For Cheap Apartments, Look Outside the USA

There are plenty of cheap apartments to rent around the world, just fewer and fewer in the USA–or in Canada and England for that matter. You don’t have to live with unaffordable housing, but you might need a big change of address to get back to sane prices you can really afford.

If it feels like living costs are getting more and more expensive where you live, it’s probably not your imagination. Rent prices across the USA are up 11.1% in the past five years and in some cities it’s far worse. And maybe not where you’d think. Prices rose more than 20% in cities as diverse as Stockton, CA; Colorado Springs; Tampa, Mesa, AZ; Arlington, TX, and Las Vegas. 

Meanwhile, I’m interviewing expats for the next edition of A Better Life for Half the Price and the vast majority of them are paying half that amount in a foreign country, often furnished. People in my Cheap Living Abroad group can’t believe the prices I list routinely, then they move and find a two-bedroom apartment for 400 bucks and it’s real.

The national average for a one-bedroom apartment in the USA is bumping up close to $1,000 this year and it’s already well over that in states from Connecticut to California. Virginia to Washington State.

Then if you want to step up and buy something, get ready for a very hefty investment unless you move abroad.

Pity the young couple living in the San Francisco Bay area that wants to buy a house. Real estate reports last summer said that the median home cost in the whole city had climbed to $1.7 million. Even if you just buy a condo, the median was $1.3 million. With just the increase in prices between 2018 and 2019 alone ($80K), you could actually buy a whole house in many parts of the world.

Want to know what that condo price of $1.3 million will get you in Mexico instead? How about a 5-bedroom house on the ocean with a view like this?

But if you head to the interior in any of the cheapest countries to live in, you’ll routinely find listings like this one in Cuenca, Ecuador. This fully furnished two-bedroom penthouse condo with these views is listed at $170K, which is 74K less than the median home price in the whole USA—and it’ll probably sell for less.

 

Even at the luxury level it’s easy to find a whole array to choose from for less than $500k in that city, which means someone could sell their California house and then move into a mansion here while having plenty left over to be set for life. (See more here on the cost of living in Ecuador for the non-rich.)

Stratospheric Housing Prices and Easy Cheap Living Alternatives

The median price for an apartment in Manhattan passed the $1 million mark  a few years ago and that even includes the parts that run through Harlem and the Lower East Side. The average sale price of a condo on the market as I write this is $1.39 million. You can expect to pay at least $800,000 for a basic 1BR place of 750 square feet–before the monthly co-op fees. Or you could spend $185,000 instead and get this place in a prime neighborhood of Buenos Aires. The complex has a pool, barbecue area, and gym.

How about if you have no intention of buying and just want to rent? The median price for a rental apartment in Manhattan is now $3,450. And don’t think you’ll be spreading out much either. At a median price of $5.17 per square foot, according to Zillow, that means $4,000 a month will get you all of 774 square feet. Something that would be called “really tight” in a normal city but is considered spacious in New York City.

“Oh, those are just the crazy expensive places” you’re probably thinking. Prices can’t be that crazy in the whole country.”

No, if you want to live in a depressed are next to mobile homes with confederate flags and cars up on jacks, you can pay a lot less. In general though, in anywhere desirable that’s thriving instead of declining, the prices just keep going up and up. In the entire USA, the median house price is now $244,000—basically a quarter million dollars.

That number is dragged down a lot by places nobody wants to live though. In the cities that are growing because they’re filled with educated people working at well-paying jobs, the price hikes are much higher than the 3.7% national average of last year. Here are a few 2020 median home prices from Zillow, to give you an idea:

Seattle $749K
Portland $455K
Austin $390K
Denver $452K
Bozeman $463K
New Orleans $232K
Nashville $281K
Tampa $243K
Durham $248K
DC $629K
Boston $633K

If you’re looking at this in 2022 or later, prices are up again by more than 10%. Sure, there are pockets around that are still a relatively good deal: cities like Little Rock, Omaha, or Pittsburg that have some cool things to do. In those the ratio of annual salary to starter home isn’t 5X or more, but don’t expect the deals to last. And even in those cities, the “good deal” is that you’ll only spend $180,000 on a house instead of three times that elsewhere. It’s still years of your net income and by the time the mortgage is paid off, three or four times that really.

It’s not just in pricey cities like San Francisco where prices have gotten out of whack with average wages. A study in The Economist found that 20 of the 26 countries they track had experienced inflation-adjusted rises of 5.1% or more. In the hot cities like New York, London, and Sydney, however, the average increase was 8.3%. Home values rose at twice the national rate in four Pacific cities: San Francisco, Vancouver, Sydney, and Shanghai. In some spots such as Tokyo and Shanghai, prices are still in a normal ratio range for incomes. In Sydney, London, San Francisco, Vancouver, and Amsterdam, however, prices are far outpacing rises in household income.

