can wake up every morning to a beautiful landscape and feel a renewed sense of spirit and thankfulness for your life and what you have achieved. For us that place turned out to be The Republic of Chile.
Donít get me wrong I didnít uncover the elusive Shangri-la and it isnít a utopian society. Anywhere you go there are tradeoffs of course, especially for those of us used to having just about every want imaginable available in the United States. Moving out of your own country, and relocating thousands of miles away, isnít for everyone. Each person should do some soul searching before considering this path. But for those of us looking for character and courteousness as traits of virtue, youíll be pleasantly surprised to find them still here in Chile.
The Republic of Chile
Iíve heard Chile described as what Europe was like 50 years ago. For me that idea holds a certain amount of attraction, not being a big fan of todayís ďeasy-gimmeĒ society. Here is a country of proud, provincial, people with family, class and solidarity as its core values. The people are mostly Catholic, reserved, and deferential to distinctions of age, gender and status. Unlike the rest of Latin America, the police here are virtually incorruptible. Donít even think about trying to bribe one; honor is still a virtue in some circles in the world, believe it or not. Here exists a very legalistic society, where property rights are enshrined in the constitution and there is a plethora of notaries available to legalize any possible contract you might enter into.
The economy is continually growing (compared to some neighboring countries). Yes historically it has had its ups and downs. I wonít kid you about the fact that mid-century they went through multiple styles of governance. Some ending badly, which is still a hotly debated issue in-country. But with the advent of the ďChicago-BoysĒ, the self-regulating market and democratic principals are very firmly rooted now and here to stay. Because, besides being a country low on corruption, it is high on free-market principals. Here the politicians actively strive to keep the national debt down, and donít run the country on deficit spending.
It helps that the earth is fertile with ancient volcanic soil & blessed by a mild Mediterranean/Pacific-northwest type of climate in the country. The outcome of this is a land that bears high quality fruit & vegetables, yields enough to feed its own people and offers major food exports to the world. The Mediterranean climate in the Central Valley makes it perfect for vineyard harvests. Thus, Chile has recently made its way onto the world stage as an award winning wine producer. The land is rich with timber, blessed by fertile soils and boasts 3,000 miles of wondrous Pacific coastline, and many stunning mountains and lakes adorn the interior. And here in South America, as I said before, the economy works.
All this puts Chile in the top 10 countries list for economic freedom determined by the Heritage Foundation (see home page). The mainstay of taxation for the government comes in the form of a 19% value added tax. While many costs will still be considered reasonable to the average American, compared to other Latin American countries they will feel high. Donít forget that in places like Honduras the per-day wage is less than the cost of a McDonaldís value meal. Hey, Iím just giving you the truth here… But I would prefer to pay a little more for things and live in a better country. Sorry, nothing personal against Honduras per se.
But on now to the main topic of interest…real estate. As with the best real estate in any country, itís all about location. Cities always cost more & resort towns prices can be up there. The further away you are from ďcivilizationĒ the better deals you can get on homes & raw land. But bringing in electrical services and infrastructure can add up quickly unless you are sharing the expenses with neighbors or they are already installed. Generally speaking, larger plots of land are at a base line of several thousand dollars per acre. That means in the countryside, away from the beach or lakeside, without the amenities offered by a development. House building with a decent builder will be around $75 per square foot and up. Of course you can find deals, but this is just to give you a general idea of what to expect. A couple could reasonably expect to live on $300 (in the country) a month for groceries, depending on your needs and how you live.
Is Chile perfect, a utopia among countries? No of course not. Donít forget that every place has its own set of social & economic problems. That could be the entire chapter in a book on Chile. But, realistically itís best to understand why you want to move and what youíre getting yourself into. Are you really the kind of person who could make so many changes in your life-style and not whither? Many studies have shown that people often purchase land on impulse. Especially, those from North America whoíve had a lifetime of easy credit available. Iíve read that in Florida (for example) that in some areas 50% of retirees (from the cold North) sell and return home within 2 to 3 years. The reason being that they get sun-kissed on vacation with the thought of a life of balmy winters and rush out to buy property. And then theyíre amazed at how hot their new home is in the summer?! It happens…
Fortunately the climate in much of Chile is moderate and with out those types of temperature highs. Though there are extremes in both the far North (desert) and South (glaciers), but most parts enjoy a wonderfully non-extreme seasonal change. Trust me, I understand extreme since weíre from New England and you just wouldnít believe the pile-up of winter snow or the wretched August sun. Instead, perhaps consider Chile as either a part time residence or your ultimate bolthole.
What Do I Need To Buy Here?
Just make sure that you have the means to pay at least half and in many cases all of the purchase price before you come shopping. Banks here donít hand out easy credit or lend to foreign tourists. If you want to retire or invest in land you need to have the means not just the interest to do so. Some landowners with larger plots or building developers will often offer financing to prospective buyers, but you must be financially qualified. You can buy property and there is no need to move here.
But for those that do want to move here, Chile offers an option to get permanent residency once you purchase land, but then you will need to meet certain criteria to qualify. I could go on at length here but to save space and not put my neck out in a legal sense Iíll generalize. The government doesnít set up a specific published criteria of who will qualify. Basically it is decided on a case-by-case basis. If you have the means to buy a property and care for yourself that is part of the qualifier. You must be a person of good character, who demonstrates a verifiable pension, savings or income stream.
