How Much to Spend on Retirement Home in Portugal?

[Badger]

Quote:

Originally Posted by Chuckanut Another similar book is Extra Virgin. To young British women travel to Italy for a summer of adventure, Italian men, and sun. But they end up in a very conservative small town far from the beach scene and known for its olive oil. They are immediately suspect, and labeled as ‘stranieri’ Strangers! See how the title is a great play on words?

A book (not movie) that I have read a few times is "A Year in Provence" by Peter Mayle. A cute description of a move to Provence and the escapades of trying to buy and fix a home. There is also a sequel titled "Toujours Provence".



Cheers!

[NW-Bound]

Quote:

Originally Posted by Markola There’s a nice wine documentary on Netflix or Prime called “A Year In Port,” which can give you a feel for the Douro and the wine industry there.

Thanks for the recommendation.

I do not subscribe to any video service, but found this documentary on pluto.tv. I liked it enough to watch despite all the ads that that Web site inserted (I knew the Web site had to make some money somehow).

It was informative to learn about the hard life of the villagers working at the vineyards during the harvest: pick grapes all day, then spend another 3 hours stomping grape.

I found it funny to see them march to a called out cadence. The following clip is not from the movie, but shows a similar scene.

https://www.youtube.com/watch?v=dajJkGtllUI

My wife was not watching with me, but heard the cadence and looked over my shoulder at my laptop and asked what was going on.

It reminded me of a scene in Ben Hur. "Battle Speed!" Attack Speed!" "Ramming Speed!"

https://www.youtube.com/watch?v=WXh1tW16V-8

[NW-Bound]

Quote:

Originally Posted by Chuckanut Another similar book is Extra Virgin. To young British women travel to Italy for a summer of adventure, Italian men, and sun. But they end up in a very conservative small town far from the beach scene and known for its olive oil. They are immediately suspect, and labeled as ‘stranieri’ Strangers! See how the title is a great play on words?

I will see if the local library has this book.

Quote:

Originally Posted by Badger A book (not movie) that I have read a few times is "A Year in Provence" by Peter Mayle. A cute description of a move to Provence and the escapades of trying to buy and fix a home. There is also a sequel titled "Toujours Provence". Cheers!

As mentioned, reading Peter Mayle's books gave me the fantasy of following in his footsteps. I soon realized the impracticality of owning a 2nd home in Provence, but indeed, there were many imitators when his book became a best seller and was translated into 20 languages.

Besides the first book A Year in Provence (1989), I also read Toujours Provence (1990), and Encore Provence (2000), plus a couple more. And I still remember that I first learned of the jazz singer Diana Krall as she was mentioned in his fiction Chasing Cézanne (1997).

A couple of his books have been made into movies, but I forgot to look into it until now. Will see if the local library has a DVD copy.

And I also just learned that he put out the last book before his death: My Twenty-Five Years in Provence: Reflections on Then and Now (2018).

Peter Mayle sold his Provence home in 1993 when his fame brought him constant harassment.

From an interview:

Quote:

"We had people coming up the drive from Japan, from Australia, from Germany, from Sweden, from England, from America. At the beginning, it was really quite exciting ... Then it just increased in volume until we were getting four, five, six visits a day." A party of Swiss people elected to have a picnic outside his front door, and on another occasion he was about to sit down to Sunday lunch when he heard splashing sounds coming from his swimming pool: "When I went round to see what was going on, it was a couple of Italians with a video camera in the pool. They were taking photographs of each other with our house in the background."

[davismills]

Nice interview with an expat military widow that moved to Portugal and bought a house. I believe she spent 350K euros on a 2 bedroom apartment.

https://www.poppinsmoke.com/expat-re...g-to-portugal/

[bmcgonig]

Quote:

Originally Posted by Lagniappe If you have a notarized statement of continuous coverage from you US insurer, several companies will waive pre-existing condition exclusions and waiting periods. It is very hard to get initial coverage after age 70. But if you already have coverage, they will continue your policy. As far as increasing with age, here are two policies from the same company, both providing outstanding coverage and travel insurance. These are not the lowest price policies offered by this insurer: Nice policy. Premium policy 46-55. €1092. €1450 56-60. €1495. €1900 61-65. €1540. €2400 66-70. €1967. €2850 71-75. €1967. €3400 76+. €1967 €3798 Apparently you can get much cheaper policies through bank partnerships etc., once you are in country, but many expats start with policies like these.

Thanks for that. What company is it?

