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Nearly every week, we see another article in the press about gringos buying real estate in Mexico. The most recent one is from the Kansas City Star, reprinted from the Wall Street Journal. It’s about retired and soon-to-be-retired baby boomers buying real estate in the Yucatan and on the Mayan Riviera.
Here are some excerpts:
A big cadre of American baby boomers looking to retire someplace sunny and cheap is fueling a land rush in the Riviera Maya, an idyllic slice of Mexico’s Yucatan Peninsula… But many land-seekers are encountering obstacles, including skyrocketing real estate prices, confusing laws and con artists… The land rush is occurring at the beginning of a demographic tidal wave. With more than 70 million American baby boomers expected to retire in the next two decades, many without adequate pensions or health plans, some experts predict a vast migration to warmer — and cheaper — climates. Often such buyers purchase a property 10 to 15 years before retirement, use it as a vacation home, and then eventually move there for most of the year. Developers increasingly are taking advantage of the trend, building gated communities, condominiums and golf courses…
Mexico, already thought to be home to as many as 1 million American citizens, or roughly a quarter of all U.S. expatriates, is set to get the lion’s share of new arrivals…
No place has boomed in recent years like the state of Quintana Roo in Mexico’s far southeast corner. Anchored by the high-rise resort destination of Cancun at one end and cosmopolitan Playa del Carmen an hour to the south, Quintana Roo is the country’s fastest-growing state, with over a million residents. An estimated 1,500 to 3,000 American citizens live there more than six months out of the year…
If you read the article in its entirety, you’ll see a lot of references to “unscrupulous” deals, “problems”, “obstacles”, “confusing laws” and “con artists”. There’s the developer in Baja California who sold condos built on ejido land and afterwards all the tenents were evicted. There’s a couple near Puerta Vallarta who lost their ocean view when local Mexican developers built a resort between their beach house and the water. There’s a woman near Tulum who put a down payment on ejido land but then disappeared for three years and the seller assumed she was dead, so he reoccupied it. But she wanted it back. Then a dead body showed up on the property.
Lions and tigers and bears, oh my!
It’s true that we are not in Kansas anymore, but like “The Wizard of Oz”, all of the news stories we read seem to reuse the same actors in a rather familiar plot. Act I: Gringos are moving to Mexico in record numbers. Act II: Mexico is a lawless land where it is “not uncommon” for Gringos to be duped, or worse (insert the same two or three examples from above). Act III: Let these cautionary tales serve as a warning. Act IV: Here’s what you need to know to avoid being “victimized” (i.e. “there’s no place like home”).
It never fails to amuse us how the Press relies on fear to sell papers, in this case portraying Mexico as such a dangerous, lawless and corrupt country. We have purchased five properties in Mexico. Four are here in the Yucatan Peninsula and one is in the state of Michoacan. We have many clients who are real estate agents, and through them we are personally aware of scores of real estate transactions among the hundreds conducted here each year. In over four years of living here, we have only heard of one “unscrupulous” deal out of a thousand.
That’s not to say we haven’t met several gringos who were frustrated by the process. Many of these are head-strong, impatient types who bring their own ideas of what the rules should be and don’t take “no” for an answer, even when that’s one word we share with Spanish. Mexico is a different culture that speaks a different language and has different laws arising from a different history. There is much to learn and it is best if you don’t go it alone.
For example, ejido land causes “problems” for those who don’t understand it. The majority of Mexico’s population is native american. They were not killed or herded off to reservations like in the States. During the Mexican revolution, the government took land away from large Haciendas that had aquired it illegally and placed it in trust to the native americans who had lost it. This land is technically owned by the Mexican Government but used by local indigenous communities. In recent years, laws have been enacted that allow the heirs of the original families to whom the land was entrusted to privatize and sell it, but the process can take years as each interested party is tracked down for their signature. If you deal directly with a member of an ejido, he has the right to take a down payment in return for a promisoria, or agreement to sell you his share after it is privatized. He will undoubtedly offer you a great price. You may be tempted. But it is a highly speculative deal because the ejido may never be privatized, at least not in your lifetime. So don’t even think about it, okay?
We have heard of several cases where gringos without a clue try to deal direct and end up stymied or frustrated. In general, they are over confident and trying to find a “better” deal and avoid paying a commission. For most of us, this is not a good idea. Find a good real estate agent who has references. He or she will hook you up with a good Mexican lawyer (called a notaria), and if you need one, an accountant (called a contador). They will help you learn what to expect and how to follow the rules. Then, follow the rules. We also suggest buying through a bank trust (called a fideicomiso). It will ensure you a clear title and it offers some tax advantages, too. Within 50 kilometers of the coast, it is required by law.
What the Kansas City Star says about the real estate boom in Playa del Carmen, Tulum and Cancun is definitely being seen here in Merida as well. We cannot drive down a street for more than three blocks these days in the Historical Center of Merida without seeing at least one major colonial renovation going on. And of course, the people paying for those renovations are gringos, because local Yucatecos with money wouldn’t dream of living in El Centro. Just like in the U.S. 30 years ago, they are moving out to the suburbs, either in gringo-like, ranch-style homes or in gated communities like La Ceiba and the upcoming Yucatan Golf Club or Xcanatun residential communities.
