Mexico has long proved to be a good place to buy a second home or to retire. The weather is warm and there is a wide variety of locations to live. You can live in the mountains, in the wide countryside, in the suburbs, or along the miles of pristine coastline. Mexico has an intriguing culture, good food, and beautiful homes. Most of the architecture still retains much of its Spanish influence. You have everything from the stonework, tiled floors, archways, lush vegetation, and intricate ironwork.
The best thing about homes in Mexico is they are cheaper than those found in the U.S. You can buy a nice sized home in a nice location for a fraction of the price. Where are the cheapest homes in Mexico? Well, they are everywhere. You can find cheap homes in different parts of the country. In depends on where you want to live.
Just like buying a home in the U.S., you need to shop around to find the cheapest home that suits your needs. But buying a home in Mexico is a little different. You need to know what to look for as well as the different rules and regulations. Here is what you need to know.
Why Mexico Has Cheap Homes
Mexico is a great place to own a home because almost everything in Mexico is cheap. From the food to the retail products to the utilities, it is all less expensive than the U.S. The real estate is also less expensive. A nice home with over 3,000 square feet can be bought for under $70,000 in U.S. dollars.
The monthly bills for a house in Mexico is cheap, too. The electric bill averages around $50 a month for most homes. You can even have a water bill that will probably never get over twenty dollars a month. Plus, the taxes on a home, even one with a lot of square footage, run around a thousand a year.
The food in Mexico is incredibly cheap. A household with a family of four can easily live off around $100 a week. The markets are full of fresh vegetables, meats, and spices. Shopping in a Mexican market can be a real adventure, too.
If you need any work done on your home or you need to hire some help such as a gardener or a maid, the labor is very inexpensive. Simple, manual labor costs about a $100 a week. Because the Mexican economy has its ups and downs and unemployment is high, workers who make that much will often be eager for the job.
I should mention that despite some people’s stereotyping, you don’t have to live next to a drug lord to own a house in Mexico. There are many prominent businessmen and well-to-do families that live in neighborhoods far from crime. The country has good schools and many areas never see any significant crimes.
Popular Locations In Mexico
Mexico has long been known as a vacation spot. Probably the most popular tourists’ locations are Cancun, Cozumel, and Acapulco. Cancun is the largest attraction for vacationers. It draws in over three million people a year and has a prominent nightlife.
Acapulco is the country’s most famous beach. It doesn’t draw in the crowds like Cancun but have some great diving and snorkeling areas. Cozumel is similar with its long beaches, restaurants, and nightclubs.
When looking for property in Mexico, the popular tourist spots are probably going to have the highest priced real estate. Anywhere near the beach is going to bring more money. For the cheapest homes, you should get away from the tourist traps and see what else is available. Real estate in the interior and in the more arid regions are cheaper.
Some of the cheapest property in Mexico is in the central part of the country. Real estate in Mexico City is some of the best priced on the market. You can live in the city itself, within its bustling suburbs, or you can live on the outskirts in the country.
Wherever you look for real estate, you need to steer clear of a type of land known as ejido land. Ejido land was once land held in common by a large group of people. Because of Mexico’s early system of real estate, the ownership of ejido land is today held in question and you can never be sure who owns the rightful title.
Buying A Home In Mexico
Buying a cheap home in Mexico is a little different than in the U.S. It is recommended that you find a real estate agent who is bilingual that you can deal through. Real estate agents in Mexico do not have to be licensed so it can be easy to find someone who is inexperienced or just outright incompetent. It is also too easy to get swindled.
When choosing a real estate agent, find one that is a member of Associan Mexicano Professional Imobilarios (or AMPI). This is a professional organization that follows a code of conduct and ethics.
You will also need a real estate attorney. Your real estate agent can help you find one. You need to make sure that everything is done to the letter of the law. Mexico has a reputation with for real estate titles. So you need the advice of someone who is familiar with Mexican real estate laws. It is also advisable that you take out title insurance to protect your home. Once you find a home that you like, you would fill out an application just like you would in the U.S.
Have the home inspected before you buy it. Just because it looks good to the eye doesn’t mean there isn’t something wrong with it. Hire a professional to look the home over.
You can try to find financing for a home but mortgages in Mexico are very rare. 90% of all home purchases are done with cash or check. Because of the rarity of mortgages, a house may be on the market for quite some time. Homes that sit unsold can be haggled down in price as the owner may be desperate to sell.
Mortgages, when they are approved by a bank, are expensive. The interest rates can be as high as 14 to 15% on a thirty year mortgage and the bank can require a down payment of anywhere from 30 to 40%. You can try to get a loan from a bank in the U.S. but most will decline because they prefer property to be in the U.S. and subject to the levels of U.S. equity.
All sales of home sin Mexico are conducted in U.S. dollars so there is no need for conversion of money. In Mexico, there are no limits as to how much money you are able to move in and out of the country.
Restrictions To Buying Real Estate in Mexico
Mexico has some rules and restrictions to buying a home. One of the major rules is that foreigners are unable to buy land in restricted zones. They may not own land within 30 miles of the ocean and within 60 miles of the border.
There is a way around this, of course. You can set up a bank trust, also known as a fidecomiso. This trust is set up through a bank, which owns the property, but as the trustee, you have complete control over the property. It is only for residential properties, though, no commercial. The bank will hold the title, but you own the property in all but name. You can make renovations, rent it out, or even sell it without the bank’s consent. The trust passes on to your beneficiary in the time of your death.