Lush tropical beaches, gorgeous sunny climate all year round, untouched beaches as far as the eye can see, it’s no wonder that more Americans and Canadians have made the leap to invest in real estate in Mexico over the last decade.
But how is it done? And where to begin?
These are the questions we are often asked, as many foreigners don’t know where to begin to purchase abroad and many don’t know the ins and outs of purchasing property in Mexico.
For example, did you know that, as a foreigner, you CAN purchase property in the so-called “restricted zone” of beach destinations? Did you also know that the simplest way to buy an investment property is through a formalized trust with a Mexican bank, called a fideicomiso?
As you may already know, real estate investments are one of the safest ways to grow your money and protect your future.
There are numerous reasons to choose Mexico for your financial investment. As we mentioned above, the enviable tropical climate that Mexico enjoys all year long as well as the breathtaking beach destinations near cities with all the services you may need.
Here are 3 additional reasons to consider broadening your investments to real estate in Mexico:
#1: High Economic Development = Excellent Return on Investment (ROI)
For a real estate acquisition to have and growing ROI, one thing is essential: a great LOCATION.
Mexico has countless locations with rapidly-growing economic development, modern infrastructure, as well as natural and cultural riches.
The Riviera Maya is a top destination that serious investors consider when purchasing property in Mexico. It’s home to beautiful destinations such as Cancun, Playa del Carmen, Puerto Aventuras, Akumal and Tulum. There are also other highly profitable areas to boost your investment such as the Pacific beach towns of Puerto Vallarta and Los Cabos, or the cultural hub of San Miguel de Allende.
Each of these beach destinations are great for investing in real estate for one simple reason: they are sought-after resort towns for tourism. If your long-term plan is to buy a property for retirement or to convert it into a vacation rental, these will provide a great ROI.
Mexico: in the Top 10
According to the World Tourism Organization, Mexico has been among the top ten most visited countries in the world for over a decade. The destinations that are mentioned are some of the most visited in the country and in high season, the demand for accommodations, in these fully-equipped and accessible destinations, exceeds the supply.
Mexican properties have the potential to be fruitful investments.
#2: Foreign Currency to the Mexican Peso
Investing in real estate in Mexico brings with it several economic benefits. Being able to rent properties for foreign vacationers in US Dollars or resell the properties in that currency generates a much higher return on investment, since the US Dollar maintains its value around 20 times greater than the Mexican peso.
The cost of living in the country (in Mexican pesos) is also much lower than in other places, even in destinations that can be considered "expensive".
Additionally, the annual property tax in Mexico (known as predial) is lower than in the United States, Canada and many European countries. This annual tax is paid prior to March 31 and its cost depends primarily on the size of your investment.
Tip: if you pay the property tax ahead of time (for example, in January or February) the government will give you a discount on the total. The discounted amount usually varies between 6-10%.
#3: Real Estate in Mexico = Higher Equity
The “capital gain” is the increasing value that the property you acquire obtains over time.
To determine the capital gain of an investment property, several factors are taken into account including the location (the accessibility of basic services near the property), highway proximity, commercial development in the area, and the influx of people, both Mexican and expats alike, in the area.
So why not get started today?
Mexico has various areas with increasing demand, solid infrastructure and modernization that go beyond its large cities. It doesn’t matter if you’re looking for a beachfront paradise to retire or a cultural gem in the country, you’re guaranteed to discover an extraordinary option to fit your budget and increase your investment over time.
Contact us and speak with a real estate expert today who can help you get started with a property to fit your lifestyle and investment plans.
Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.
Investing in Mexico real estate is a safe investment and the best way to protect your money in times of crisis. If you are interested in investing in a property and you don't know where to start, here you will learn what it is, why you should, where the opportunities are, how much money you need and how to do it.
Mexico Real Estate has a lot to offer in terms of great weather, beautiful scenery, and authentic Latin American culture. Mexico Real Estate has a lot to offer in terms of great weather, beautiful scenery, and authentic Latin American culture; plus, you will find lots of affordable real estate in Mexico.
