Browsing Posts tagged cheapest expatriate places

Panama beach

Panama can be one of the world’s greatest places to live on a lower budget than you could in a developed country, especially if you’re a retiree. It’s also a place favored by thousands of very wealthy Latin Americans and business tycoons, however. So whether you find the place a bargain largely depends on where you live and how you live.

As I’ve been mentioning lately, I’m working on a book called A Better Life for Half the Price, about moving abroad to a cheaper destination to lower your monthly expenses. Panama doesn’t figure into my World’s Cheapest Destinations travel book except as a brief honorable mention. While it’s cheaper than Costa Rica, it’s nowhere near as good a value as some other countries in Central America. It is a poster child for publications such as International Living though and has been for at least a decade. That’s for a lot of good reasons:

- It’s a very stable country politically.
- It uses the US dollar as its currency and inflation is minimal.
- The banking system is good.
- Health care is excellent and affordable in the cities.
- Taxes are low, including on alcohol and electronics.
- Regulations are minimal for setting up a business.
- It’s easy to get a residency visa.
- The pensionada program for retirees has terrific benefits.

Panama is no backwater dirt-poor country though relying on what they can grow or dig out of the ground to build wealth. There’s a large middle class employed in all kinds of decent-paying jobs, from call centers to quality construction to the Panama Canal to banking. Most multinational companies have a base here and the whole country is like a big duty free zone.

luxury real estate Panama City

I did an interview that will air soon with Taylor White of the Overseas Property Insider Podcast. He’s stacking cash buying and selling real estate in Panama City, so he subscribes to the philosophy of “You’re going to spend what you’re going to spend, no matter where you are.” For some people that’s true and they didn’t move to Panama City to save money. Taylor spends about as much as he did in San Diego. You can spend a few hundred grand on a fancy condo with a view and there are plenty of temptations in terms of high-end restaurants, clubs, casinos, and beach resort excursions. For many, especially wealthy Latinos, the capital of this country is a “work hard, play hard” city akin to Miami. Living here can cost far less than Miami if you’re careful, but you can easily spend as much as you would there if you want.

There are retirees living in Panama City for less and the live abroad magazines and newsletters continually highlight people getting by on two U.S. social security checks—around $2,400 per month. A typical basket of goods and services is lower here, especially domestic help, transportation, domestic food, wine, and entertainment. Real estate is high for the region though as this is considered a “safe haven” investment for Venezuelans, Argentines, and others.

Outside the Big City

There are plenty of other places to live in Panama, however. Many retirees are attracted to the Chiriqui highlands around David and Boquete or the Bocas del Toro islands. Both these areas have far lower prices to rent or buy.

Panama adventure

Former Texan Richard Kongable lived in a few places in Panama before moving to a rural area near Volcan, on the side of a mountain. I tried a few other places in Panama before settling here,” he says. “I like that I never need heat, I never need air conditioning, and there’’s always a gentle breeze. I’m on the edge of a valley, with a volcano on the left and two rivers. I can see islands in the ocean even though it’s an hour and 20 minutes away.”

Richard rented his house for years for $300 a month and thought he was going to have to leave eventually when the American owner put it up for sale. Instead the owner fell into health problems and needed to sell in a hurry, so with no buyers in sight Richard got the 1,600 square foot house for half price: $25,000. He estimates that his family of three spends about $1,700 a month, including car expenses and about $300 a month for his son’s private school.

Retirees Kris and Joel Cunningham pay $385 per month for a house in a nice middle class neighborhood on the edge of David, Panama and they love it. “We have woods and a river behind us, there’s only one way into the neighborhood so it feels really safe. We’re surrounded by local professionals who are just lovely people.”

The Cunninghams were paying $1,200 per month in Sarasota, Florida where they lived before on their mortgage and taxes. If they had been renting, it would have been more. “The house next to us, similar to what we have now, was renting for $1,500 per month,” she adds.

They have been living on her husband’s social security payment and have a little savings from selling their house in Florida. Kris was about to start receiving her own social security payment when I talked to her, which will double their income and enable them to meet the income requirements for the pensionada program: $1,000 for one person plus $250 for each dependent. “It’s already so cheap though, I feel kind of guilty getting all those extra discounts,” she says.