[Lagniappe]

Quote:

Originally Posted by bmcgonig Thanks for that. What company is it?

This is either Medis or Medal. You have to join a local expat organization (AFPOP) for a nominal fee to get the rates and the pre-existing condition waiver. From the interviews I have seen, the private hospitals they work with are modern and extremely responsive.

[jj]

Quote:

Originally Posted by Eric S What is "8g"?

I think it was a mis-typing of 8kg (kilos). The local airlines that have cheap flights around Europe often have much stricter carry-on bag policies, with the bag dimensions much smaller than US airlines and strictly applied weight limits of 7 or 8kg.

[NW-Bound]

Quote:

Originally Posted by davismills Nice interview with an expat military widow that moved to Portugal and bought a house. I believe she spent 350K euros on a 2 bedroom apartment. https://www.poppinsmoke.com/expat-re...g-to-portugal/

It's good read.

She paid 150K euros, not 350K, for her apartment in 2018.

[Finance Dave]

Maybe oversimplified and using very rough numbers but...

You said you spend $60k/year. Subtract your SS of about $11k/year, that leaves $49k/year you need from investments. Using the 4% rule, you need about $1.25M invested to maintain your lifestyle. Subtract that from the $2.5M you have, and that means you can spend about $1.25M on a house...but you said you wouldn't go over $700k so you should be fine.

However, the above assumes you start getting SS now...which you won't....so you'll have to adjust for getting the extra $11k between now and your FRA...which you should be able to do.

Whether you pay cash or mortgage will depend...I don't know anything about tax policy in Portugal....but I'd lean towards paying cash if no financial benefit to financing.


Good luck!

[imnontrad]

I think first of all, you have to decide WHERE you want to live. You might be better just renting until you decide (I am thinking of Altura, Portugal near the Spanish border - warmer winters). Also look at visa requirements. There is a 1 year visa but there is also a "Golden Visa" for buying a home over a certain amount - however, that also starts at 1 year block.
So I think you'd hate to buy a property and then not be able to get a visa to stay there.
Also, when you do decide to buy, determine how much time you want to spend on home maintenance. Maybe an apartment, which would give you more free time to travel would be a consideration.

[ychuck46]

Quote:

Originally Posted by Eric S Questions: 1. What would be the prudent max to spend on a house in Portugal? (note: I wouldn't imagine paying over $700K). I'm not thinking of it as an investment (though I do expect prices there to rise); I don't intend to move again, and my heirs are already well taken care of. 2. Should I mortgage it? I don't pay much taxes, so I guess it's mostly an inflation-related question. I do expect to beat the current 30 year rate with my investments.... thanks!

If I was in your shoes I wouldn't buy at all, but rent. You have no idea as to whether Portugal will float your boat after you have been there awhile. And the current situation there may change dramatically. If people think buying and selling a home here can be complicated, try doing that in a country you likely won't be a citizen in, perhaps the language will be a barrier, and so on. Rent and if you decide that you want to stay permanently then reevaluate.

[veganbetty]

I'm also considering eventual move to Portugal but I'm thinking that renting sounds best so that I can easily pick up and move elsewhere when I want. I would think you'd want to rent first and then think about buying.

[HI Bill]

Given your assets and budget, I'd say spend up to 1/3 of your total net worth. If you can get a loan for less than 3%, then that may be a way to increase your cash flow. But it really comes down to what level of home do you want, and what other spending priorities do you have? While you may easily be able to live on $40K, would doubling that budget and living in a smaller place give you the ability to do more travel, buy more toys, or enjoy more hobbies? Priorities of yours are unknown to us!

[shafer9]

I’m 75 so we r in different categories. But with your situation, I’d rent a nice place and travel all the time. Until you get tired of it. I would not worry about pennies, just have fun. I’ve had enough cancer (ok for now) to know you should never put off anything you dream of doing or think might be fun. Enjoy yourself, Portugal is a cool country.

[tenant13]

Residing in Portugal has additional financial incentive: https://tax-free.today/blog/nhr-residency-in-portugal/ It's only for 10 years but you're going to be there legally why not apply.

And here's a link to a real estate investment website for anyone interested.
https://www.pearlsofportugal.de/spec...fer-nomad-gate

[JohnYaker]

I'm 12 years retired in Fiji and agree with the earlier replies suggesting that Eric rent for a year or more before buying. During that year one learns about about the advantages and disadvantages of each area, the costs, and confirmation that it's the right place to live.