Mexico is a major player in the international trade system and an attractive destination for Foreign Direct Investment (FDI). Mexico is the 13th largest exporter in the world and the first in Latin America. 5th recipient of FDI among emerging countries. 10th agrifood producer worldwide.
2023 is a great time to start investing. But so was 2022. The key point is that over the long term, investments generally do grow in value, even if there is some early volatility. It is far better to invest now, whenever now happens to be, rather than waiting for some ideal future opportunity.
Short of a recession — a very real possibility — consensus estimates are for about 5% earnings growth for S&P 500 companies in 2023. That's certainly less than what it was in years past, but still respectable.
The proximity of Mexico to the United States, the special relations between the two countries under the North American Free Trade Agreement (NAFTA), and its strategic geographical location make Mexico a highly-attractive destination for many sectors, among them, manufacturing and services.
Prices for new houses — which make up 40% of Mexico's total housing market — rose 12.8% across the year. Mexico's main real estate developers – including Javer, Ara, Vinte and Cadu – all raised their average house prices during 2022, some by as much as 30%.
House prices remained nearly unchanged in each quarter. The housing market has gradually improved in recent years, with real house prices increasing by an annual average of 2.75% between 2016 and 2021. Before that, the Mexican housing market had been relatively stable for nearly a decade.
Almost. Generally speaking, there are no restrictions on the ownership of residential property in Mexico, and you can hold the title in your own name. You can choose to hold it in a trust—for asset protection or estate planning purposes—but it's not required.
Mexico Has a Low Cost of Living. The biggest benefit of living in Mexico is the fact that pretty much everything costs less. Rent, food, transportation, and entertainment are all absolute bargains if you are used to paying American or Canadian prices. Your dollars go much further in Mexico than in the U.S. or Canada.
How much is a house in Mexico in pesos? The current exchange rate in Mexico is 18 to the US dollar — so with that in mind — the average house in Mexico can range anywhere from 1.3-million pesos to 18-million pesos, depending on its location, size and amenities.
The United States is Mexico's top source of foreign direct investment (FDI) with USD 100.9 billion (2019 total per the U.S. Bureau of Economic Analysis), or 39.1 percent of all inflows (stock) to Mexico, according to Mexico's Secretariat of Economy.
Corruption and administrative inefficiency have also been major issues and the business climate continues to suffer from safety risks in the country. According to the Economist Business Environment, Mexico ranks 42 out of the 82 countries reviewed for their investment climate.
Key points. Inflation seems to be slowing, and some things could start to get cheaper in 2023. The cost of real estate, rental, cars, and gas could fall, at least a little. Don't get too excited about potential price drops, as there's still a lot of uncertainty about the economy.
Cybersecurity, IT governance, and data security will be the number one risk in 2023. Ransomware has been a significant threat in 2022, but the nature of cyberattacks is changing. Relatively new hackers now take advantage of sophisticated ransomware as an opportunity.
In 2023, economic activity is projected to stagnate, with rising unemployment and falling inflation. Interest rates are projected to remain high initially and then gradually decrease in the next few years as inflation continues to slow.
The growth profile will show divergence: the Euro area will likely face a mild recession into late 2022/early 2023, while the U.S. is expected to slide into recession in late 2023. In currency markets, further dollar strength is still expected in 2023, but of a lower magnitude and different composition than in 2022.
Nevertheless, agriculture, or the primary sector, plays a crucial role in indirect ways for the Mexican economy. The primary sector has helped in strengthening trade ties with the United States as well as in alleviating poverty and creating jobs. Agriculture provides employment to about 12% of the nation's labor force.
In 2021, from the total national wealth in Mexico, 78.7 percent belonged to the top ten percent group. Meanwhile, the bottom 50 percent had a total of -0.2 percent, which means that, on average, the bottom half has more debts than assets.