Meridanos are selling the homes of their tias and abuelas to the incoming gringos, who are salivating at the beauty and potential of these old colonial homes. In the U.S. of course, you can’t find these stone-walled, tile-floored homes with high, beamed ceilings and arch-lined corridors for love or money, let alone for the price of a down payment on a tract home in California. And now, even U.S.-based mortgages are becoming available in Mexico, making real estate in this country even more accessible to even more people. More on this later, but if you can’t wait, (caution: shameless self-promotion ahead. 
), try this link.
Despite the somewhat negative tone of most news articles, they often do tell a “rare” success story. The Kansas City Star story goes on to talk about the abandoned mansion of the famous and now deceased drug lord Pablo Escobar, that has been turned into this Amansala Hotel and EcoResort by a resourceful gringa.
So hundreds of gringos every year, maybe thousands, are buying homes in Merida or on the nearby beaches of the Gulf Coast for retirement, vacation rental income and investment. And a few hundred of those are moving down here every year. We have heard recently that over 7,000 gringos live in Merida, a surprising number if you believe the 1,500-3,000 on the Mayan Riviera.
We Working Gringos are just the tip of the Yucatecan gringo iceberg, so to speak. An iceberg that shows no signs of melting, even in this tropical heat!
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this is a great article… thank you for sharing
Yes, another balanced perspective from the WG team! Interesting even for those of us not looking to buy real estate. You’ve got a running theme here: reasonable people who do the work necessary to form reasonable expectations often meet with reasonable success.
Thanks for the vote of confidence, KAT. We do our best.
I am purchasing a beachfront property in Chuburna Puerto. It already has a fideocomiso in place & I have a reputable real estate person working on it for me. However, I read somewhere that I should get something called Encroachment Protection to prevent someone coming in & building something in between my house & the water; which, to me, seems impossible because I am so close to the water. My agent says I don’t need it as my property is so small (80 ft wide & 165 ft deep). What say you?
Here’s what we say. Get a lawyer. Chances are, you are already talking to a lawyer who is doing the work of transferring the fideicomiso. Does this lawyer speak English? If not, find another one you can talk to.
We can highly recommend the law offices of Baqueiro, Puerto y Asociados. Alvaro Jr. speaks good English. You can call them at +52-999-926-6668. The best hours to call are 10 am to 1 pm and 5 pm to 8 pm. This law firm is used by many gringos here in Merida and they can be trusted to tell you the truth and charge fairly. They have saved us from some bad deals, and seen us (and others) through many successful house purchases. They are not the only reputable firm here, but one we can heartily recommend.
When you call, the receptionist does not speak English, but don’t let that discourage you. Just say “Quiero hablar con Alvaro, por favor“. The next question will be “Quien habla?” or “Who is speaking?”. Say your name and she should transfer you or tell you to call back. For some reason, leaving a message doesn’t work well here. They are very busy, so don’t be put off by the brusqueness of the receptionist. She is often juggling four phone calls at a time.
A lawyer will know what you are talking about and should be familiar enough with the area to know whether or not you need the ‘Encroachment Protection’. We have heard of the encroachment issue before, and know this has been a problem in other areas of Mexico. We have not heard of anyone having this sort of problem in the Yucatan.
But we don’t want to be the last word on this. It’s your investment and you should safeguard it. Spending a few dollars for a good lawyer’s advice is well worth the peace of mind.
That’s what we say!
I am interested in hearing more feedback about how to buy, what neighborhood to look at, and more importantly why move to Merida?
For the past ten years I have been dreaming about establishing an art center in Latin America. I am an artist and director of a community-based alternative museum that focuses on participatory public art, arts education and urban renewal. Since I love Mexico, have friends from there, and an interest in Mayan culture, I thought Merida might be an ideal location or you may suggest other Yucatan cities worth investigating.
My hope is to establish a satellite space that would create bridges between American and Latin American culture emphasizing how collaboration and creativity can contribute to the well being of the community.
From the sounds of it, it may be too late in buying something large and affordable like a hotel or hacienda but thought this may be a good place to get information.
I am grateful to get your feedback as I begin to explore Merida and or the greater Yucatan communities.
Jerry, we applaud your initiative to build bridges between our two cultures. Much more useful than walls.
Merida is a big city with many real estate options. While some of the historical properties in the centro have appreciated considerably in the past few years, there are still many homes and buildings that can be purchased for much less than in other large cities in North America.
Merida also has a vibrant and eclectic cultural life, modern infrastructure and a government that is supportive of both development and the protection of Mayan and Yucateco heritage. It also has one of the lowest crime rates of any city its size. Cholul and Izamal are two smaller towns to the east of Merida with a growing creative life as well.
We will continue to add to the articles on this site in hopes of answering more of your questions in detail. Thanks for reading!
WGs
Dear WGs:
I appreciate your suggestions. I will continue to explore this region and when I make plans to visit I will be sure to contact you. By the way, is there any particular art, youth or community organization that specializes in public art, community festivals, youth and artists collaborations between gringos and Mexican people?
Not that we know of, Jerry, but we think its a great idea! Let us know what you find out or what you do in this area… and we’ll do the same.
