It’s late August and with August and September come hurricanes. The first hurricane of the season, Earl, has become a category 4 and threatens St. Martin, St. Barthelemy, St. Eustatius, the U.S. and British Virgin Islands, part of Puerto Rico according to the article linked above.
Hurricanes I believe are a considerable threat to anyone who plans on moving abroad to the Caribbean or Central America, as well as the Gulf Coast and parts of the Southeast Coast of the United States. The Gulf seems tailor made for developing large hurricanes that can cause considerable destruction as anyone from New Orleans will attest to.
In my research for my book on retiring abroad, I discovered that there is a hurricane belt made up of dozens of territories and countries that periodically suffer immense damage due to hurricanes. Surprisingly, though it is in Central America, Panama is not in this belt and thus does not suffer from hurricanes.
The countries that make up this region are prime retirement destinations for all retirees of all demographics and incomes. So the threat of a hurricane is not limited to those without money alone. But my advice to anyone who decides to settle in this region is the same: don’t buy property.
Why buying property in the hurricane belt is a bad idea
Not only do I think property is a terrible and investment, and have said so on occasion, in a hurricane climate it is an exceptionally bad idea.Why? Obviously your home is at risk of being destroyed or substantially damaged due to flooding and gale force winds due to a hurricane and the rain, wind and waves that come with it. At a minimum windows will be blown out and trees will fall through and around your property causing considerable destruction. To be safe you will need to flee to a safe place, and that may be difficult to do, particularly on a small island. In a developing country you may have difficulty escaping on roads to the interior as everyone else will have the same idea as you do and clog the roads with their cars.
Even if you manage to escape harm, you will have to deal with a damaged property. If you are wealthy, the loss of a home will not matter too much, but if you have invested substantially in the property and can’t afford to repair it, you will probably find it difficult to find a buyer. Who would want to buy in an area that occasionally suffers through horrific storms? The sight of a damaged house will only serve as a reminder of the threat of storms. Even if you find a buyer, he or she will demand a discounted price due to the damage you probably can’t afford to repair.
And what of insurance? Won’t they pay for your repairs? Even in New Orleans, ostensibly a city in a wealthy country, has seen home owners struggle with getting insurers or the government to assist them with their loss. If you realize that the government was probably responsible in some part for the flooding of New Orleans due to inadequately constructed storm walls, can you imagine what responsibilities a poorer government will make towards its residents in the wake of a storm?
I feel the key to being a successful expat, be in retirement or during your career, is to have as few material ties to the country you live in as possible. Though you may be emotionally closely tied, leave your investments, particularly property, back home in more stable environments. Otherwise you may find yourself suffering through substantial losses.
