7 Keys to Buying Overseas Retirement Property

San Miguel de Allende, Guanajuato State, Mexico.

5. ...or enlist a pro: A large, international real estate brokerage should be able to put you in touch with an agent based in the country that you're considering. "If it's a global organization, then they probably have offices in various countries," says Brent Lipschultz, a principal in Eisner LLP's personal wealth advisory practice. In addition, you can find a list of agents with a certified international property specialist (CIPS) designation from the National Association of Realtors here. A CIPS agent will be able to refer you to a qualified agent in the country you've targeted. "That way they will have a reputable realtor that [potential buyers] can work with just like they would in the housing process in the U.S.," says Manfred Chemek, the CEO of international real estate firm Manhelm International. Buyers You can also locate a qualified in-country broker at WorldProperties.com, a website run by the International Consortium of Real Estate Associations, of which NAR is a founding member.

6. Know your buying options: Most retirees buying property overseas pay cash—using either their retirement savings or the proceeds from selling their U.S. home, Gallo says. However, "if it's a newer development—like [Donald] Trump and a lot of [developers] who have come in here to Panama—they are going to have their own financing [for borrowers] in place," Gallo says. With bankers becoming increasingly stingy with credit these days, it can be difficult—but not impossible—to obtain a mortgage on an overseas property, Lipschultz says. He recommends first reaching out to lenders in your destination country (your agent should be able to provide you with contacts). But retirees can also speak to their U.S.-based financial institution to try to arrange "creative" financing. "Some banks are not comfortable securitizing foreign property," Lipschultz says. "But if you've got money in a financial institution, they may be able to give you a loan by collateralizing a securities [portfolio] as opposed to the real estate." In addition, if your U.S. residence has appreciated enough, it may be possible to obtain a home equity loan to cover the cost of a second home, Gallo says.

7. Establish a brain trust: With legal codes differing from country to country, it's important to find a good lawyer based in your retirement destination. "They understand the laws there and they can make sure that you've covered all the legalities," Chemek says. (A CIPS or in-country agent should be able to recommend a couple of qualified attorneys.) At the same time, retirees should discuss the potential tax consequences of the purchase—which, again, will differ depending on the country—with their tax consultant. "The tax side is very important—not only from your vantage point here in the United States. You need to understand the tax laws in the [destination] country," says Ruth Krinke, a CIPS at Steamboat Real Estate, in Steamboat Springs, Colo.