HELP…..have tried numerous notaries and local lawyers. grateful for name of reputable lawyer to pursue ‘trust’ registration on our behalf.
We have had numerous successful transactions with the lawfirm of Baqueiro, Puerto Y Asociados. Both Enna and her brother Alvaro (junior) speak English. Their father, Alvaro (senior) is a brilliant lawyer and watches over everything. Their phone number is 999-926-6668 or you can reach Enna at ennabaqueiro@meridanotaria55.com
The receptionist does not speak English, but if you just say the name of Enna or Alvaro, she will get you there.
This firm is used by a lot of the local expats and the only complaint we’ve ever heard is that they are very busy. We have never heard any complaints about their honesty or integrity, and our experience with them has been wonderful.
Buena suerte!
Ditto…Alvaro Jr. was great. I was so happy to find out when you recommended him to me that he was, in fact, who my real estate agent was using. He was very professional and helpful. He was thorough and also provided me with a list of documents I would need for my FM3 as well as a very reasonable price to take care of all the details. I will be returning to my house in March and will most certainly be returning to his office. By the way, my real estate agent was Jorge Mazun with Tiera Yucatan. He was the best!!!I was so impressed with how he was constantly looking out for my best interest, communicating with and reassuring me throughout the entire process. He even researched and found an old utility bill that was still owing on the property and required it be satisfied before closing so I did not have to pay it! Not only was he my realtor, but he & his wife have become dear friends who have invited me into their home in Merida & have continued to help me in NUMEROUS ways to this day…way past the commission. How often these days do you find someone like that??? If you want a kind, compassionate & truly dedicated agent, pick him. You won’t be sorry. He has a US phone which is 661-310-7916.
What I would like to see is a map with all of the names of the different “subdivisions” in Merida on it. I saw one somewhere – but can’t find it again. That would make the search for a place to live so much easier!
I found a set of maps that are invaluable to long distance real estate searchers – they are pdf files, so can be saved to your computer for later use. The main index is here: http://www.paguito.com/portal/hemeroteca/index200408020800.html
I didn’t go through all of the maps – but did load the first one on Merida. …zoomed in and it was perfect – every “subdivision” (for newbies) name is right there – along with the names of major streets. This is such a help when reading online real estate ads – or the ads in el Diario.
ENJOY READING YOUR INFORMATIVE ARTICLES. HAVE FOUND A FURNISHED HOME SELLING FOR $80,000. MY QUESTIONS ARE: DO YOU NEED TO SET UP YOUR FIDEICOMISO AND FM3 BEFORE YOU CAN OFFER TO PURCHASE A HOME? IS THERE WIGGLE ROOM ON THE PRICES OF SUCH HOUSES? HOW LONG DOES THIS PROCESS TAKE TO ESTABISH YOUR FIDEICOMISO?
THANKS.
Hola Dianne,
There is always “wiggle room” in a real estate transaction. Offers and counter-offers are quite common here as they are in most places.
You do not need to obtain an FM3 prior to making an offer. In fact, you do not need to obtain an FM3 unless you plan to live in Mexico full-time. You can live here on a tourist visa (FM-T) for up to six months.
The fideicomiso will be established for you during the process of closing on your purchase. If the title on the property is clear and the building is not designated as “historic” and the law firm handling the transaction is not swamped, then this process usually takes less than six weeks. That said, patience is the highest virtue in Mexico.
Several of the real estate web sites on our Links page have more details about buying real estate in Yucatan.
Hi Folks! Just a short note to those who are hesitating. My parents have recently built a home east of Progreso on the beach. Their architect handled everything from the land purchase to handing over the keys. He and his family are dear friends now and I thought I would share his name with the readers:
Carrillo e Peon arqitectos in Merida.
carpe95@gmail.com
Victor Carrillo speaks perfect English too!
Just would like to add, we also have had wonderful help from the folks at TierraYucatan, from Carlos Hassey Esparza specifically. He is friendly, a great communicator, and made sure we got to see every property of interest to us, drove us around for a full day. We are not high rollers, and were curious if we would be directed to more expensive properties rather than what we had researched…but he showed us exactly what we wanted, and even came up with a few others that we otherwise would not have known of. We have put a down payment, and now are in the waiting stage, but so far everything has gone exceptionally smoothly.
Who is a reputable property manager in the Chuburna area? There are many outsiders buying property in the Chelem/Progreso/Chuburna areas but they cannot occupy the property full-time.Who oversees the property for them and what is a reasonable monthly charge for this service? Thank you.
Is is possible to purchase a home in the Merida area when you are not ready to relocate to Mexico for a year? Also are squatters a problem? What can you do do purchase in advance and keep the home free from squatters? Does the law still favor “squatters”? Thank you so much for your reply. Anne
Hola Anne,
Many people purchase property in Merida long before they plan to live here, usually as future retirement homes or as vacation homes.
We’ve not heard of any problems with “squatters”. Many of the homes for sale are either new or recently renovated with nobody living in them or they are old colonial homes that have been abandoned. In fact, we’ve noticed that while some areas of the U.S. have many homeless people, Merida has many people-less homes. That said, we have heard that it is difficult to evict renters under Mexican law.