If you’re already in a home you own in those cities, you’re in great shape. If you bought 30 years ago, you’re a poster child for the investment benefits those realtors love to tout. If you’re trying to buy now though? It could go well, but you may end up looking more like the suckers who bought in 2007. For most people, real estate in a mature market is not a very good investment once you factor in the total cost of maintenance, interest, and insurance.

What’s driving prices in these premier markets is the same factor that can drive your exit: purchases by foreigners. “Foreigners snap up half of London’s princeliest dwellings according to Savills, an estate agent,” said the Economist report. It’s a similar story in Vancouver with investment from Asia. “Housing appears to be more than 40% overvalued in Australia, Britain, and Canada.”

So what if you do the same, but go downmarket as a foreigner instead? If UK prices have got you thinking you could never buy a house in your lifetime, take trip to Bulgaria where you can pick up this house pictured here for €5,720. That’s not a typo! The price is less than you’d pay for a beat-up Fiat.

It’s also not unusual. Check out Bulgaria real estate listings on sites like this and you’ll find 100+ places going for 50K euros or less. Right now you can go buy a furnished studio apartment in the nice ski town of Bansko for less than $15,000, or get a two-bedroom place you could live in year-round for under $40,000.

If you’re trying to avoid cold winters, prices aren’t that cheap in Portugal, but there are bargains galore there too.  Spain is priced higher, but they’re still in a housing crisis hangover so there are plenty of condos and houses priced to sell quickly.

Where to Find Cheap Apartments for Rent Around the World

In any of the countries I’ve covered a lot on this blog, you can generally find a cheap apartment that’s less than half what you’re spending in the USA or Canada without looking very hard. I know people where I live in Mexico who have moved here and chopped their monthly rent by 2/3 or more. People are still finding sub-$500 furnished apartments in much of interior Mexico.

Then there are countries that cost less than Mexico. In this part of the world, you can often find better deals in Guatemala (especially on Lake Atitlan), Honduras, Nicaragua, Panama, Bolivia, Peru, and even Colombia and Argentina these days. Living in Ecuador can easily cost you 1/4 what you would spend in a comparably sized city in the USA, Australia, or Western Europe. 

Many expats living in Thailand who write about their experience are paying less than $500 per month for a nice place and you find the same story throughout Southeast Asia, from Ho Chi Minh City to Kuala Lumpur to Phnom Penh to Bali. It’s cheaper still if you decide to live in India or settle down in Nepal.

Heading over to Europe, just surfing around online will uncover cheap apartment deals like this:

In Bulgaria, where I mentioned the cheap housing prices, even in the capital of Sofia you can find a two-bedroom apartment for less than 700 euros, in Plovdiv for less than 500. In the rural areas, “How much have you got?” See more here on the cost of living in Bulgaria.

In Budapest, for half what I was spending in Tampa, Florida for a 3-bedroom condo, I could get a huge 3BR place with parquet floors, a balcony, and garden. This studio apartment in an elevator building near a metro line is $470 per month including utilities and internet.

I mentioned before that you can live in Albania for about a year just on a tourist visa if you’re American. It’s easy to find cheap apartments too. Head here to find listings in English for two-bedroom apartments going for less than €400 per month.

In most cases though, you’ll find much better deals upon arrival. When trying to find a long-term cheap apartment rental abroad, you normally need feet on the ground to avoid the places priced for free-spending foreigners.

These are not unusual cases either. From Romania to Slovakia, Turkey to Montenegro, there are loads of empty apartments and houses for rent at a fraction of what you’re paying now. If you’re just renting, rather than buying, your risk is minimal. If you don’t like the place after a while, run out the term and then move on.

Pick up A Better Life for Half the Price, see which places look appealing, then go do a trial run or two. Rent a place for a year if you like it and start sorting out prices and neighborhoods. Then if you do decide to buy, you’ll know the pros and cons and have a good feel for values.

Counting a renovated kitchen, new wiring, and other upgrades, we’ve spent all-in around $110K on our house in Guanajuato, Mexico. Getting the same amount of space close to downtown where I last lived in Tampa would cost me…$565,000 at a minimum. That’s where prices start for a three-bedroom, two-bath condo like we last lived in. Most are far more. We paid $2,100 a month for rent (plus utilities) and were getting a great deal compared to others in our complex.

It’s difficult to even spend that much in Mexico outside the beach resorts unless you’re renting a luxury mansion through Airbnb. Most couples and families living here are spending less than that each month on their total expenses! Your view of what’s normal can change quite a bit once you decide you’re not putting up with unaffordable housing anymore.

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