Kris Cunningham says she has been pleasantly surprised by low costs in Panama, particularly groceries. “Food is definitely a great deal, especially fruit and vegetables. If you spend $20 on those in our local market it will be more than you can carry. We paid two or three times more for almost everything at home, including meat and fish. If you buy what the locals buy and cook, living here is very cheap.”

There’s the key advice that applies almost anywhere in the world: eat what’s local and you’ll probably be both healthier and wealthier. The usual advice that goes with that is to avoid imported products. With some of the cheapest wine and liquor prices in the world here though, you don’t have to make any adjustments in what you drink. This is one of the few places in the world where California wine is cheaper than in Napa Valley and Chilean wine is cheaper than in Santiago. (See this post on prices to booze it up in Panama.)

Nicaragua cost of living

$2 appetizer platter at a nice restaurant in Nicaragua

“If you make $1,000 a month, you can drive a small car, take your family out to decent restaurants sometimes, and visit a place like this on the weekends.” That was an offhand comment from my Nicaraguan guide Pablo when we were at the overlook area checking out Lake Apoyo between Managua and Granada. “On that salary, you are middle class here.”

A lot more people are stepping up to that level in Nicaragua as the economy keeps improving and its relatively low crime rate make it a place international companies want to invest. If you’re coming from a developed country though, it’s an incredibly cheap place to live.

I do an annual post and individual country rundowns on the cheapest places to live in the world and there’s one key thing they have in common: most people earn less in that country than most people earn in yours. The big picture really is that simple. If you come from a country where the median income is above $40,000 per year, as it is in the USA, Canada, or Australia, then you’re clearly going to feel richer if you go live in a place where the median income is more like $6,000 a year. Even if you’re just living off a Social Security or pension check.

shopping Nicaragua

1/5 the price of Safeway, Kroger, or Tesco

These official numbers are kind of clumsy, of course, whether you’re talking about median income, per-capita GDP, or some other yardstick. Some “work” isn’t counted correctly, bartered goods don’t figure in, and naturally people under-report their real income if there are tax implications. Still, whether an average worker in Nepal makes $600 a year or $900 doesn’t make a big difference for my point. Compared to the Nepalis you’re loaded, even if you’re making the equivalent of a fast-food burger flipper.

If you’re living in a more expensive place, however, your money is worth less. Your purchasing power is crappy. Per-capita GDP may be almost six figures in Norway, but you’ll pay out the nose for virtually everything you would spend money on. It may be only 1% of that in Cambodia, but you can find a good meal for a couple dollars. In a sit-down place with a waiter. Then in the U.S., you have to factor in health care costs, which are astronomical if you’re not covered by a company health plan. This illogical, for-profit arrangement does not exist in most of the rest of the world.

Which brings us back to my travels in Nicaragua earlier this month. I was working on a few articles on assignment, so I had an English-speaking guide driving me around, one who had grown up in Miami and then moved back to Nicaragua when he was in high school. He wants to get back to the USA at some point, to take his kids to Disney World, but he’ll keep living where he is. His electric bill is usually eight or nine dollars. His house is paid for. His family eats very well on what he makes.

Granada house for sale

House in the center of Granada, for the price of a BMW…

I had coffee with a retired couple living in Granada and I’ll profile them in the book I have coming out later this year. “My pension alone is 3-4 times what the average Nica makes,” Jim told me. We spend around $1,800 a month, which is extravagant by local standards. We live in a big air-conditioned house with a swimming pool and pay $650 a month in rent. We eat out whenever we want, wherever we want. Medical care is so inexpensive here we don’t even have insurance. We just pay for things as they come up. I had to go to the best hospital in Managua for surgery and it was cheap enough that I put it on a credit card.”

Another couple I’ve been corresponding with there has lived in Leon, Granada, and now San Juan del Sur for around $1,400 a month, while having a really good time. They’re sensible with what they spend, but not all that frugal when it comes to having fun. Their housing is only $300 of that.