Merida is a fantastic city, vibrant city and slowly all those abandoned houses are being purchased and renovated. Firstly by Americans and now by other Mexicans who see the value of these historic properties.As for squatters it really isn’t a problem and one needs simply to have a caretaker to check on the property once a week…..the cost in minimal and it provides good piece of mind.
your article is great but i believe it has gotten easier to buy ejido land.
Very informative, especially since I sell real estate in Playa del Carmen, and am continually educating clients about how purchasing real estate in Mexico works for foreigners.
If you still have the article, please email it to me at kltracy@gmail.com
There are warnings by the Arizona state real estate department and the United States State Department about the risks of buying real estate in Mexico. Remember, the “Gringos” already there have a vested interest in getting more company. You drive thier property values up, and they need someone to dump the risky investment onto. I saw good information when researching Baja real estate complaints, and Mexico real estate complaints. That is how I found these addresses:
http://www.re.state.az.us/PUBLIC_INFO/Documents/Consumer_Guide_MEX.pdf
http://travel.state.gov/travel/cis_pa_tw/cis/cis_970.html#real_estate
Copy and paste them into your browser.
It is important to understand the current housing crisis in the U.S. is having a direct impact on the Mexican boom, which has come to a screeching halt, because Americans were pulling home equity out of their homes to buy in Mexico. If you have a house in Mexico it could be years before a qualified buyer can come along.
Without going into much detail, I recently visited Merida. I don’t remember what drew me to the city, but I thought it was time to extract myself from always going to the beach towns.
The first week, I walked around every where and stayed lost. The second week, I fell in love with the city, a three dollar hair cut, and the graciousness of the people both locals and gringos. There is a spiritual air about the city.
Three days before I was to leave, I looked at 20 or so houses. I bought one! My husband has never been to Merida. *chuckle* That was my first trip and I had forgotten my business file on my desk at home, so I was winging it. Chris is going in October. Needless to say, he’s a good sport. For the record, I’ve been looking at real estate property for retirment for 6 years so he knew I *knew.*
I agree with Working Gringa’s comment…fear sells newspapers. I still have people asking me about the banditos & re-telling 20 year old tales: God only knows what the truth was then. But, that’s okay with me because, frankly, I am already feeling territorial and hope those with fear-mongering mentality stay away.
Estoy feliz!
Adios,
Karen
Just a short perspective about buying property in the Yucatan. Firstly we were strongly advised not to buy eijado land by lawyers and friends. We have also used Alvaro Baqueiro as a lawyer and found him to be very good. We have purchased a beach home and beach lot in Telchac Puerto, east of Progreso and put both properties into one trust at Scotiabank inverlat on the Paseo Montejo without any problems. Our experience with buying and owning property in Telchac has been great as we have spent a lot of time and asked a lot of questions about property along the coast. Prices and development along the Gulf coast from Progreso to San Crisanto seems to be changing quickly. If you have any questions about property along the coast, we can try to answer them and you can e-mail us at tiki@sympatico.ca Buenas Suerte Lance
ja ja ja como son las cosas los gringos aconsejando a otros gringos de como comprar propiedades en yucatan y nosotros los yucatecos aconsejando a los mexicanos de como comprar propiedades aqui en estados unidos. I don’t have a problem with that ”feel like home” because really this not my home, ”kansas city kansas”, because one day i will go back where i belong: motul de felipe carrillo puerto en el estado de yucatan, and working gringos i want to thank you for the photos, videos and articles about ”mi querido yucatan”.
Someone here in the U.S. said we should just trade countries. Since all the illegals are coming to the U.S. and the gringos are going to Mexico. We should just trade. Give the United States to the Mexicanos. Give Mexico to the Gringos or U.S. citizens. Ariadna and her familia and amigos, all native Yucatecos are worried about the many outsiders moving to their homeland. They are the middle class of Merida. Has anyone done a survey of local Yucatecos about the influx of gringos and other foreigners to the region? No, not those who stand to make money off of sales of property, but the everyday Yucatecos?
Hello Raketas! I am from the Kansas City Kansas area. It’s where I grew up and lived until moving farther away for work. I hope KCK is a great place for you for now. Maybe we will cross paths in Merida or Motul someday soon. (coincidences never cease to amaze – doesn’t it sometimes seem like there are only a couple dozen people in the world?) (well, you know what I mean).
hello casi yucatecan it’s nice to hear you are from kck i being living here for 9 years i think this is a nice area to live, make decent money and to raise my kids compared to other places like,los angeles .chicago ,new york i got a few more years to go before i move back to yucatan my dream is to build a house by the beach some where in TELCHAC PUERTO only a few miles where i was born (motul) and spend my last years of my life with my people i think america’s biggest problem righ now with the hispanics is called ”RACISM” for this reason i have decided i case IF I DIE HERE to be buried in MOTUL DE FELIPE CARRILO PUERTO ,daniel gallegos i think you got a good point i mean really if you got money you can go to live anywhere in the world ,and casi yucatecan i would to hear more from you and why not maybe one day we will drink a beer together who knows (www.raketas74@yahoo.com)
Does anyone have experience with or an opinion about using a title company such as Stewart Title to handle closing and escrow deposits? Stewart Title seems to have a larger presence in Costa Rica and Riviera Maya where we also looking.
