I have a small condo in Portland and one in Spain. I am looking to invest in a 3rd property but this time in Mexico. Do people with more local experience have any suggestions as to where to buy? I've been thinking about a single family home versus a condo. It would be nice to have a SFH. I want something I can buy cash so not much over $150k and I'm not much of a beach person and not trying to really Airbnb or anything. So, in that regard, I find cities like Oaxaca, Mexico City, or Guadalajara, or perhaps even Merida to do be potentially good places to invest.
It will be a place I'll spend some time in or have friends stay at or rent to someone long-term at a fair price.
Real estate investing in Mexico
Re: Real estate investing in Mexico
One problem about Mexico is, if you're not at your property, the risk of your stuff being stolen increases a lot. And sometimes, the ENTIRE F*CKING PROPERTY gets stolen. (through some kind of title theft/fraud/corruption)
I don't know exactly how common it is or isn't, but it's something to make sure you're considering. A lot of foreigners do own property in Mexico.
I don't know exactly how common it is or isn't, but it's something to make sure you're considering. A lot of foreigners do own property in Mexico.
Last edited by C40 on Sun Jan 02, 2022 12:58 pm, edited 2 times in total.
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Gilberto de Piento
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Re: Real estate investing in Mexico
I visited Mexico once and heard the same warning about property titles there. You buy a place and next thing you know people produce one or more other older titles claiming they are valid instead of yours. They take your place legally unless you pay them off, something like that. This was just one person's word though.
Re: Real estate investing in Mexico
It might be different in a gated community that caters to expats. Or in that vein, you may find more helpful information in expat related blogs. I'd imagine you have an easier time in tourist centric areas (near the coasts). I'd check out the state of Yucatán and Quintana Roo. The government is building a big passenger rail network there starting this year (Tren Maya) to boost tourism and I'd imagine properties along the route stand a good chance of being very sought after in the near future.
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RealPerson
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Re: Real estate investing in Mexico
Buying real estate in Mexico requires a really good attorney, specialized in real estate transactions. Use word of mouth of local expats as your main source to find such an attorney. Many issues are decided based on the attorney's interpretation of the law.
Secondly, for properties close to the coastline or to the borders, as a non-Mexican you need a trust because direct ownership is illegal. Not a huge deal but the annual fee charged by the trustee is a recurring cost to consider.
Thirdly, be extremely cautious when your property is located on an ejido. These are land coops that control large swaths of agricultural land in Mexico. The rules to buy land from an ejido are VERY strict. An experienced attorney is a must in these situations to verify that all the required procedures were properly completed.
I also have heard of someone claiming to own land that a person thought they bought. Maybe legit, maybe not? This happens especially with extremely desirable properties. I assume that the Mexican legal system is very slow and unlikely to rule in favor of a foreigner over a Mexican.
It is possible to be absent for extended periods of time. I recommend buying in a gated community, so that the property takes care of maintenance and security. Having an individual home, unprotected, is possible if you are plugged into the community. You can have neighbors and paid staff watch over the property. As a largely unknown and absent owner of a property, theft and even squatting are likely.
The animal suggested looking into Q.Roo or the Yucatan. Like him, I love the area. However, the Yucatan gets really hot in the summer and is low lying and very flat. Climate change will affect the peninsula fast due to rising levels of sea water, frequent hurricanes and unbearable temperatures. Also, Q. Roo is popular with the party hard crowd that is into buying drugs. That triggers drug cartel activity that sometimes causes violence affecting innocent bystanders. This happened recently and greatly affected tourist bookings. As a non-drug-buying individual you are unlikely to be harmed by this, but the psychological impact is significant. The OP mentioned Merida. That city is wonderful and is considered the safest metro area in Mexico. If you plan to stay there in the winter, it would be very pleasant. If your visits are in the summer, you may consider Oaxaca.
Finally, real estate in Mexico frequently sells very slowly. Be ready for a long period of time to sell your property when you feel that the time to sell has come. I have looked into buying property in Mexico and decided against it. It all depends on your reasons for buying and your personal circumstances. Best of luck!
Secondly, for properties close to the coastline or to the borders, as a non-Mexican you need a trust because direct ownership is illegal. Not a huge deal but the annual fee charged by the trustee is a recurring cost to consider.
Thirdly, be extremely cautious when your property is located on an ejido. These are land coops that control large swaths of agricultural land in Mexico. The rules to buy land from an ejido are VERY strict. An experienced attorney is a must in these situations to verify that all the required procedures were properly completed.
I also have heard of someone claiming to own land that a person thought they bought. Maybe legit, maybe not? This happens especially with extremely desirable properties. I assume that the Mexican legal system is very slow and unlikely to rule in favor of a foreigner over a Mexican.
It is possible to be absent for extended periods of time. I recommend buying in a gated community, so that the property takes care of maintenance and security. Having an individual home, unprotected, is possible if you are plugged into the community. You can have neighbors and paid staff watch over the property. As a largely unknown and absent owner of a property, theft and even squatting are likely.
The animal suggested looking into Q.Roo or the Yucatan. Like him, I love the area. However, the Yucatan gets really hot in the summer and is low lying and very flat. Climate change will affect the peninsula fast due to rising levels of sea water, frequent hurricanes and unbearable temperatures. Also, Q. Roo is popular with the party hard crowd that is into buying drugs. That triggers drug cartel activity that sometimes causes violence affecting innocent bystanders. This happened recently and greatly affected tourist bookings. As a non-drug-buying individual you are unlikely to be harmed by this, but the psychological impact is significant. The OP mentioned Merida. That city is wonderful and is considered the safest metro area in Mexico. If you plan to stay there in the winter, it would be very pleasant. If your visits are in the summer, you may consider Oaxaca.