Flor de Cana

$4 – $8 for a bottle of rum with set-ups in a bar

I like Nicaragua and I could live there, but this is just one country out of many that will have a detailed chapter. It’s one of the best deals, yes, but there are plenty of countries out there where the per capita GDP is 1/4 or less than what it is where most people reading this blog are from. Some of them have pretty good infrastructure too: popular destinations like Mexico, Turkey, Thailand, and Colombia. It’s just that a “middle class life” has a much lower price tag.

After surveying people who have signed up for the Cheap Living Abroad e-mail newsletter, the verdict is in on the book title:

A Better Life for Half the Price

The second and third choices will get worked into the subtitle.

For those who are serious about cutting their expenses in half and upgrading their life in the process, there will be other packages available with worksheets, webinars, and more. Details to follow, but sign up here to get the inside scoop.

Lake Atitlan

Lake Atitlan, Guatemala

 

Somewhere in the world right now someone a lot like you is paying 1/3 what you do for a meal out, 1/4 what you do for a similar house or apartment, 1/5 what you do for transportation each month, and 1/10 what you do each year on health and dental costs. And they’re having a blast.

“May you live in interesting times” is a wish that’s certainly coming true for many in 2012, but not always in a good way. The U.S. recovery feels like the act of winching a sunken car out of a lake and it’s taking years to pull it off. Europe is in full meltdown mode, with little agreement on how to fix the problems. The boom in the BRIC countries (Brazil, Russia, India, and China) seems to be braking fast as demand from the rest of the world slows and internal politics make the situation worse.

Even in countries doing relatively well, like Thailand, Vietnam, Turkey, Chile, Panama, and Mexico, when Europe and the U.S. get the sniffles, everyone else comes down with a cold.

A good $1.50 reason to live in Thailand.

But some people are living quite well right now without being wealthy. They’ve moved to one of the cheapest places to live in the world instead of staying where they were born and whining. If you’ve got some cash or a stable income, temporary economic problems present great opportunities. In some parts of the world, historic opportunities are here that may not appear again for decades or more. Even in stability, however, some very nice places to live just have a lower cost of living. So you live well for less.

As always, renters face different circumstances than buyers. Young mobile workers face different challenges and have different needs than retirees. In all cases, take what’s below as a starting point and do your homework! Every year when I do this post, I get dozens of comments and e-mails saying basically, “Here’s my situation. Where should I move to?” Perhaps there’s a business in there somewhere for a consultant, but I suspect most of the people asking this are looking for a free shortcut. There is no such thing. Research and personal visits are the only ways to find a place that’s right for you. Travel, try places out, and invest as much time in this choice as you would any other major life choice. And rent at first in case you make a mistake! Some places look better as a tourist than they do as a resident.

Now that House Hunters International has been exposed as being totally fake almost every episode, forget the idea you can travel to some place you’ve never visited, pick from three houses to find the perfect one, and be done in a weekend. Finding your perfect spot and a good value—renting or buying—requires some time and effort. Just like it would in your own town you know so well. Subscribe to International Living Magazine, find articles and expat message boards on places you’re considering. Look at Craigslist for that city to gauge rental prices. (Here’s the apartment rentals page for Ecuador, for instance.) Buy e-books written by people who live there. This is your future life we’re talking about, so invest in it!

And remember—moving abroad is not some freakish thing nobody has done before. Foreigners own the equivalent land area of New Jersey in Argentina. There are over a million Americans and Canadians who live at least part of the year in Mexico. If you added up all the expat Americans abroad, it would equal the population of Connecticut. So ignore the paranoid naysayers and go find your cheaper, more relaxed destination with a sane and humane health care system.

Cheapest Places to Live – Asia

Much of Asia is dirt cheap and there are plenty of places where you can live well on a fraction of what you spend now. Good food, lots of beaches, easy transportation, but…difficult visa issues.

