A photo of a road with a jogger

In 2005, my husband and I bought an old house in the center of Guanajuato, Mexico. I wrote a post about it for Rich Blog at the time.

The benefits — some of which we didn’t foresee when we bought the house — are many: having a stable investment during economic uncertainty in the U.S, especially the 2008 downturn; a potential future home if I’m widowed; enhanced fitness simply by walking everywhere; a community of both Mexican and expat friends to broaden our outlooks; and access to a world of home-exchange opportunities as a result of having an attractive home in a beautiful city.

Retiring on Less

The overall contours of our lives haven’t changed much in 11 years: our primary home remains an apartment we rent for $850/month near the bay in Eureka, on California’s North Coast; and our second home, the house in Mexico, where we usually live between Thanksgiving and March.

When we bought our home, Barry was 63 and I was 54, and neither of us was thinking about retirement. Today, we still work professionally, but not as intensely as 20 or even 10 years ago, and we’re more conscious of long-term security than we were.

As I discussed in my original article, we paid $107,000 for the house, and spent another $80,000 over the next three years of no-rush remodeling. We wanted to be on a quiet, pedestrian street in el centro, near everything, without a car. Guanajuato is pricier than some cities in Mexico because it’s a UNESCO World Heritage site and a university town. Other lesser-known towns are also very attractive but less expensive. Zacatecas, for example, is a beautiful colonial city barely known outside Mexico.

How Much to Save for Retirement

Rental Income and Home Exchanges

When we aren’t staying in our home, we cover expenses by renting it through Vacation Rental by Owner, or VRBO, a basic cost of $349/year, which includes access to VRBO’s efficient — but rather inflexible — payment system.

We also list our home on Craigslist, but most of our bookings come from VRBO. An expat up the street avoids the listing fee by renting her apartment through Craigslist exclusively and using Paypal to manage her rental payments.

We rent our home for $1,200/month. We don’t make a huge profit, but we like having the house occupied, and the extra amount we make pays our airfares.

We’ve had several property managers and are very happy with our present one, Mario, who is bilingual, originally from Guanajuato, and has lived and worked in the U.S. He meets our guests at the airport, walks them through the home upon arrival, is on call during their stay, and makes sure the house is in good condition when they leave.

Besides paying Mario, our costs include our cleaner, Mari; our on-call handyman, Juan (with an 160-year-old adobe home, maintenance is never-ending!); and our occasional gardener, Feliciano, who helps us with our little patio garden.

We also belong to a home exchange agency, homeexchange.com, for $120/year. Since joining, we’ve had delightful (and free, of course) home exchanges with people in Brittany, Prague, Ireland, and Portland, OR.

Aging Considerations

If Barry died before me, I could see our Mexican home becoming my base, as I’m comfortable speaking Spanish and have friends there. Guanajuato is a very human-scale, appealing, walkable town. Walkability is a priority for me, as I witness the drawbacks my (no longer driving) 95-year-old father is facing in his typical U.S. car-centric suburb. I do not want to live in a car culture when I’m in my 80s and 90s (or now, for that matter).

Related >> Essential Guide to Retirement at Every Age and Stage

Medicare is not covered outside the U.S., however, and some expat friends have moved back to the States as they aged and became more frail. Others have applied for Mexican health care insurance. As anyone familiar with “medical tourism” knows, you can get excellent and more affordable health care outside the U.S. We get our dental work done through our Mexican dentist, Gonzalo, who is the best, most thorough dentist we’ve ever had. I also had cataract surgery in Mexico.

Thinking About Living in Mexico?

It’s possible to live on very little in Mexico. We know many foreigners who earn an income in a variety of ways, including blogging, writing, offering workshops, leading tours, managing properties and teaching English. Creativity, initiative and an entrepreneurial spirit are essential.

If you’re interested in buying property in Mexico, you can go online and browse expat forums, but ultimately you can’t figure it out from a distance: you need to set aside some time to get to know the culture, find out about all the different options, and learn at least some Spanish. (We visited Guanajuato five times before we bought our house, renting various apartments and house-sitting, and two of those visits spanned several months). With a standard six-month visa, you can explore different parts of the country, travel around on comfortable long-distance buses, rent a room or apartment in a town that appeals to you, and meet both locals and expats. Only then will you be able to decide if retiring in Mexico is right for you.

For us, buying a home in Mexico was one of the best things we ever did.

Share in the comments: Would you consider retiring outside of the U.S.?

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