Yes, Working Gringa has just worked with Stewart Title in Playa del Carmen on a closing and found them to be an invaluable resource. We can highly recommend a gentlemen named Gabin Palafox there.
Do you need a FM3 to sell the only house we live in under the Fideicomiso and not pay capital gain tax.
I am looking at purchasing a beach front home near Merida. Have the previous hurricanes created a storm surge that has effected the homes along the coast. I guesss I am one of the many looking for a piece of paridise as I retire.
Thanks in advance.
Moby Grape
Dear Moby,
We know people whose homes were completely wiped out by storm surge in the last big hurricane to hit the Gulf Coast (Isadora in 2002), whose neighbors homes were left untouched. Hurricanes do hit this area… the general word on the street is a big one comes along everyone 14 years or so. When you live on the water, it is one of the risks.
To Alen,
We believe the way to avoid capital gains tax is to have lived in the house for more than two years, as evidenced by two years worth of utility bills in your name. But to be sure, it is best to check with your notario.
How interesting! I can only see the major problem with Americans buying property in Mexico are the other gringo real estate agents in Mexico overcharging the Americans trying to purchase down there. My husband is a Mexican citizen and we are able to purchase property without any problems. We have statred to look in Merida, and if we go directly with the owner, the prices are 20-30% less than working with a real estate agent! I have heard that real estate agents are not controlled in Mexico ( as far as earning percentages go) so buyers beware- it is easier to go to the classifieds or better yet, drive around town and look. I think the real “banditos” here are the gringo real estate agents- not all, but look what happened in Puerto Vallarta- it’s another California!! Happy house hunting!
One can find many ways to get swindled on real estate at home in Gringo land.
This is an excellent article and well written with wit and wisdom.
Being careful, getting good advice, and following the law is a good idea in the U.S. or abroad.
If I bought a tract of land in Mexico, to build on later, and I come back a year later and some local is building on it, do I have the right to knock down the construction if I have all the paperwork saying it’s my land? So far there’s just 2 layers of a brick wall. I want to knock it down before it gets to the point of occupation.
Regarding Mateos request about knocking down the newly started wall.
Did you buy ejido land which means it is community land? if you did, then you probably do not have clear title to the property and that is why they think they can build on it. If it was private property and you have clear title then I would check first with the lawyer that represented you on the purchase and then knock it down. Best advise – check with your lawyer first.
Mateo,
That may be a good question to ask the attorney who handled your land purchase for you. Was your land marked by a surveyor when purchased, so that you are sure of the boundaries, etc? All best handled by someone with the legal knowledge to advise you.
I LOVE this site! It is so informative. I am taking a trip to the Yucatan in mid June to scout out REAL prices for beach properties outside of Merida. The internet research that I have done thus far has left me feeling both very excited, and suspicious of the “these prices are too good to be true” phenomenon.
I am a 40 year old pre-K teacher in Maryland with a passion for technology and art. I am trying to figure out a business plan that I could bring to Merida or the coast that would allow me to reside in the Yucatan for at least 6 months of the year if not longer. My goal: NO MORE WINTERS! Between my MA in early childhood ed, and my tech expertise, I should be able to come up with something.
Question 1: Is it possible to earn substantial rental income from a vacation beach propery(ies) or maybe a house in Merida? What is the rental potential during the low season? I’m afraid that with so much competition, I would not be able to count on any property staying occupied.
Questions 2 & 3 – If I actually found a property on my scouting trip in June, what finances would I need to have to get the purchase process started? Does anyone have a recomendation for a realtor in Merida/Progresso, or would contacting the recomended attorney be the first step?
I must add, that I am NOT looking for one of those over the top upscale americanized properties that you see folks trying to get on House Hunters. I want modest but nice. The ocean view is enough for me.
Having lived in Merida for nearly 8 years , I concluded after a short while that Merida was the best place for me to live. Being an Englishman , and as we know now that London is one of the most expensive places to live, I have bought 3 homes here, my latest in Itzimna being totally Renovated by Alfredo Dorado (Restoration Dorado) and his team of Pros..I am delighted with the progress and style in which Alfredo has personally dealt with this restoration on a daily basis, his team working 6 days a week concludes I am a happy camper. The Yucatecans are wonderfull people,friendly ,unassuming and polite..I am Padrino (Godfather) to the son of one of my staff and am honered to be so…I do hope that ex Pats can enjoy this part of the world and the hospitality that abounds.
[...] April 28, 2008 by Khaki Scott Much is made about the minor inconvenience of buying Mexico real estate within 50 km (about 27 miles) of a Mexican beach or within 100 km (about 62 miles) of a Mexican border, even though the fideicomiso, with the bank holding the physical title, is one of the safest ways to own and manage property. However, any inconvenience of owning property through a fideicomiso is totally insignificant when compared to the risk of unknowingly purchasing ejido land. It is these cases that often make international headlines and fuel rumors that someone’s home was “confiscated” by the Mexican government. Sadly, such situations are ultimately found to be the “fault” of the purchaser and could have easily been avoided by conducting a simple title search through a reputable title company. A full discussion of this situation – and how to avoid it – can be found in Yucatan Living. [...]