In this interview, Godfree Roberts talks about his living expenses in Chiang Mai: $850 per month. He admits he has been living a pretty simple life, but that does include eating out for every meal. (In some countries, there’s not much savings in cooking for yourself.) So no, Thailand is not as cheap as it once was, but it’s still a bargain. Take a look at his medical expenses there especially. In the past you had to do visa runs from there though unless you had a corporate sponsor or were wealthy. That’s changing, finally. In short if you have verifiable income of $2K a month and invest $25K or more in a condo or business, you’re in.

Indonesia is even tougher because your tourist visa time is so short. Almost every expat who lives there has a work permit or an Indonesian spouse. You can’t really buy property otherwise and you can’t stay long enough for a long-term rental. If you could and didn’t have a child in school, you could easily live on $1,500 a month without trying. It’s the same story with Vietnam, where the price is right but a tourist visa is only good for one month.

Laos and Cambodia aren’t much easier, though with some patience and persistence, you can live in those places a pretty long time if you go through the right steps. Here’s a forum for people living in Cambodia and if you check that you’ll find people paying $400 a month or less (sometimes far less) for rent. A foreigner can buy condos there and supposedly you can buy citizenship if you flash enough cash. Here’s more on prices there.

cheapest places

You could live here for next to nothing, but you might want to upgrade…

Here’s a great, detailed article on Living in Laos, where it would also be very easy to get by on less than a grand a month. You’ll be renting for sure: for now a foreigner can’t technically own so much as a motorbike.

Malaysia is still the easiest place in Asia to buy your way in. Their My Second Home program officially asks for proof of income of $3,000 per month and if you’re going to buy property they want you to spend at least $147,000. If you can do these though, it’s a very cheap place to retire, with great health care and excellent food.

India and Nepal are easier places to live, at least for a while, because you get 6 months on a tourist visa in India 60-150 days in Nepal. Moon Living Abroad in India will give you advice on the official and unofficial steps people take, as well as all the cultural pitfalls. In either of these countries it would very easy to live on $1,000 a month or less unless you’re in one of the major Indian cities. (Most people, given a choice, would not live in one of those uber-polluted places anyway).

 

Brasov

Bargain-priced cafes on a pedestrian street in Transylvania.

Cheapest Places to Live- Europe

You will pay a lot more to live here, but Europe is down for the count right now and the list of countries in serious trouble is long. If you just look at debt crisis problems, the ones getting the most attention have been Ireland, Greece, Portugal, Spain, and Italy. I don’t expect Italy to get all that much cheaper unless all hell breaks loose, but you can already see massive real estate mark-downs in the others, in some cases going back to levels we last saw 10 years ago or more. If you’ve been thinking of buying a Spanish seaside condo or an ivy-covered cottage on the Emerald Isle, take a vacation and start looking at listings, especially auctions if you’ve got cash to invest.

I’ve seen a few articles that have Greece and “freefall” in the same headline. If you’ve got lots of time to wait for appreciation or want to buy a Greek island house to leave to your kids, you’ll find plenty of sellers. Remove the uncertainty though and just rent to get a deal for real. Look on Craigslist for Greece and you’ll find apartments for 250 to 500 euros all over the place, including one studio I saw with a penthouse view of the Parthenon. Start digging around locally on the islands and there should be plenty of vacation homes/condos for rent from people who can’t go on vacation right now.

In Spain, banks are in much the situation as the U.S., with lots of foreclosed real estate on their books they would love to get rid of. In some cases prices have dropped 50% and you can get 95% financing. Go for quality though and high-occupancy buildings for condos. There’s lots of junk on the “Costa del Concrete.”

Or you can just go where the living has been cheap all along. Head east to the Czech Republic, Slovakia, Hungary, Romania, or Bulgaria and you’ll see prices too low to believe. You have to get out of the tourist zones of Prague and Budapest of course, but look at this photo for what condos are going for in Sofia, Bulgaria. I saw ski resort ones going for even less in an overbuilt resort zone and towns I liked up north had full homes for similar prices. And everything else is a bargain too. See prices for travelers in Bulgaria.


