Need your input on our plan

[RestlessRob]

Hello,
I have been a reader of this forum for some time now and decided to sign up recently. I have been reading all sorts of interesting case studies and the insightful responses for a while. So, I thought about posting my current situation and hopefully get some insight from you folks. Without further ado, below are my details. I apologize in advance as it is not in the format most case studies are here.

Me and my wife are in mid 30s, we have a 3-year-old son. We live in a lcol area in the US. My parents are retired in a lcol country for a while and we thought maybe someday we can do the same. We have visited that country a few times and liked it. So we started planning seriously about it for a while. We have been making some investments over there for a few years now. I have converted our projected expenses and assets to dollars from the local currency to keep it simple.

Assets
Cash in hand $370,000
Rental property 1: $50,000
Rental property 2: $45,000
Rental property 3: $25,000
Rental property 4 & 5: $20,000 each
Mutual fund: $3,000
Bond: $20,000
We have a separate fund to purchase 2 cars after relocating.
We also have allocated $140,000 cash to purchase a house as our primary residence. We are confident about this number.
We also have a separate $10,000 for our son’s education.

Income per month
Combined rent from all rental properties: $600
Interest income from my cash (after investing): $1,000
We also will be getting couple of additional rental property in 2 years which will generate another $400. A friend of mine has a tutoring center where he gives coaching/tutoring to students. He has offered me to join him, that might net me an additional $200 initially, however I do not want to count this money in my income as nothing is sure about this.

Expenses
I have researched this quite extensively and arrived at $1,200 for monthly expenses. This assumes paid home and cars which we will have. We have no debt. The inflation rate is averaging around 6% for the last 10 years and the projection for the next few years appears to be same or slightly less. Healthcare is lot less costly than here.

With all the above information, what are your thoughts on our success in retiring in this country from strictly financial point of view?

Please let me know if you have questions or I havent explained something clearly above. Thanks a lot for reading and providing your inputs.

[MrThatsDifferent]

I don’t understand your rental properties. Collectively, they’re around $160k but you’re getting $600 in rent. I’d probably sell all of them and invest the money. It seems like your interest will cover your expenses. Sure, move. You’re young, worst case is you move back and work. Have you budgeted for your wife and kid to return back to spend time with family and friends?

[Freedomin5]

Have you lived in this other country for an extended period of time? There is a huge difference between visiting the country a few times and actually living there. Will your son attend the local school or will he attend private school? Is it an English-speaking country? I ask this because if it’s not an English-speaking country and you want your son to attend local schools and then get his university degree in the US, you may have a problem in the future.

With the info you provided, I think you can retire to the foreign country; I just don’t know if you have enough to come back to the US and stayed retired should you decide you don’t like it there.

[waltworks]

Need clarification on WTF is the deal with the rentals. Is that equity you have? Market value? Something else? And why on earth did you buy them if you make basically no money?

IMO you are not in any shape to be moving overseas and deciding you're FIRE. But what you've provided is... incomplete. At best. If this is the best you can do in terms of planning, you should keep your nose to the grindstone.

-W

[efree]

Why the big secrecy about this country? People could give you better and more specific advice if you named it.

The income from your rental properties works out to be 4.5% per year. That's not a lot. I would probably sell them and just put the money into the stock market. Also, I assume it's the net income after expenses and taxes? If not then your net income from the rentals is really dismal and not worth it.

If we look at just the income and expenses, well you said it yourself - $1600 income and $1200 expenses. Obviously that works. It's just that you have to be really really sure that you and your family will like it there.

[RestlessRob]

Thank you all for replying.

I don’t understand your rental properties. Collectively, they’re around $160k but you’re getting $600 in rent. I’d probably sell all of them and invest the money. It seems like your interest will cover your expenses. Sure, move. You’re young, worst case is you move back and work. Have you budgeted for your wife and kid to return back to spend time with family and friends?

We bought our first rental property a few years back. We bought it to have a base when we visit this place. We stayed there for a couple of months when we went there and then rented it out. In a couple of years it appreciated quite a bit. We were surprised and so we started purchasing more rental units. I was not too familiar with other investments there at that time, so we did what we thought we understood at least a little bit. Overall we spent around $100k at various time in the last few years (5-6 years) and the current market value is $160k (maybe a bit higher). So strictly from appreciation point of view, I thought it wasn’t too bad.
Regarding your next point about wife and son, my wife’s dad has passed away, and she doesn’t have a very good relationship with her mom. Her sister is settled in London. 2 of her best friends is from this City, she met them during her undergrad and they have almost become like family in the last few years. So she is actually keen to live there as she already has a friend circle there.

Have you lived in this other country for an extended period of time? There is a huge difference between visiting the country a few times and actually living there. Will your son attend the local school or will he attend private school? Is it an English-speaking country? I ask this because if it’s not an English-speaking country and you want your son to attend local schools and then get his university degree in the US, you may have a problem in the future.

With the info you provided, I think you can retire to the foreign country; I just don’t know if you have enough to come back to the US and stayed retired should you decide you don’t like it there.

We have lived there for a total of maybe 8 months in the last few years, but never more than 2 months at a stretch. School wise I don’t think it would be a problem as there are at least 2 international schools  in this city where the curriculum is in English. You are right about we don’t have enough to come back to US and stay retired. That is the main reason to relocate – to stay retired with what we have and maybe do odd jobs or volunteering work as I feel like.

[RestlessRob]

@waltworks
$160k is the current market value. I have answered the why part in my previous post. Please let me know what is incomplete, and I will try to complete it.

@efree
I know a few people in my company who reads this forum/blog, not sure if they are members are not. I am quite sure if I name the country (along with the other details that I posted) I may get outed. Thats the only reason, as this relocation thing is still only at a planning stage, and I dont want to create unneeded stress at my work. Hope you understand. And yes, it is after taxes and expenses.

Thanks.

[Freedomin5]

International schools can be quite expensive. The one that DD attends is USD$50,000 per year...for kindergarten. It goes up from there. Have you worked the cost of tuition into your budget?

The only way we can afford tuition is because our companies pay for schooling as part of our expat work contracts.

In addition, I would suggest staying there for longer than two months, and make sure you experience life during all of the seasons there. We visited China multiple times before moving here, and yet life continues to be an adjustment.

[Luz]

If you plan to relocate to a foreign country, this book is the best: "The Art of Crossing Cultures" by Craig Storti.