Mel
We own beach front property in Telchac Puerto and purchased it from Gabriela Cornelio at casayucatanrealestate.com. She lives in Merida and she and her husband Adam also have a beach front home on the coast near San Bruno. I am sure she can help you find property in the area and also help in finding a good lawyer.
A one time there was no local financing available and had to be purchased by cash, in many cases the baby boomers already had the money or financed it some other way from back home. I understand that now you may be able to finance it locally – check with the real estate agent or the lawyer. Closing costs generally run about $4,000 – 4500.00 for lawyer, fideicomiso and trust fees.
Merida and the coast are terrific, we love the area and wish you well in your home hunting
Good afternoon amigos,
I’m posting from Andalucia where I have a small BnB in a beautiful old house I restored 5 years ago. I previously restored houses in France.I’m looking for a new project and have been doing my due diligence on the Yucatan.
I see that there are a lot of old properties for sale in Merida and at first view the prices seem attractive. But when I compare the asking prices for “restored” against “unrestored” I get the impression that there is little or no margin when you add restoration costs to the price of the unrestored property. I would be investing on a 5 year view and need to feel that the fundamentals of the market are pretty solid.
A further thought is that with so many properties waiting to be restored, prices are unlikely to show much increase in value. I’m guessing that the majority of buyers are from North America but with all the sub prime woes right now this demand has probably dried up. Mexican buyers will have better contacts and doubtless avoid paying the “gringo premium”. I’ve spent a fair bit of time in Brazil and know that there are two prices there! If you are buying to restore, your margin is generally in buying well!
With my previous projects I have run the houses as quality BnB’s before moving onto the next project. There are some lovely looking guest houses in Merida but I would be interested to know what the demand for their rooms is like. Room rates seem very competitive and without a minimum of 60% occupancy I guess you can only expect a “lifestyle” level income.
Finally, does anyone have views on the tourist potential of Progresso. Is this a year round destination for both Mexicans and foreigners?
Hopefully someone out there can answer some of my questions.
Look forward to hearing from you.
Un saludo,
James
Lance,
Thanks for your reply. I have been in touch with Gabriela. She is VERY responsive. I have a good feeling about her. I decided to take equity out of a rental property I have in the states to finance this purchase. It will end up being cheaper in the long run. If I decide later, I can always take money out of the mexico house later.
James Bar,
I too have questions about income potential in a vacation rental. I don’t plan on a B&B just yet, but I would like to know how much rental income I could expect on a beach front property. I know the prices differ greatly between high & low seasons, but how likely is it that I can keep a place rented on a regular basis when I am not in it? I am looking at beach front within 40 minutes from Merida. Anyone have any idea?
Hi James and Mel
Our beach home is in Telchac Puerto which is 40 Kms. from Progreso and about 65 from Merida. Progreso is popular with “Gringos” between Dec. to March but rent fairly cheaply by the month because it is off season for the Mexicans and there are a fair number of properties for rent. High season for the Mexicans is the two weeks at easter and July and Aug. and rent fairly high then. I can provide more info. to specific questions if you would like to e-mail me at tiki@sympatico.ca. The north coast is a great and up and coming area
Buenos todo
I live on a small Spanish Canarian island, and the cost of living here is twice that of where I lived in the UK. We have looked at many places to live, but decided on Mexico, mainly for my 9 years old sons’ sake. He speaks very good Spanish and has got used to the Spanish way (manana, manana) and I think he would settle very well in Mexico and have a much better way of life. We are looking at Motul near Merida, which looks very nice. What I need to know is, are they any GOOD bi-lingual schools there. Although my son speaks good Spanish I do not, and I would like to participate as I did I the UK. My son currently goes to a very small spanish school in a little village, which is only as good as the teachers they have that particuler year. This year is fantastic, last year – well I’d rather not say what I thought of them.
Another question is: Do the teachers of the entire school change every year, as they do in spain? I feel this is a strange rule, but thats the way it is here.
My husband has a good fire department pension so that would cover the visa requirements for us all, but would he be allowed to work in Mexico; he is also an incredibly good builder.
Sorry for so many questions. Thanks in advance for any help
Teri,
Motul is indeed a very nice town, but you will not find any bilingual schools there. In fact, there are few bilingual schools even in Merida. We suggest you look at the article here in Yucatan Living about schools:
http://www.yucatanliving.com/yucatan-survivor/schools-in-merida-yucatan.htm
As far as we know, no, the teachers do not change every year.
There are many builders (called albañiles) here in Merida, and most likely they work for a lot less money than your husband will be willing to. Therefore, it might be hard for him to find work in that field. Getting a visa to work in Mexico is not easy… which is why many of us start our own businesses. There are many opportunities here to contribute.
Thanks Working Gringos, that was most helpful.
You stated that getting a visa to work in Mexico is not easy, and most start up a business – don’t you need a working visa to do that? In Spain all we required was a residencia which is obtainable (in fact you have to get one) after six months.