 

Sofia condo prices

The USA Outlook

There’s a good reason Florida is filled with Canadians each winter. With the loonie appreciating greatly the past few years and U.S. real estate prices tumbling, it’s been a good time to look south. If you were looking at picking up a bargain here though, better get on it. Prices declined by double digits in most states in 2009 and 2010. In 2011 they only went down 2.1%. This year they’re expected to rise a modest but significant 0.2%. So the trend line is clear. Barring a new disaster, we should be on our way back up right now.

Some places are already seeing a clear uptick. Bidding wars have returned to some spots in California. I saw more Sold and Pending signs in my Tampa neighborhood this summer than I saw the previous 9 months combined. New home builders are getting lots of orders again. If you’ve got good credit and a down payment, you can take advantage of record low interest rates.

If you’re renting though, the U.S. is not so attractive right now. A flood of new renters have come on the market and inventory is tight nationwide, especially in good school zones and areas with lots of young professionals. Again though, locality matters. The average rental price of a 3BR house in Detroit is $721. In San Francisco it’s $4,770. If your job is mobile, use this cool rental prices tool to check out options.

Cheapest places to live Latin America

Plaza in Grenada, Nicaragua

Cheapest Places to Live – Latin America

When it comes to value and ease of moving, Latin America is a no-brainer. If you live in the U.S. or Canada, your best bet is probably somewhere to the south of Texas. Most of these countries welcome foreigners with savings or a pension with open arms. Health care costs are reasonable and in cities at least, the quality is on par with home. Sometimes better: a doctor in Uruguay or Ecuador will make a house call for $40 or less and a doctor’s visit in Mexico includes free follow-up visits to check progress. It’s not unusual to see health care costs anywhere south of the Rio Grande for 1/5 or even 1/10 the cost of the U.S. – and that’s in major hospitals with more well-trained doctors and nurses waiting on you. The doctor will hand you a card with his/her cell phone number in case you need it.

This is often the easiest region for a trial run too: you typically get to stay three or six months on a tourist visa. Becoming a permanent resident is about 100 times easier than it is for foreigners coming to the U.S.

cheapest places to live

Kitchen in a $500 per month 2BR/2Bath apartment in central Cuenca, Ecuador

Here, for example, is what’s required to become a legal resident of Guatamala: pension and/or investment income of US$1,000 per month and additional income of US$200 per month for each dependent. Show them the money and a clean police record and you’re done. If you don’t want to become permanent, this is an easy place to kick back for a few months and then leave. (It’s one of HoboTraveler Andy’s favorites.) Find a $200 apartment on Lake Atitlan and chill…

Your living expenses will drop massively, even in Mexico, if you don’t try to keep the exact same lifestyle you had at home. I actually upgraded my family’s life substantially living in Mexico (eating out and traveling more) and still spent 2/3 what I do at home—in a popular tourist town. Here’s what EscapeArtist.com says about costs in one of my favorite small towns in Honduras: Copan Ruinas:

There are apartments and houses tucked away all over the village. While there are no real real estate offices most locals will point you in the right direction. Within the city limits a house will rent for anywhere from $80 to $300 (3 bedrooms, 3 baths, maid service, laundry hookups, garage area, etc).

Room and Board (3 homecooked meals a day) in a modern furnished room will go for about $200 or less per month. Note that these are the higher end places, there are many many houses and rooms available for less, it is a matter of looking around.

In general, the most expensive places are the most developed and have the most foreigners (Santiago, Buenos Aires, Panama City, coastal Costa Rica, San Miguel de Allende, Ajijic), though even those will be less than home for many expenses and you might not need a car. The only places in the Americas you’ll probably spend more than in the U.S. are Brazil and Canada.

So where are the absolute cheapest places in Latin America? It depends on urban/rural and buying/renting, but in general Nicaragua, Honduras, Guatemala, and Ecuador are the best values. Be advised though that the last one is seeing a deluge of retirees. International Living has been singing its praises for years and the last retirement seminar they ran there got hundreds of attendees flying in. Any prices you see for Cuenca that are in an article more than a year old are probably prices you won’t get anymore.

Keep an eye on Argentina. Many economists see a huge second crisis on the way soon. Last time one hit, prices dropped like a rock.

