Cashing In on a Second Home in Mexico
How to Buy, Rent and Profit from Property South of the Border
Tom Kelly and Mitch Creekmore
“Cashing In on a Second Home in Mexico
How to Buy, Rent and Profit from Property South of the Border”
by Tom Kelly
Produced by Crabman Publishing
Copyright © 2011 by Tom Kelly and Mitch Creekmore
Copyright 2011 Tom Kelly,
All rights reserved.
Published in eBook format by eBookIt.com
ISBN-13: 978-1-4566-0520-9
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Although the authors and publisher have made every effort to ensure the accuracy and completeness of the information contained in this book, we assume no responsibility for errors, inaccuracies, omissions or any inconsistency herein. Any slight of people, places or organizations is unintentional. Neither the publisher, nor the authors, shall be held liable for any loss of profit or any other commercial damages, including to but not limited to consequential, incidental, special or other damages. The advice and strategies contained in this book may not be suitable to some situations. If legal advice or other expert assistance is needed, the services of an experienced, competent attorney or other professional should be contacted.
Preface
After nearly a decade of work in Mexico insuring real estate properties to foreign purchasers, the same issues always seem to surface regarding second home acquisitions:
“If I buy a house in Mexico, don’t I get a 99-year lease from the government?”
“I understand that I can buy a residence in Mexico only if the title is vested in a Mexican corporation.”
“I didn’t think Americans could own Mexican beachfront properties.”
All of these suppositions are incorrect. This book attempts to help clarify and explain why Mexican real estate, when using the proper safeguards, can be a terrific, secure investment. It will also explore the purchasing mistakes of the past, summarize several of the attractive new locations that are luring foreign dollars and explain why Mexico is so eager to welcome second home buyers from outside its borders.
The worst thing a potential purchaser can do is to remain ignorant of the law and procedures involved in the conveyance of real estate in a foreign country. As we state several times in this book, Mexico is not the perceived “Wild West” where anything goes and the prevailing Mexican attitude is “trust me, no problema.” It is inherently important for non-Mexican buyers to understand that Mexico has formality of law with authorized regulation of real estate development procedures at all levels. This process is coupled with a statutory government framework for the legal conveyance of real property.
Great personal wealth has been attained through real estate ownership, but for most of us, it has been limited to investment in a primary residence. Although Mexican real estate also can be a viable investment venue, Americans have had a great deal more trepidation considering properties “south of the border.” And for good reason—considering the history of some acquisitions.
Given today’s investment climate, however, Mexico provides an attractive, alternative arena for potential investment. Real estate in Mexico should have a similar appreciation “upside” as does real estate in a U.S. development—coupled with the advantage of use and enjoyment of the property as a vacation residence.
—Mitch Creekmore
Many years ago, while searching for yellowtail tuna with a group of older fishermen off the warm waters of Ensenada, Mexico, I was drawn to the tiny cottages that dotted the dry hills above the sea. What a place, I thought then. Who owned those spots?
Sometimes, nobody really knew—including the folks who had houses there. For Mexican families, it often did not seem to matter. For U.S. citizens seeking an affordable alternative to outlandish U.S. waterfront prices—especially second home buyers and retirees—the property ownership question became a moving target.
Jack Smith, the late Los Angeles Times columnist, for years described his experience of building a weekend second home just south of Ensenada. His contractor, confidant and eventual longtime friend—the curiously wonderful Romulo Gomez—often frustrated and delighted Smith with his extremely casual mañana attitude toward property rights, construction and life in general.
(“How will we get water?” Smith would ask Mr. Gomez. “The water will come. God will bring the water....”)
Smith, who died in 1996, compiled his columns into the legendary book God and Mr. Gomez, a must-read for anybody building in a foreign country (or hiring a contractor anywhere). It also served as a reminder that Americans should understand the ramifications of obtaining an interest in Mexican property, especially near the water.
Many things have changed since Jack Smith acquired his Ensenada property more than three decades ago. This book is an attempt to explain some of those changes——how you can now hold title to wondrous little getaways near the coast, havens that few visitors frequented a few short years ago. It will also help clarify tax ramifications and provide tips on renting the property when you’re too busy to enjoy the sandal life.
I wonder what Mr. Gomez would have accomplished with Internet access?
—Tom Kelly
This book is a guide to investigating, buying and renting property in Mexico. The rising cost of U.S. real estate, the want of a slower pace and warmer climate—especially for retirees——and the immense information library that is the Internet have contributed to the dreams and growing interest Americans have in Mexican property. Tales of friendly people, improved air travel and inexpensive living costs have awakened a dream in many people to find that treasure of a hacienda, fix it up and then enjoy long, leisurely seasons under the shade of an old tree or beach umbrella. And later, they see themselves later whiling away their retirement in sandals and shorts.
We lay out the important considerations involved in buying and owning property in Mexico. These include the necessity of understanding your own motives, developing a long-term plan for your property, learning about the legal and financial environment in which you will be an owner and obtaining the necessary familiarity with the local culture and language so you can enjoy your property as you intend.
This book contains real stories of how real people attained their dream of owning Mexican property. It includes helpful maps of the most popular areas where Americans, and others, have purchased. It also includes preparation checklists, outlines of specific regions, helpful websites and English-Spanish language tips and terms.
More important, it will guide consumers through the variety of nuances brought by the language and customs of this incredibly curious and beautiful country. Now, it’s time to start our journey.
Introduction—The Mexican Getaway