My husband won’t have to work, but as a ‘workaholic’ I think he’d go mad if he didn’t do some kind of work, paid or not. Is it difficult to self build there? are constructon materials expensive? I know the price of madera (wood) is expensive as it is here, but what about concrete, blocks etc etc? Would he have to get permits to build a house for himself (not commercially, but for our own use) and piscina (pool)? We are thinking about buying land and building a home to our own requirements. Are architects expensive?
Sorry again for all the questions, but I have plowed the internet and can not get any answers.
Many thanks again
Teri,
You can stay here for three months on a tourist visa, or you can get a rentista FM3 visa which allows you to stay for a year. In order to get that, you must prove that you have either a guaranteed income or a certain amount of money in the bank (we think its $12,000 US). If all your husband does is work for himself, that is all he’ll need.
Yes, it’s easy to “self-build” here. Are construction materials expensive? More so than they used to be, but not as high as in the US. They don’t use much wood here at all because a) the best wood (tropical hardwood) is endangered, more difficult to get b) wood doesn’t stand up to termites very well and c) why use wood when there is all this stone and cement everywhere?
If you build within the city, you’ll need permits. We don’t know about outside the city limits.
Are architects expensive? Our architect charged us about $3000 US for plans and permits. And then most architects charge a percentage over and above the costs of building the house. That can range from 10 to 30%, from what we’ve heard.
Check out the entire Real Estate section on this website for a lot of information on building houses here, lists of architects and other information.
http://www.yucatanliving.com/category/real-estate-yucatan
Buena suerte!
Teri, the part that’s a bit confusing on visas is this: If you want to work for a Mexican company, it is very difficult to get a visa because there are so many locals who need work. If you want to invest, starting your own business that will employ locals, then it’s not too hard at all to obtain a visa. “The” FM-3 (category) really includes about 18 different types of visas. And then there is the FMT (tourist) and FM-2, etc.
Bottom line: If your husband is an experienced builder and he could hire local workers to work for him, it is *possible* that he could create an on-going business. Maybe remodeling homes as a contractor/coordinator for foreigners, or maybe just remodel a home or two at a time and put them up for sale. That’s becoming quite the hobby in Merida.
I was fortunate enough to visit the Canary Islands about 20 years ago and it is truly a place of unmatched beauty and unusual history and landscapes. I really enjoyed being able to see Christopher Columbus’ house on Gran Canaria. But, yes, it was expensive, as I guess most island living is…
Best of luck. Maybe we’ll see you in town sometime(?)
[...] Much is made about the minor inconvenience of buying Mexico real estate within 50 km (about 27 miles) of a Mexican beach or within 100 km (about 62 miles) of a Mexican border, even though the fideicomiso, with the bank holding the physical title, is one of the safest ways to own and manage property. However, any inconvenience of owning property through a fideicomiso is totally insignificant when compared to the risk of unknowingly purchasing ejido land. It is these cases that often make international headlines and fuel rumors that someone’s home was “confiscated” by the Mexican government. Sadly, such situations are ultimately found to be the “fault” of the purchaser and could have easily been avoided by conducting a simple title search through a reputable title company. A full discussion of this situation – and how to avoid it – can be found in Yucatan Living. [...]
Hola todo
I have been given very confusing and conflicting information on Banks accounts in Mexico. How can I transfer money to Mexico. I have been told if I transfer over 10000UUSD then I would be slapped with a 26 to 28% tax. Surely this cant be true. I really cant afford to pay that, especially when you have to pay 15% tax on it here. I’ve also been told if I try to bring in more than 10,000usd cash, that it all would be confiscated.
My bank here in spain, requires you to be in branch to sign the tranfer of money advise, I really do not want to travel to Mexico, open an account, travel back,justt o sign a piece of paper!!!,, surely there is another way… Can any one advise
I visited Progresso last year and fell in love with the town and its close proximity to a large city Merida. My husband and myself have been loking at other locations Costa Rica etc but I knew within an hour of arrival that this was the right place for us. We are coming back Augst 1st -4 on a fact finding mission and was looking for some advice on what we should do next. Should we get our fideicomisa first or plan to look at houses and make offers first? I want to go with a reputable real estate service but have heard that if you get one in Merida that they would not be so accomodating if you are not spending big bucks. I am just looking for a small house under 50,000 usd I saw several in January. I am looking for one I can remodel and maybe rent out some. If anyone can give me any advice i would so appreciate it. Also if I could hook up with someone while i am down there that would be even better maybe a consultant etc? Thanks email jcagara@charter.net
Jennifer
Find a good real estate agent who has references. He or she will hook you up with a good Mexican lawyer (called a notaria), and if you need one, an accountant (called a contador). They will help you learn what to expect and how to follow the rules. Then, follow the rules. We also suggest buying through a bank trust (called a fideicomiso). It will ensure you a clear title and it offers some tax advantages, too. Within 50 kilometers of the coast, it is required by law.
Hola, Jennifer…
We suggest you talk with Anny at Casa Blanca Realtors or with Joel at Merida Homes. They are both accustomed to dealing with less expensive homes (they deal with MORE expensive ones, too…but you get the idea). You cannot get a fideicomiso until you have a home to put it in, so don’t worry about that. Also, you might want to take a look at our list here:
http://www.yucatanliving.com/yl-service-listing.pdf
We have listed lawyers, accountants, etc. who all speak English (unless otherwise noted) and who we know to be trustworthy.