Those who see themselves in that category should have no problems with the application process to come and live permanently in Chile. Sorry, but immigrating to another country isnít quite the same as moving from Boston to Honolulu. A fine young couple with education, skills, and high aspirations, but little savings or demonstrable means of supporting themselves for the long haul will not pass muster. I have nothing against financially struggling youth, I was one once myself. I suggest that some people looking at Chile for relocation but without the adequate means will need to consider alternate countries with either a lottery or easier to meet requirements. For those, I suggest perhaps New Zealand. NZ is seeking young talented, educated persons to help build their economy. Sorry, I didnít say everything would be easy.
The Ongoing Economic Downturn
Now since the 2008 down turn, you canít expect to come here and depend on finding an endless stream of English teaching positions (like are so prevalent in Asia) or open up a store offering a service thatís not truly in demand. You need to come here with a solid business plan and money in the wings, or a lot less money but a dependable retirement pension from either a corporation or government. There arenít readily available jobs out in the countryside for Gringos either. In the city there are more choices as such but you need to have some specialty skills and excellent Spanish ability before you would be considered.
Of course, for those financially blessed many doors are open always. If you have the bucks think about investing in a resort, hotel, eco-development or perhaps even a fish farm. Want to get away from it all, you can buy a whole Mountain top or how about your own island, and why not? When the Europeans (especially Spanish, Italians and Germans) finally figure out that Euro-land is headed for ultimate financial chaos what will happen? Personally I think many may come to Chile and start competing for acreage and developments that are available here. Just think about it.
People will be looking for hard assets as fiat money instruments begin to fail. The Spanish have history and the same language as South America. The Germans colonized some areas of Southern Chile and there are still pockets of them. They have their own restaurants, schools and businesses here, still distinct in aspects of their culture. Many Italians emigrated away from Mussolini into Argentina during the World War and their language is not so dissimilar to Spanish really. Not if you speak Chinese anyway.
As recent as May 2010 in Great Britain, wealthy Greeks fleeing the financial chaos in their own country drove the luxury real estate market in London out of recession. In their panic to get their money out of Greece, they bought up luxury flats in the city of London as a safe haven play ( article
). Tell me you know for sure that could never happen here. I doubt you can. And I think it might, and Iím not afraid to go out on a limb to say so. But weíll see, itíll take some time…
What If Iím Not Rich?
But even if you arenít rich, you can still swing it. If you are the average middle-class person, but you have some resources you can still relocate here. This is what I suggest you consider. You can do it, but you have to have at least 50% of the purchase price of the condo, home or land you are interested in to put down.
If you plan to move to Chile do you have an income stream, savings or solid investments that can cover the other portion of your payment and still allow you to live and support yourself and your family? (People who do not plan to home school will have to be close enough to a city where there are private schools available, Chilean public schools, though adequate for some, are not really to the level of what many expat families will desire.)
Although we are not a relocation company, I understand that most people will need some advice and assistance with their moving plans. If you buy a property through our firm we will obviously assist you with every step of the purchase process. But we will also endeavor to give you some basic assistance and advice on how to plan your more here. If your move is more complicated than most, there are relocation specialists in the City at a price. We can help you with general information as part of our service of buying a property through us.
We donít want you to cancel your plans to buy when you realize at the last moment that it is cost prohibitive to bring your own vehicles along. Itís best to make an informed decision. Our suggestion for you, if you may be interested in Chile as a property investment or place to relocate to, is to come here for a visit. If you are already a serious & informed buyer we will spend time showing you properties in your target areas. If you want to come here on a discovery trip only, we can still help you.
Take A Discovery Trip
(not available until
For a touring fee, we will show you around for a few days, take you to see some towns that match your interests and properties in your price range. We can show you around, introduce you to some builders, take you to the stores and help you to get a feel for what life would be like in Chile. Sure it will cost you a few bucks but thatís nothing compared to the large sum of money put down on a house in an impulse purchase and then a change of heart.
If you decide it works for you and you buy a property during your trip then we can negotiate your commission to reflect a discount towards the cost of our hours invested on your behalf. If you donít purchase a property, then you just bought over a years worth of internet research for the price of a few short days touring in a beautiful country. That would be money well spent in my mind. That was my experience when I went to Panama. In several days I learned and experienced what took me 4 straight months of research to unearth, only to find out it looked better on paper than it did in person.
But I Donít Speak Spanish
Worried that you canít live here without knowing Spanish? Itís possible; you can hire a translator reasonably to go with you to get your professional services done or to help you with government paperwork. Donít worry. Sure youíll suffer on occasion, but youíll learn over time, have faith in yourself. Heck, I barely speak Spanish and I managed to buy a used car and even dickered down the price a bit. Plus youíll amass plenty of interesting stories to tell your friends at parties. The people here are warm, friendly, and laid back. And business is not done in an uptight manner….so no major worries.
For My New Neighbors
Remember not only are you my possible client but also my prospective neighbor and Iím still looking for a few more good friends, so consider joining us! You might be awfully glad someday that you did!