Your ultimate insurance guide


Investment Property in Mexico

It is common knowledge that manyselling directly to the retirees and to
Americans are finding that investmentthose wishing to hold the property as
property in Mexico may provide anpart of their real estate investment
interesting option. Is buying propertyportfolio.
for sale in Mexico still a good way toOn the negative side, there are a couple
reposition equity from appreciatedof factors to keep in mind:
domestic property?First, if you are planning on using
Trends show older people and retireesinvestment property in Mexico as a
are looking for inexpensive places torepositioning strategy, remember you
live and enjoy the rest of their livescannot use the popular 1031 exchange
and are finding places like Mexico veryapproach because the rules limit
attractive. Should you be the one whoreplacement properties to domestic
sells or rents this property toreplacements (i.e. land in the United
Americans? Is this a good way to putStates).
some of your appreciation from yourAlso, many land-seekers are encountering
property in the United States to work?a variety of obstacles with the
We will explore some factors for you toinvestment itself, including
consider:skyrocketing real estate prices and
Overall, the appeal of owning investmentconfusing laws. Under the Mexican
property in Mexico is evidenced acrossconstitution, foreigners are allowed to
the country. For example:own land outright anywhere except within
In the last couple of years there has50 kilometers (31 miles) of the
been a land rush in the Riviera Maya, acoastline or 100 kilometers from a
small idyllic slice of Mexico's Yucatannational border. Within the restricted
peninsula. It is this combination ofzone, they can hold the property in a
beautiful beaches (or other geographicaltrust, or fideicomiso. While they don't
features) with inexpensive cost ofofficially own it, they retain the right
living this bringing Americans by theto use it and sell it for a renewable
hundreds to this place and many others.50-year period. For example, in Tulum,
From the long-time artists' enclave ofseveral miles of virgin beachfront are
San Miguel de Allende in the hills ofclaimed by an ejido--a form of communal
central Mexico to fast-growingownership that's fairly common in
sports-fishing and beach communities ofMexico. Under current law, ejidos can be
the Baja peninsula to Puerto Vallarta on"privatized," subdivided and sold,
the Pacific coast, there is plenty tosubject to unanimous approval by ejido
lure a sun-seeking retiree.members and time-consuming government
No place has boomed in recent years likeapprovals. Until that happens,
the state of Quintana Roo in Mexico'sforeigners are blocked from buying
far southeast corner. Anchored by thepieces of it.
high-rise resort destination Cancun atFinally, if you're interested in
one end and cosmopolitan Playa delinvestment property in Mexico, experts
Carmen an hour to the south, Quintanasay there are a few basic steps to help
Roo is the country's fastest-growingavoid heartache. First, ask a
state, with over a million residents. Anprospective seller to provide three
estimated 1,500 to 3,000 Americandocuments before proceeding with any
citizens live there more than six monthsnegotiations: 1) a copy of the title,
out of the year, along with a fewknown informally in Spanish as an
thousand more Canadians, Europeans andescritura; 2) a certificate of freedom
South Americans.of liens and encumbrances; and 3) the
The hottest section is near Tulum, justlatest tax statement for the property.
down the beach from a massive MayanThese documents will help establish that
fortress overlooking the Caribbean.the seller really owns the property free
While the area retains a funky 60's vibeand clear. Second, hire a reputable
(there's a nude beach--unusual forattorney before signing any documents.
conservative Mexico), in the pastThe nearest U.S. consulate can provide a
several years some swanky hotels andlist of attorneys in good standing.
real estate developments have beenThird, arrange for title insurance. In
launched.recent years major U.S. players such as
Indeed, with more than 70 millionStewart Title and First American Title
American baby boomers expected to retirehave gone into business in Mexico and
in the next two decades, many withoutthere is a thriving locally based
adequate pensions or health plans, someindustry, as well. For a cost of about
experts predict a vast migration to$5 per $1,000 of property, a title
warmer--and cheaper--climates. Often,insurer will protect a buyer against
such buyers purchase a property 10 to 15prior liens by tax authorities in the
years before retirement, use it as aevent that somebody else claims title.
vacation home, and then eventually moveFinally, make sure to place the property
there for most of the year. Developersin a fideicomiso, or trust. Fees run
are increasingly taking advantage of thearound $1,000 to $1,500 up front, plus
trend, building gated communities,about $400 a year, but that is offset by
condominiums and golf courses and arethe very low property-tax burden.



1 A B C D 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111