In spite of the killer heat, and even though I am staying in a sort of historical district slum, I like it here a lot. I like the mix of people, language, food, and culture. I like seeing a Malaysian Indian woman in a traditional Malay kebaya, and a Chinese man in the standard white-with-blue-border longhi. Food is cheap, and the people are nic and friendly and definitely not pushy. There is a large ex-pat community, both those with a fair amount of money and those who are poorer, like me.
So I've been thinking about this as a place to settle for a year. The visa situation is good, since they allow you 90 days per entrance, no visa required, and you can take a bus up to Thailand and return an infinite number of times and get 90 days each time.
The down side is that if I'm going to settle somewhere for a year or more, I'd want to get out of the guesthouse situation and have an apartment, and I'd want a fairly decent one, with air-con and cable TV and internet access, and a Western bathroom. Suddenly I'm looking at a lot of money. The small studio or one-bedroom apartment is apparently almost non-existent. People live with their families until they marry, then they want enough room for a couple of kids. So apartments usually have three bedrooms. And cost $700 to $1000 per month. Now, I'm sure there are cheaper places, but I'm pretty sure that as a westerner, I'm never going to find them.
On the other hand, if I could handle the budget hotel, hostel thing, I could live pretty cheaply. In Chiang Mai, which eventually got on my nerves, the opposite is true. Apartments can be cheaper than staying in a guesthouse.
The solution would be to share, but I don't know if I could handle having two roommates. Or how roommates would handle me.
So for now I've crossed Penang off of my list of retirement locations. A lot of places have been crossed off recently. Chiang Mai, Phuket, and most likely I'll have to scrap Panama. I understand it has become much more expensive there.