So maybe you are thinking of moving permanently or temporarily to a Latin American country. You have heard that Latin America is supposed to be really cheap... so you should be able to live like a king, right? Well, yes and no. There are a number of factors to take into account in considering whether a gringo can really live all that much cheaper in Latin America.One of the most substantial expenses in living in Latin America or anywhere else is RENT. Here are a few things to consider in anticipating whether or not your rent money in the U.S. will be sufficient to afford you a palace overlooking the Caribbean:
Where are you coming from? For one thing, it depends on where you have been living in the U.S. For example, when I graduated from the Ole Miss in 2006, I think that I was paying a little over $300/month for half of a 2 bedroom-2 bathroom house. Maybe it was closer to $350... Anyway, at one point I was paying about the same in Bocas del Toro, Panama. On one hand, I was not sharing the house in Bocas with a roommate. On the other hand, the place in Bocas was sort of sh*tty. But the rent was comparable to what I paid in Oxford, Mississippi.
Then I moved to Boston, where our 3-bedroom apartment costs $2,700/month. I share the place with 2 friends, so I end paying a little more than $800 in addition to my share of utilities. So you can see that Boston rent money would probably get me something pretty nice down in Bocas del Toro, compared to my rent money in Oxford Mississippi.
Where are you going? Of course it also depends where in Latin America you will be spending time. Like I said, I paid around $350/month for not that nice of a place in Bocas del Toro, Panama. On the other hand, a decent place in a nice part of town in Panama City will cost you twice that amount. So we can conclude that a rental apartment in Panama City may be AS expensive and possibly even MORE expensive than an economy apartment in Oxford, Mississippi.
Let´s take a look at Argentina as another example. Like I said, I spend more than $800/month for rent in Boston (the 3-bedroom house totals $2,700/month). I was hoping to spend a lot less here in Buenos Aires, but I have ended up spending nearly the same as what I pay in Boston. On the other hand, I am living alone in a 2-bedroom apartment in what is arguably the ritziest area of Buenos Aires - Recoleta. My Boston neighborhood is nice - but I certainly don´t live in a luxury downtown loft.
This reminds me of another factor to take into account in considering whether living in Latin America is really that much cheaper than the U.S...
What kind of neighborhood do you want to live in? A foreigner in Latin America may be more likely to choose to live in nicer, safer (read "more expensive") neighborhoods.
Actually, when I came to Buenos Aires I did not plan on living in Recoleta. I checked out some apartments in the trendier, less expensive neighborhoods, and found some cheaper places that I really liked. But then when it came time to sign the lease, I realized that I would have to pay a broker´s commission as well as a substantial lump-sum deposit ($1,000). When I factored all of that into the equation, I realized that I was going to still end up spending close to what I pay in Boston.
So I decided to rent the more expensive apartment in Recoleta, because it belongs to a friend. I am paying more for the desirable location - but in avoiding a $1,000 deposit, I have more money in my pocket.
The rental deposit would not have been so large if I were signing a longer-term lease - but the lessor wanted a $1,000 guarantee from a foreigner who is here for only 5 months and may be partying a lot in the apartment.
So now we have identified yet another factor with respect to rent...
How long are you staying in Latin America? If you are prepared to sign a 1 or 2-year lease, then you can generally get more bang for your buck here in Argentina. But if you are only here for a semester, then you will have to deal with larger deposits up-front.
So you can see that the $350 that I used to pay in Mississippi and the $800+ that I spend each month in Boston each have very different reapurchasing power when it comes to apartments in Buenos Aires, Panama City or Bocas del Toro. My money could go further if I were prepared to sign a longer-term lease and live in a less-than-luxery neighborhood.
Oh but I just thought of another factor...
The hassle and expense of moving and accessing money. In Panama I have a bank account in a local bank, but I do not have a bank account in Argentina. This means that I can only access my money via ATMs - and each time I pay a fee. Furthermore, there is a limit to how much money you can take out at any one time - so I take out my rent money over 3 or 4 days. Each time I pay a fee.
I then have to go to an exchange center to turn my Argentine pesos into U.S. dollars - because my landlord really likes U.S. dollars. I pay another fee there at the exchange center.
The first month that I paid rent here, I didn´t have enough time to take money out of the ATMs over a few days - so I transfered money to my mother´s account and then had her wire the same money to me via Western Union. There was a $70 wire transfer fee.
If I were here longer, I would do the math to see if my rent in Buenos Aires really ends up coming out any cheaper than in Boston. In any case, the difference in what I spend each month on rent is probably negligible - but I am getting a nicer, more comfortable apartment for my money. So yeah, in the end my rent money goes further in Argentina than in Boston.
In any case, there is 1 additional point worth making here:
Whatever you end up paying in rent and no matter how great of a deal you think it is - 99% of the time you can be sure that you are paying an inflated gringo-price. Now if you speak Spanish you may be in a slightly better position to negotiate. For example, I was able to negotiate one of those $1,000 deposits down to $650. Nevertheless, the Buenos Aires rental market is kind of tough - and it just is not very realistic for me to expect to rent for the same price that may be available to a local. Especially in ritzy Recoletta... which is a good reason to try to live more like a local.
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