Finally, real estate in Mexico frequently sells very slowly. Be ready for a long period of time to sell your property when you feel that the time to sell has come. I have looked into buying property in Mexico and decided against it. It all depends on your reasons for buying and your personal circumstances. Best of luck!
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RealPerson
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- Joined: Thu Nov 22, 2012 4:33 pm
Re: Real estate investing in Mexico
A few other thoughts: property taxes in Mexico are extremely low, medical care in many areas is excellent and very inexpensive, and the general cost of living is low. This is a terrific setup for ERE people, especially higher income individuals retiring before Medicare age.
Mexico's government has some quirks. Just recently, many Mexican immigration officials have demanded proof of lodging and return airline tickets to give you permitted entry into Mexico for the time of your proven stay. This can be a challenge for expats who are used to making 180 day visa runs. Nobody knows why they started doing that and if and when they will stop. Mexico deports more people every year than the US does, so this is not a trivial matter.
If buying RE in Mexico, I would encourage you to pursue permanent Mexican residency status. It is not that hard to obtain and solves the immigration issue. And you need residency to open a Mexican bank account to pay your bills in Mexico.
The cost of electricity is highly variable depending on the history of usage on your property. Low users (i.e. regular Mexicans) enjoy a subsidized electricity rate. High users (tourists or expats) pay a lot for electricity. This is especially important for high A/C use areas.
Finally, I would add a city to your list of potentials. Guanajuato is absolutely delightful and has a reasonable climate. Mexico City is fun but its air pollution is like smoking a pack of cigarettes. I cannot imagine living there.
Mexico's government has some quirks. Just recently, many Mexican immigration officials have demanded proof of lodging and return airline tickets to give you permitted entry into Mexico for the time of your proven stay. This can be a challenge for expats who are used to making 180 day visa runs. Nobody knows why they started doing that and if and when they will stop. Mexico deports more people every year than the US does, so this is not a trivial matter.
If buying RE in Mexico, I would encourage you to pursue permanent Mexican residency status. It is not that hard to obtain and solves the immigration issue. And you need residency to open a Mexican bank account to pay your bills in Mexico.
The cost of electricity is highly variable depending on the history of usage on your property. Low users (i.e. regular Mexicans) enjoy a subsidized electricity rate. High users (tourists or expats) pay a lot for electricity. This is especially important for high A/C use areas.
Finally, I would add a city to your list of potentials. Guanajuato is absolutely delightful and has a reasonable climate. Mexico City is fun but its air pollution is like smoking a pack of cigarettes. I cannot imagine living there.
Re: Real estate investing in Mexico
+1 to everything RealPerson said. Spot on.
I thought of this thread yesterday when Mrs. Ego and I ran into a friend we have known for twenty-five years and haven't seen in a decade. She and her husband are gringos who bought property in one of the expat hot spots in Mexico back in the 90s. I asked her if they still own the place. She rolled her eyes and said they still own it but haven't been to it in many years, though they have made several trips to other places in Mexico recently.
It reminded me of a phenomenon that exists everywhere but is particularly pronounced with expat places in Mexico. A place is hot for a few years and then suddenly dies and the expats move on. Back in the 80s the silent generation where all excited about San Filipe and Rocky Point. By the time I visited in the 90s it was in serious decline but some crusty old gringos who had no other options remained. The older Boomers began moving to Lake Chapala and Ajijic for what was hyped as the best weather in the world. At one point it was the largest settlement of US expats anywhere. They fled to San Miguel de Allende when the younger Boomers began going there. I am sure there have been at least two iterations since then. There are many other examples of this.
When things are good they are incredible. When they are bad they are incredibly bad. The change from one to the other happens incredibly fast.
I thought of this thread yesterday when Mrs. Ego and I ran into a friend we have known for twenty-five years and haven't seen in a decade. She and her husband are gringos who bought property in one of the expat hot spots in Mexico back in the 90s. I asked her if they still own the place. She rolled her eyes and said they still own it but haven't been to it in many years, though they have made several trips to other places in Mexico recently.
It reminded me of a phenomenon that exists everywhere but is particularly pronounced with expat places in Mexico. A place is hot for a few years and then suddenly dies and the expats move on. Back in the 80s the silent generation where all excited about San Filipe and Rocky Point. By the time I visited in the 90s it was in serious decline but some crusty old gringos who had no other options remained. The older Boomers began moving to Lake Chapala and Ajijic for what was hyped as the best weather in the world. At one point it was the largest settlement of US expats anywhere. They fled to San Miguel de Allende when the younger Boomers began going there. I am sure there have been at least two iterations since then. There are many other examples of this.
When things are good they are incredible. When they are bad they are incredibly bad. The change from one to the other happens incredibly fast.
Re: Real estate investing in Mexico
@chenda, I didn't want to poke a wound so I didn't pursue it, but I know the condo is in a place that is rapidly declining so I assumed it was because they no longer enjoy being there.
Re: Real estate investing in Mexico
@ego, yes you are probably better of renting in an uncertain market like that.
Re: Real estate investing in Mexico
@FRx you have already properties in two other locations. What triggered you to choose a 3rd and completely different location?
Imo, diversity is good, but in this case, it make it also much more difficult to keep up to date about local requirements, managing the property managers, maintenance, financing (if you ever want/need) etc. There seems to be little to no synergy due to the very different locations.
The main reason I would consider a new location would be because the expected yield is interesting.
Is this the case or can you explain why you are thinking about adding Mexico?
Imo, diversity is good, but in this case, it make it also much more difficult to keep up to date about local requirements, managing the property managers, maintenance, financing (if you ever want/need) etc. There seems to be little to no synergy due to the very different locations.
The main reason I would consider a new location would be because the expected yield is interesting.
Is this the case or can you explain why you are thinking about adding Mexico?