Mexico is a common vacation destination for its beautiful sandy beaches, the incredible weather and the plethora of tasty foods. It’s full of life and culture, which may lead to many wanting to own property, such as a vacation home, even if they aren’t a citizen of Mexico. Whether it’s for personal use, commercial use or an investment, there are many reasons you may want to invest in some property in Mexico. With some major cities having less restrictive laws inland vs the highly desirable beachfront properties, there are lots of options for one to explore when it comes to investing in property.
It is common place for property to be owned in Mexico, as 80% of residents live in houses that have an owner, meaning it is definitely possible for any non-Mexican citizens to but property. It may not be as simple as pressing “Buy Now”, but it isn’t too complicated either.
With Knightsbridge Foreign Exchange, that process can be made even easier, especially with the best currency exchange rates in Canada.
Mexico’s property market is strong, as the economy continues to grow and property becomes more desirable. In Mexico City, housing prices have approximately doubled from what they were ten years ago, in large part because of the regulations that make even some of the least valuable houses worth about 1.5 million pesos. There is high-demand for property in Mexico, making it great for seller’s, while still providing premier value for buyers as well. They may be expensive, but you’re getting tremendous value, and depending on the city you’re looking at the functionality you need, you can still find great value for your needs.
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The easy answer is yes, foreigners can definitely buy property in Mexico, but there are some restrictions. There is an area known as the restricted zone, which includes land with 100 kilometres of a national border and within 50 kilometres of any ocean.
Outside of the restricted zone, foreigners can just directly buy and own property, without much resistance. However, within the restricted zone you can still buy property, buy you can’t own it directly. Instead, you’ll have to acquire the property through a Mexican corporation or a bank trust. This can be a complicated and time-consuming process, so it may not be worth it for you, but if you’re willing to do it, then there are relatively no restrictions on where you can acquire land in Mexico.
Prices vary across the country, as bigger cities like Mexico City may be more costly, and beachfront properties may cost more than inland property. There are various factors to consider, including city, neighbourhood, size and more!
To start, you’ll want to look for a reputable real estate agent. You can definitely look online, but it can be tough to determine good value, what’s legitimate or not and make good headway on your own. And, real estate agents will have access to a lot of properties you can’t find, using their expertise and connections to find the best property for your needs.
With a realtor, you’ll have the opportunity to negotiate their rate, and have someone you can trust find your great value.
An important thing to consider are scams, as there is definitely the potential to run into them. As a foreigner, you’re more likely to be preyed on with a scam, having less knowledge of the country, the city and the local real estate market. That’s another reason you’ll want a real estate agent, as they can help you find something legitimate and trustworthy.
However, it’s important to make sure your real estate agent is legitimate as well. Make sure to do your research, and get a referral if you can. In Mexico, there are no laws governing training or licensing for realtors, meaning anyone can claim to be an expert and scam you that way. Use your connections and relationships to get a referral to find a realtor you can trust, as that’s the start to a legitimate property purchase.
You can find the most reputable real estate agent out there, but you should still do your own research to get an idea of the housing market in the area you want to buy. It’s always important to have your own knowledge, and it’s important to remember that your real estate agent may look to get you a more expensive property so they can get a larger cut. Knowing the market will allow you to go in with some knowledge, and make the best decision for yourself.
An important step to take when you have interest in a home is to meet the seller directly. While you may trust your real estate agent, it’s always wise to meet the seller directly, get to know them a little and ensure they’re a real person who actually owns the property and really wants to sell.
No matter what country you’re buying property in, you’ll always want to get a home or building inspection to ensure everything is safe and secure. Getting a professional to do an in-depth examination and look for any damage, mould, pests or any other reasons you may not want to purchase the property can help make sure you don’t a bad purchase.
Another thing you’ll want to consider is how they ask for the transaction. You should never mail money, and be weary if they don’t want to meet face to face. However, you can use Knightsbridge Foreign Exchange to transfer the money as well, as we’ll send the money direct to them, providing you with the best Mexican peso exchange rate and keeping full records on all transactions.
The type of property you’ll purchase is largely dependent on the city you’re looking to buy in and which area of the city you’re interested in. In the heart of a major city, the two most likely residential options are townhouses or apartments, as freestanding homes or just open land may be much harder to find. For commercial properties, you may want to look for an office space, storefront or warehouse area.
If you’re looking toward the beach, then you’re more likely to find larger plots of land, villas and more space. You may be able to find apartments as well. If you want a beachfront commercial property, then you may want to re-purpose an apartment or house for an office space; or just buy land and build yourself.
On paper, the steps may be simple for buying a home, but can take time to process. You’ll want to look into a mortgage, but if you want property in a restricted zone then you’ll need to look into a bank trust. Once you have that, choose your real estate agent, find the property you want and make an offer. You’ll need a notary to draw up the contract and ensure it’s legal. Then, finalize the trust or mortgage, sign the appropriate documents and make your payments, including taxes. You can pay with Knightsbridge Foreign Exchange, either using us to directly transfer the funds (and exchange for you), or just using our currency exchange service. We have no hidden fees, no transfer costs and provide the best Mexican peso exchange rates in Canada.
Legally it isn’t too complicated, but you’ll want to make sure everything falls in line with Mexican law. If the property is in the restricted zone, remember the ownership will be ties to a bank in Mexico (or a Mexican business) through a bank trust, and if you’re outside the restricted zone you can have it in your name. Make sure you have English copies of your contracts, and ensure you know all of your rights, restrictions and obligations as a property owner. A good real estate agent will make sure everything is in order, and you can have a lawyer look over everything as well if you need it.
Whether you need a mortgage or bank trust there, any bank that operates in Mexico (including some international banks) can help you get what you need. You don’t need to be a citizen, resident or even have a visa to own property.
While you can make payments from our home country’s bank, there may be extra fees and a high markup added to the exchange rates. Again, that’s where Knightsbridge Foreign Exchange comes in, as we can take care of all payments for you, with no hidden fees, no transfer fees, and the best currency exchange rates. The higher the cost of the property, the more you’ll save with KBFX.
There are a plethora of fees and taxes to consider when buying your property. These include real estate agent fees, notary or lawyer fees, acquisition/land taxes, bank fees, exchange rates, title insurance, and registration fees. All of these can add up and are important to consider before making any fees.
If you’re serious about purchasing property in Mexico as a foreigner, do your due diligence, take your time and consider Knightsbridge Foreign Exchange for your currency exchange and payment needs!
Sources:
http://www.eluniversal.com.mx/english/housing-prices-double-mexico-city
http://www.puntasayulitamexico.com/buying-property-in-the-restricted-zone-in-mexico/
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