The Africa Conundrum

Many of the world’s poorest countries are in Africa, but you hardly ever hear about foreigners moving there except as missionaries, Peace Corps workers, NGO workers, or other higher-calling reasons. That’s because although a place is cheap, that doesn’t mean its a place you want to move to in order to save money. If you want to live a simple life in a $20 per month block on a dusty plain, sure, you can live in lots of African towns for cheap, east and west. Most of the locals only earn a few dollars a day, after all.

It can be a bargain in rural Morocco with your squat toilet, but not so much in Marrakesh. If  you’re looking at going somewhere pleasant to settle down and live better than you do at home, that can be tougher. Morocco and Egypt are the only African countries I have in The World’s Cheapest Destinations book because to travel with all the amenities you expect on other continents you’ll spend far more here than you should have to. The same applies to living expenses.

South Africa is lovely, but not really cheap. A beach on the coast of Mozambique sounds nice—until you try to sort out residency and get a decent internet connection. I’m ready to have my mind changed with good examples, but I’ve seen so few up to now I can’t recommend moving to most spots there unless your job is taking you and covering living expenses.

Next Steps:

1) Research!

living in MexicoYou don’t read one article and then decide where to move to. At least you shouldn’t. Start with International Living Magazine as they’ve been covering this beat well for decades. You can get some stuff for free, but if you’re serious, subscribe. It’s a great investment for narrowing down your search and avoiding pitfalls. They sell detailed reports and e-books that are good. You can also buy Living Abroad in… books from Moon Handbooks, like the new Mexico one pictured here. For free articles and more dependable e-books/reports, see EscapeFromAmerica.com.

2) Travel!

Nobody, even if they know you really well, can tell you where you’ll be happy and fulfilled in this world. That’s true whether your budget is tiny or massive. You need all five senses on the ground in places you’re thinking of moving to in order to find the one that’s right. If you’re already traveling, that’s easy. Many travelers come to a place that seems like paradise, start looking around at apartments, and never leave. Others bop around from place to place every few months. Still others rotate back and forth between two destinations. You won’t know until you get there if you can have the life you want with the budget you have.

3) Network!

There’s already some expat living where you’re going unless you are incredibly intrepid. Chances are there are dozes to thousands there. Nose around, find out how to contact them, and ask questions. Buy them a beer or lunch when you arrive and they’ll save you weeks or months of hassles. Trial and error can be fun for shopping and restaurants, but it’s not so fun when you bust your budget for nothing. Search message boards, article authors’ e-mail addresses, and the local expat hangout after arrival.

4) Surround yourself with people who aren’t skeptics. 

Only 13.1% of the people in the state of Mississippi have a passport. (The other four worst are West Virginia, Arkansas, Alabama, and Kentucky). In New Jersey, it’s 50%. (The other highest ones are Massachusetts, New York, Connecticut, and New Hampshire). So obviously if you’re in a “blue” state you’re going to find more encouraging people than in a “red” state. If you’re in the latter, beware of the rah-rah USA types that think foreign travel is for commies and our dysfunctional health care system actually makes sense. Find your community virtually and get advice instead of scorn.

[Editor's note - If you landed here from a search on the web, you might want to check out this newer version: Cheapest Places to Live 2014.]

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I just spent the weekend in San Miguel Allende, perhaps the most popular place for expatriates in all of Mexico, but definitely the most popular non-beach location. There are somewhere between 7,000 and 15,000 gringos—most in post-retirement age—who live here at least part of the year. Nobody really knows for sure. They make up around 10% of the population and have had an outsized impact on the city in other ways, especially since most of them are quite wealthy in local terms. No doubt, they have transformed, upgraded, and beautified the city to an amazing extent. (Just check out this piece on luxury real estate in San Miguel de Allende for a taste.)

Upon getting back, I found this following reader question in the comments of an earlier post and I’m bringing it up here because it’s relevant in many other countries too that are magnets for expatriates.

My husband and I are coming to San Miguel de Allende for four months and will explore living in Mexico. Can you tell us if there is a “cultural” life in Guanajuato? We considered SMA because of theater/music/art etc… but are quite open to anywhere else. How is the day to day life? And would it be suitable for older people like us (not quite antiques but not as spry as we were before!)

