Published On: Sat, Jun 27th, 2020

What to Know Before Buying Investment Property in Mexico

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There has been an increase in the number of people who would like to invest in the Mexican real estate industry.

If you are planning to purchase an investment property in Mexico, then you need to know about a few things before you seal that deal.

First of all, it is important to note that Mexico has some of the most vibrant real estate industries in the world.

That’s probably why many people are rushing to invest there. You can purchase real estate property from beach resorts to big cities. Some of the famous beaches are found in places such as Baja, Mayan Riviera, and Cabo.

Below are some of the great places you can buy property in Mexico:

  • San Miguel de Allende – it has beautiful weather, mountains and is the cultural capital of Mexico.
  • Cabo San Lucas – It is a pacific beach perfect for vacations
  • Merida Real Estate – It is an old colonial city with affordable real estate property.
  • Playa Del Carmen – It is a Caribbean beachfront.

What you should know before purchasing any property in Mexico

  1. Rules for purchasing real estate property are different from those in the United States

What most people forget is that property management in San Miguel will likely be a bit different from property management in Tampa and other American cities. It is not advisable to make a large amount of investment if you have not familiarized yourself with the property management rules of Mexico. You need to learn about the real estate industry in Mexico to make an informed decision.

  1. Communal property

According to Mexico’s constitution of 1917, property or land in Mexico could only be owned by Mexican citizens or communally. That made it impossible for foreigners to own land. However, a 1993 amendment allowed foreigners to own real estate property via a Fideicomiso system. Under the Fideicomiso system, a foreigner is allowed to purchase property through a bank trust where the bank acts as the trustee. Besides that, foreigners have another option of buying real estate property through corporations.

  1. The purchase process

The buying process in Mexico is not different from that in the United States and other countries. All you need to do is to look for a real Estate agent in Mexico that lists properties for sale. Upon finding the property you want, the agent will negotiate the price to an agreeable amount. You will then be required to pay at least 5 to 10% to the property owner.

  1. The cost of purchasing the property in Mexico

You should also be aware of the prices of real estate property before you start the purchase process. Apart from the price of the property, you will be required to incur other costs that include the following:

  • Acquisition tax
  • Notary costs
  • Titles insurance
  • Registration and other fees

While the buyer pays the above costs, the seller only pays the agent fee.

  1. Real estate consultants

Just like in the United States, there are several companies in Mexico that do real estate consultation. The first step in getting the right property is by getting a reliable real estate advisor. You can do this by searching the internet or through referral.

In general, before you purchase an investment property in Mexico, it is important to know several things about the Mexican real estate industry. This will help you to make the right decision.



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