So, you’ve decided to be a shrewd investor and take advantage of a strong U.S. dollar to purchase property in Mexico. The problem now becomes finding the ideal property while still living in your home country.
Here are five tips to help you accomplish your goal:
1. Determine Your Budget
This is probably the most important one because it will define what options you have. If your intention is to live in a small Mexican village in the interior of the country, your budget can be relatively low; however, if your intention is to live near the coast inside a gated golf course community, the cost will be significantly higher. It’s important to set a realistic budget.
In Mexico, most real estate transactions are still cash only, meaning that you will be expected to pay the full amount to obtain the property. Financing options are available (more in a future post) but a substantial down payment is often required (30% – 50%). Also, the interest rates tend to be much higher than what we are used to in the United States.
This is one of the reasons that we decided to sell everything in the U.S. before moving to Mexico. We were able to use the money to eliminate our debts and buy a condo outright in Mexico. Now we continue to live debt free due to the low cost of living here.
2. Narrow Your Search Ahead of Time
Mexico is large country and you should narrow your search to a town or limited geographic area. If you don’t know yet, you might want to travel a bit more before investing.
3. Find a Trusted Real Estate Professional
This is the most challenging part of the entire process because most people are relying on Internet searches to find real estate agents or developers.
It’s important to keep in mind that anyone can build a professional looking website in a matter of minutes. Unless you have personally met the person or been referred by a trusted source, you have no way of knowing for sure if the person is who they say they are. Be leery of anyone asking for excessive personal information (e.g. social security number) or a security deposit for a property sight unseen.
Readers often ask me if I can recommend a particular real estate professional or development in Mexico. Since I live here full time, I have developed a lot of trusted contacts; however, my recommendations are limited to the area of the Riviera Maya (see map below).
If you are interested in being referred to someone that we recommend, send us a message via our contact form.
4. Plan a Trip or Two
If you are seriously looking at property in Mexico, it’s inevitable that you will have to visit Mexico at least once or twice during the process. I would recommend holding off on the Tequila shots until after the real estate negotiations are done.
5. Hire an Attorney
Before signing a contract, it’s a good idea to have a Mexican real estate attorney review it. This could save you a lot of headaches down the road.
Even if you don’t get an attorney to review the contract, you’ll still need one once the time comes to close on the property. This comes as a surprise to many Americans and Canadians buying property in Mexico.
I plan to dedicate a future post to explaining the role of attorneys in real estate transactions in Mexico and why they are so important.
Let’s Wrap This Up
Although it’s a good time to invest in Mexico, don’t foolishly rush into a real estate deal without doing your homework first. It pays to be a little cautious and to remember the old saying: If it’s too good to be true it probably is.