My first year was spent like a long vacation in Fiji. Local people helped me find the perfect seaside farm that I never would have found if buying shortly after relocating.

[Crosscarver]

Hi a european here

I also suggest you first rent before you buy. House Prices outside the cities in Portugal are quite cheap. So you don't have to spend much. If you would spend the amount of your current home you could have a castle.

Also remember that health care/ health insurance in europe generally is much cheaper. So your capital will last longer/ you can withdraw a little bit more.

cheers

[HarveyS]

I'll chime in with my thought: 25% of net worth maximum for housing. In my case that leaves plenty of cash flow from investments for living well, traveling often, giving to charitable causes, etc. As others have said, your spending priorities will shift this up or down.
PS - though you didn't ask, I am in the camp with a strong suggestion to rent for 2-3 years in various spots to see what you really want. You also get time to learn the local issues related to home buying/selling as well as ownership costs and repair/service standards.

[boatfishandnature]

We moved to the Algarve, in Portugal, nearly two years ago. If you do not need to buy a house in order to get your Golden Visa (we did), it is always a good idea to rent first, make sure that you get to understand the country, the lifestyle and the area that best fit your needs and then buy with greater confidence. In our case, we carefully selected a house for a short-term rent as a base from which to choose a property to buy. After seeing over 30 houses, we progressively fell in love with the one that we had rented, bought it, had it reformed, and have been very happy here ever since.
Great weather, great views, welcoming people, good food. What is not to like? Well, if you have not moved internationally before... the bureaucracy. We have lived in 5 countries. Moving anywhere (even to the U.S., as we did, three times) requires dealing with quite a bit of bureaucracy, as documentation that you had in your home country (and took for granted and did not even think about - simple things like proof of residence, for instance) will have to be patiently obtained in your new country. But, fear not, it can be done, you just have to consider it part of the challenge.
A tip: you have 90 days after you move here to be able to get your driver’s license by just exchanging the one from the U.S.. Don’t miss this window, as it will take several months to get it via the normal route (taking a required course, scheduling a test - takes a few months- and then taking it). Some local “DMV” offices count the 90 days from the day that you got the visa, rather than the day you actually arrive.
As other posters already mentioned, Lisbon (and Cascais, a gorgeous place nearby) is quite expensive. The countryside away from the coast is very, very inexpensive, but you may not enjoy the lifestyle. Housing costs in the Algarve are in-between and the place is well-developed, with a large expat community as well. You can get by without speaking Portuguese, though of course learning it will make for a richer experience.
Enjoy the process, it is exciting!

[Lagniappe]

Quote:

Originally Posted by boatfishandnature We moved to the Algarve, in Portugal, nearly two years ago. If you do not need to buy a house in order to get your Golden Visa (we did), it is always a good idea to rent first, make sure that you get to understand the country, the lifestyle and the area that best fit your needs and then buy with greater confidence. In our case, we carefully selected a house for a short-term rent as a base from which to choose a property to buy. After seeing over 30 houses, we progressively fell in love with the one that we had rented, bought it, had it reformed, and have been very happy here ever since. Great weather, great views, welcoming people, good food. What is not to like? Well, if you have not moved internationally before... the bureaucracy. We have lived in 5 countries. Moving anywhere (even to the U.S., as we did, three times) requires dealing with quite a bit of bureaucracy, as documentation that you had in your home country (and took for granted and did not even think about - simple things like proof of residence, for instance) will have to be patiently obtained in your new country. But, fear not, it can be done, you just have to consider it part of the challenge. A tip: you have 90 days after you move here to be able to get your driver’s license by just exchanging the one from the U.S.. Don’t miss this window, as it will take several months to get it via the normal route (taking a required course, scheduling a test - takes a few months- and then taking it). Some local “DMV” offices count the 90 days from the day that you got the visa, rather than the day you actually arrive. As other posters already mentioned, Lisbon (and Cascais, a gorgeous place nearby) is quite expensive. The countryside away from the coast is very, very inexpensive, but you may not enjoy the lifestyle. Housing costs in the Algarve are in-between and the place is well-developed, with a large expat community as well. You can get by without speaking Portuguese, though of course learning it will make for a richer experience. Enjoy the process, it is exciting!

Boatfishandnature,

I am in the middle of applying for a Golden Visa. I am going the investment fund route, since I don't want to commit to a location yet.

Please share (PM) any advice you have about the process.

So far my big takeaway is everything takes longer than you think it will, by a lot!