Why we moved where we did

My family moved to Guanajuato for several reasons, one being that we wanted to become reasonably fluent in Spanish and knew there wasn’t much chance of that happening in San Miguel de Allende. I’ve been there four times now and always hear more English spoken on the streets and in restaurants than Spanish. I meet people who have lived there 6, 10, even 20 years and still aren’t close to fluent. They seldom need to use the language of their adopted country, so they don’t.

Also, Guanajuato is a university town, a young city. Its counterpart down the road is full of retirees. Yes there’s culture here—but home-grown culture. A local symphony, a multi-week music and arts festival, performances from Latino artists every week.

But Guanajuato is more of a walking city—a huffing and puffing city actually with all the steep hills—so people who have mobility issues or like to drive and park everywhere aren’t going to be as happy here. There are fewer elements of home as well, whereas in San Miguel you can do or get most anything you were used to before. But really for us, the question was, do we want to live in a real Mexican city or one that has been inextricably altered by the expats? One that is priced for Mexicans or one where the Mexicans are priced out of the historic center?

The Rest of the World

This is not just a Mexican question, of course. There are plenty of places just in Latin America where the foreign influence has been pervasive: Roatan Island in Honduras, Ambergris Caye in Belize, Jaco in Costa Rica, and Puerto Vallarta in Mexico, for a start. (You can generally figure out if a place has passed this tipping point just by looking at the real estate prices compared to the rest of the country.)

There are also plenty of examples in other parts of the world as well, like the “Costa del Concrete” in Spain or parts of the Greek Islands. There are also pockets spread throughout Asia, especially Thailand and the Philippines.

So do you want to “go native” completely, or do you want to be in a place where you can just interact with your own kind and not have to worry about pesky language or cultural barriers?

Perhaps the sweet spot is finding a place that’s somewhere in between. When I taught English in Turkey and Korea, both times I was in a suburb of the main city. So I could mingle with a few expats (mostly other English teachers), but we were just dots in a sea of locals. Because of that, I got serious cultural immersion but had a built-in social and support group.

As in where I am in Guanajuato, there are a lot of these sweet spot locations scattered around the world. Go find them yourself, learn the language, and get the benefit of far lower prices without completely giving up things you enjoy, like cultural activities and a good variety of food. The best part is, that’s another excuse to travel in a slow manner, spending enough time in places to really get a full impression. When you find your own sweet spot—one that never makes you feel like you’re in a theme park—you’ll probably know it’s the right one for you.

One of the most eye-opening experiences for most expatriates is finding out that things they bought for cheap in their supposedly richer country are more expensive locally in the developing world. In some cases, the cost is twice as much. Travelers discover this the hard way too when they go to replace their broken digital camera or get a new pair of sneakers/trainers with a swoosh or three stripes on the side.

Since I have a little Mexican beach house in the Yucatan I’ve gotten a taste of this oddity before, but now that I’m living here it’s even more pronounced. So to give you an idea of how this can play out, here’s a table on what’s cheaper and not cheaper in Mexico in comparison to an average mid-sized city in the U.S.

expatriate expenses

If you look closely, you may spot a pattern there that applies to many other developing countries as well. Labor is cheap, construction is cheap, local food is cheap. When it comes to goods that can pass through multiple middlemen, however, things get more complicated—and more expensive. In the U.S. and Europe, factories hum at ISO-certified output levels, Six Sigma bots wring out every inefficiency, and cost controls are analyzed every step of the way. Every wasted action gets eradicated.

In countries that cringe at the mere thought of all that—part of the reason we find them attractive—there are lots of leaks in the system and lots of hands getting their percentage along the way. Hey, it keeps more people employed that way and as a result of the higher prices people don’t buy as much crap that they don’t need. Things get fixed too—I’ve passed two TV repair shops walking around town in Guanajuato. When’s the last time you saw one of those?

Maybe no better or worse in the end, but just remember that not everything is cheap in the cheapest places to travel.