Tips for moving abroad from a CFP who specializes in it

What started as a fun side project for Tommy Sikes has become a major part of his business.

With the youngest of his three children about to enter law school, Sikes began thinking about the next chapter for him and his wife, namely the increasingly popular possibility of spending at least a part of his retirement in Europe.

“We had this empty nest looming. We love Italy and France and started thinking, ‘What’s our next step?'” he told CNBC Make It. “How can we make this a reality?”

Sikes began looking for properties across the Atlantic, focusing on inexpensive locations far from big cities where he and his wife could pursue their outdoor hobbies, like hiking and kayaking.

When he began sharing properties he found online, Sikes, a certified financial planner, found a new base of potential clients who were excited about the prospect of owning property overseas but didn’t know How to do it.

These days, Sikes sends properties to some 25,000 followers and subscribers on X, YouTube and through a weekly newsletter. He understands the appeal of the lifestyle that such homes can offer people.

“I started discovering these incredible properties that were for sale in small towns and villages for $50,000, $75,000, $100,000. And I was shocked,” he says. “Some of them need to be repaired, but that’s the price of a new truck here in the United States.”

Still, Sikes is careful to caution subscribers and customers against purchasing such a property on a whim, even if they think they can afford it.

“There appears to be a gap in this type of planning, especially for Americans who need to plan their finances up front to ensure this is feasible.”

Here are three steps Sikes says you should take before buying property overseas.

Sikes works with a multitude of clients who, like him, are thinking about what retirement might look like. And for them, life abroad can present a major financial attraction.

“I could set up a simple financial plan for someone in the United States and set up the same plan for one of these places in France, and the cost of living would literally be 50%,” says- he. “This means that, for the same assets and expected income, you could improve your lifestyle…or potentially retire years earlier.”

Before you start dreaming of a fabulous Mediterranean retirement, you’ll need to take stock of your financial life, says Sikes.

“You’ll need an inventory of your assets, your income. What will your Social Security be? Do you have pensions? Are you maximizing your investments for retirement income? Those are the kind of traditional numbers,” he says. he.

It would also be a good idea to work with a tax professional to determine what living on retirement income might be like in your chosen country.

“Both France and Italy have tax treaties with the United States, which helps avoid double taxation,” says Sikes. “But they are quite different in how they treat retirement accounts like 401(k)s and Roth IRAs.”

The good news for those who want to acquire one of the properties published by Sikes: there is nothing stopping you from doing so.

“There are no restrictions for Americans purchasing property in Italy or France,” Sikes says. “You don’t have to be a citizen. You don’t even have to be a resident. You can literally buy something remotely.”

But even if that’s true for a country you’re researching, you probably still have considerable work to do before you’ll consider making an offer.

For one thing, you may need to be prepared to set aside enough money to pay in cash. In France and Italy, for example, mortgage loans to U.S. citizens are rare unless they have lived in the country and established a relationship with a local lender, Sikes says.

And even if you’re willing to make a cash offer, don’t expect a transparent process.

“The biggest problem I see is people trying to do it themselves. They don’t speak the language and all the documents will be in Italian or French,” says Sikes. “People need to temper their expectations. A lot of times you need to be able to call (the seller or agent). I’ve had people tell me they had to email the agent five times in three weeks and that they had failed to do so. “I didn’t get a response.”

That’s why it’s beneficial, Sikes says, to partner with a planner who specializes in these areas and works with people on the ground.

Without it, start taking language classes, he says. “Not like 10 minutes a day on an app on your phone. Start listening to music and news stories in French or Italian.”

Even if you think you’ve spotted your dream home on the French Riviera, your life there may be very different from what you currently imagine.

“People will fall in love with the property without realizing it’s in a town with one restaurant and no bars, and you have to own a car because there’s no public transportation, and that you have to drive an hour to get to a decent hospital,” Sikes said. “Always, always, always, the location is more important than the property itself.”

This is why, regardless of where you are considering buying a property, it would be wise to start by renting for a while.

“I would say for at least two weeks to a month, plan a test drive – a mini-retirement of sorts,” says Sikes. “Go to the grocery store, go to the market, go to the town hall, see if you can meet local people there, see if there’s an expat community.”

If you find a place you’d like to live, Sikes suggests hiring a local person as your agent so you don’t have to spend thousands of dollars meeting with real estate agents. This person can act as your eyes and ears on the ground.

But make sure you’re absolutely in love with the place you’re considering moving to, Sikes warns. “If you don’t like it and it doesn’t have the amenities you need, it’s not going to work in the long run.”

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