The United States was the top foreign investor in Mexico last year, with $15 billion in FDI coming from that country's companies and people. The next biggest investors were Canada, $3.8 billion; Argentina, $2.3 billion; Japan, $1.8 billion; United Kingdom, $1.8 billion; and Spain, $1.6 billion.
Mexico's real estate sector could grow by up to 1% in 2023, and considerably more so in the 10 sub-markets where tourism is dominant. That is according to Gene Towle, executive partner of Softec, a firm that is dedicated to real estate sector research.
The real estate sector in Mexico could have growth of up to 1% in 2023 and the figure could even be much higher in the 10 submarkets where tourism predominates. This is according to Gene Softec, executive partner of Softec, a firm that is dedicated to real estate research.
When buying a home in Mexico, you must pay the Property Acquisition Tax (ISAI). These tax rates differ in each Mexican state. They can range from 2% to 5% of the value of the property.
One of the most common subjects on the issue of costs will undoubtedly be related to property taxes. To be clear, in Mexico, you will be responsible for paying some form of taxes. This is true if you own residential property, rent your property and earn income, or if you sell your property in Mexico.
Mexico: share of households 2020, by housing tenure
In 2020, more than two thirds of all Mexican households owned their houses. Meanwhile, over 17 percent of household lived in rented property. In the first quarter of 2021, Mexicans paid on average 1.3 million Mexican pesos to acquire residential property.
The “Temporary Resident Visa” is recommended for those who choose to own property in México. After four years it can be converted into a “Permanent Resident Visa”. This visa allows you to stay in Mexico for as long as you like without a restriction on foreign travel.
General Information. A visitor visa allows you to stay in Mexico for a period of up to 180 days, provided that you are not carrying out any paid activities.
Holbox Island is the cheapest beach town to live. Which side of Mexico has the best beaches? The Caribbean Coast of Mexico is one of the most renowned beach destinations in the world and certainly the most popular in the country.
They expect home prices to improve in Q3 & Q4 this year, over in 2023 they expect the medium home will delince 5.6% compared to 2022, to $776,600 in 2023 ($822,300 in 2022). They had predicted a median 2023 price of $758,600 forecast last October.
Along those lines, organizations like Fannie Mae and the Mortgage Bankers Association forecast that the average rate on 30-year fixed-rate mortgages will decline throughout 2023, continuing into the first quarter of 2024.
And though May is Taurus's top month, this sun sign will have Jupiter on its side for the rest of the year, making it the luckiest zodiac sign of 2023, along with Aries.
With mortgage rates declining faster than expected, home prices are likely to remain mostly flat throughout 2024. This will be good news for buyers who have been waiting on the sidelines for a good time to enter the market.
Many sellers compare their houses to those in the neighborhood and want to sell them as quickly as others. It's your responsibility to make them understand the real scenario. This is one of the most common problems that real estate markets face.
Will house prices go down in a recession? While the cost of financing a home typically increases when interest rates are on the rise, home prices themselves may actually decline. “Usually, during a recession or periods of higher interest rates, demand slows and values of homes come down,” says Miller.
The cost of capital is used for project evaluation purposes. Under the net present value method, the cost of capital is used as the discount rate to calculate the present value of future cash inflows derived from the real estate project.
“[W]ith the rate of inflation decelerating rates should gently decline over the course of 2023.” Fannie Mae. 30-year fixed rate mortgage will average 6.4% for Q2 2023, according to the May Housing Forecast. National Association of Realtors (NAR).
While it expects the Fed to continue increasing rates to tame inflation, it believes that long-term rates have already peaked. “We expect that 30-year mortgage rates will end 2023 at 5.2%,” the organization noted in its forecast commentary.
Introduction: My name is Rev. Leonie Wyman, I am a colorful, tasty, splendid, fair, witty, gorgeous, splendid person who loves writing and wants to share my knowledge and understanding with you.
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