After that big decision of best country for offshore retirement, the next issue of importance is "housing". The cost of housing often drives the decision of where precisely you choose to live.
Of course, you can rent for a while or forever for that matter. Renting is often a prudent course of action for at least 6 months thereafter most retirees prefer to "put down roots" in a community and that means buying or building a house.
If you purchase a house, the original owner's lifestyle will be imposed on you to a certain degree unless you make significant architectural changes. If you purchase raw land and build then you have maximum freedom to express your own personality and lifestyle requirements. In a country such as Panama, it may often be advantageous to build from scratch.
The next decision is whether you should hire out the entire construction project or become actively involved in it. The advantages of project managing your own house construction can be substantial.
Using Panama as an example, a General Contractor will charge in the USD$55 to $65+ range per square foot. In contrast, I have been able to build at the $20-25 PSF range per enclosed square foot. On an average 1500 enclosed square foot home (with considerable additional outdoor terrace and patio areas) this might mean a savings of more than $50,000. This money could have been used to build a larger and higher quality home, a larger lot or a better location.
Keep in mind that even if you decide to engage a General Contractor on a fixed price basis, you will still have to supervise his progress and stay closely involved. You will have to be around to make progress payments and to constantly ensure yourself that the quality of the construction meets the agreed standards.
There are also the inevitable "change orders" that will be required. Every "change order" serves to re-open the original fixed price contract. Depending on the General Contractor, this may or may not be a stressful experience.
My suggestion is that you act as your own General Contractor if at all possible even if you are not proficient in the local language. This will be a great way to learn it. Engage a small team of skilled construction workers (perhaps 6 or 8) with a diverse set of talents (which is more typical in a developing country than in a developed one). Pay these workers on a daily basis (about $20 per day for Panama) with a small bonus based on work accomplished.
Only engage specific subtrades for plumbing and electrical work as required. Contract with them on a fixed price basis subject to at least one or two competitive bids.
Negotiate a discount price with a major supplier of building materials, in advance, and make sure you never run out of materials. Simple. More later ....
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