Invest The World -- International Travel and Investment

House Hunters International

One of my favorite shows to watch is, not surprisingly, House Hunters International on HGTV. For those not familiar with the show, it follows a very simple format. A person or a couple has set out to purchase property in some locale outside the United States. Sometimes, we watch a local in another country trying to buy his primary residence; other times, retirees are looking to move to another country and finally, some folks are just buying vacation homes.

The prospective purchasers, at least on the show, visit three different homes and by show's end make a choice. It's apparently an open secret that some of these shows are contrived and the participating buyers have often purchased but are going back through homes they'd looked at in the process.

The singular most distracting thing to me when watching these shows is that the episodes quite often don't tell us the buyers' STORY. And whereas, in the domestic version of House Hunters, the buyers' "story" (as I'll define it) may not matter, in House Hunters International, it truly is needed to make sense of the picture, sometimes.

In the United States, quite often, the location being lived and even the type and size of a house being purchased means little in relation to the people buying it. Credit is plentiful, jobs--even in this economy--are relatively accessible compared to other countrie, and the type of house being bought is often a function of job income, ability to tap credit, and loan risk tolerance.

By contrast, buying in a foreign country is much more difficult than the American model. First,in most foreign countries (especially the more tropical climes) cash is king and loans are rare. You can't often buy, for example, a $200,000 home with only $40,000, as you could in the States.

Second, jobs making first-world American rates are hard to get. Think about it: part of the reason the cost of living is lower in some countries is because wages are lower. A job for an expat, if he can get it, is not going to pay the same as a comparable job in the States.

Therefore, what is often the case in foreign country purchases is that if you want to buy property overseas, you've got to bring your money over in full. And if you want to stay there and live, you often have to have some more money stored up to live off of if you want to continue living comfortably.

Some of the folks on House Hunters International, however, seem to exist independent of any real source of income, and the show just glazes over or ignores how they're able to come up with cash or finances to make their purchase and sustain their lifestyles.

In one recent episode, a man and woman who'd been dating and were living with another couple were going to purchase a home in Nicaragua on the coast of San Juan del Sur. Interesting enough, but the man of the relationship was 30 at most, and his girlfriend was probably still in her 20s. They listed his occupation vaguely as being involved with real estate development (though not the developer himself, apparently), and gave no occupation for her. Despite her apparent lack of a job, his one income, and their relative youth, they went searching for a home in the budge range of $500,000 to $1,000,000 US. Really?

They viewed beautiful houses in wonderful areas, but the entire time I was distracted by the simple question of "how"? How does a couple not in their thirties afford, for example, an NBA player's beach getaway worth $1,000,000?

If they're trust fund kids, or he somehow has succeeded wildly in his field, hey, that's great. But is that really representative of the people who'll be looking to buy in Nicaragua? Does that particular episode really provide practical guidance for others interested in buying there?

Aren't viewers other than me wondering how the heck they're doing what they're doing (and perhaps, can I do what they did)?

The couple from London cashing in their pre-bubble flat to spend a few hundred thousand on a villa in Spain--understandable. They entrepeneur who successfully created an invention--ok, got it. But where are they getting these younger buyers coming out of the woodwork, apparently with six to seven figures of cash to spend? Shouldn't that be on a show about the lifestyles of the wealthy than one trying to give us a glimpse into the "regular person's" house hunting process abroad?

Perhaps they should create a spinoff where we could learn how the people got to the point to where they COULD buy the fabulous homes in foreign countries with cash up front. THAT would be something we could learn from.

Labels: House Hunters International

posted by Wesley Deaton @ 7:54 PM