Buena suerte!
I recently returned from Merida and I am very excited to have found an old colonial that I would like to purchase. My concern is with the comments made by Mandy Ruiz regarding ex-pats/realtors/investors artificially driving prices up. When I see a listing price, should I discount my offer price by the 30% mark-up? How do I negotiate in this market? I do want to warn those searching to check all real estate listings because one of the relocated U.S. real estate agents who showed me around Merida intentionally did not tell me that the owner had dropped his asking price by $26,000. That agent encouraged me to make an offer matching the unreduced price so she could pocket the difference. Needless to say I found a very honest Mexican-born agent with whom I’m comfortable working but I still don’t want to overpay. I found a different house that I would like to purchase. The listing is not my new agent’s so neither she nor I know the extent of the mark up for the agent’s commission. What do you advise?
In our experience, most of the real estate agents in this town are honest, if a little overworked and not particularly organized. If there is a difference in price, it isn’t the fault of the real estate agents and we seriously doubt it is with the purpose of cheating you. If that real estate agent who you felt was cheating you actually did get you to buy for the higher price, we’re sure she would take the commission (5 to 6% just like in the States) and give the owner the rest. There is a closing, you know. With a lawyer/notario in the room. These things are not easily hidden and we don’t know any local agent that would do such a thing… and we know most of them.
You can and should negotiate in this market like you would in any other. There is no 30% markup. Prices are rising here because more and more baby boomers are buying retirement homes here… plain and simple.
And if you find out you overpaid? Well, that means you must be in the Yucatan! Everyone here competes to show how little they paid for something, and if you haven’t heard someone tell you “Oh, you paid too much!”, then you aren’t in the Yucatan. Get used to it.
Good luck.
Tone: Simply look at different websites for similar houses and compare:
1) Location
2) Size of house – especially # bedrooms & bathrooms
3) Degree of remodeling already done
If you compare similar houses as far as location, size and condition (modern or ancient power and water systems, for example), you’ll see about the right price range for a house. They wouldn’t be listed at those prices, if they weren’t selling at about those prices. There isn’t a huge “rip off the gringo” industry in Merida.
Finally, what is the “right price” for you? If your budget is $100,000 and you find the perfect place that needs no remodeling and they’ll let it go (after negotiation) for $110,000, is that an OK price? If you find one that the seller will let go for $60,000, but you’ve got to spend an $20,000 to $30,000 on remodeling, are you comfortable with that? What is your tolerance level? Those are all questions that you have to answer for yourself.
If you are too terrified of “diving in,” maybe it just isn’t the right time for you. Keep up with websites and newspaper advertisements, visit around the country and buy a place when you feel comfortable. Don’t do what makes you uneasy — it’s just not worth it.
Teri
My wife and I have purchased 3 properties on the coast near Progreso and have had experience in transfering money – yes you can transfer more than 10,000 US with no penalty at all. We have used a local wetern union type of mexican bank which is located near the Gran Plaza in Merida. We have used Fanny at Casa de Intercam. You can e-mail me at tiki@sympatico.ca and I will try to help as best I can. We will be back in Mexico Sept 10 – 30. Lance
We are in the process of buying a new house in Merida. It takes a long time. Your article was helpful in reassuring us that we are doing it correctly. A) good agent, B) good lawyer, C) plenty of patience, D) Cash! We hope to close in 30-45 days (seems to be the magic number…every step is 30-45 days.) We have the house, the power of attorney, down payment, and are just waiting on the trust to be drawn up.
Many people are still purchasing property using the ‘valor catastral’ or appraised price which is considerably lower than the actual purchase price. By doing so you are most likely going to eat a large sum of capital gains tax if you ever intend to sell. Ive also read that while common and to this point Im not sure if penalized, but it is indeed illegal. I was curious if most gringos were purchasing in this manner, and if they were truly aware of why they were paying one price, but showing a much lower price to reduce transaction costs…..but absorbing huge capital gains tax liabilities.
If I understand Atlante’s comment correctly that information is wrong.
First off, the price at purchase is the price agreed to by the buyer and seller.
Next, the Catastro (local property taxing authority) sets the tax value of the house. This value often bears little relationship to the actual sale price, much as “Taxed Value” (for property tax) of a home in the USA often bears little relationship to the actual sales price (depending on your state and local appraisal practices).
The Catastro sets your tax value each year. And you pay property taxes based on that value every year. You do not receive a bill, but you are expected to pay during or before January. It can even be done by Internet: http://www.merida.gob.mx/catastro/
Homeowners who have utilities in their name (water, electricity, telephone) and can show that they’ve lived in the house for two full years are not subject to the huge Capital Gains taxes that Atlante mentions. Good record-keeping is important.
House flippers could be subject to the capital gains taxes, and rightly so. When it isn’t your residence for personal use, but just a business activity to buy, fix (or not) and sell houses, why shouldn’t you pay a fair tax on the profits you have earned?
That, simply put, to paraphrase Oliver Wendall Holmes, is the price we pay for civilization.
hi there, interesting website….thanks..ive been going to baja and mainland for over 40 yrs..retired 6oo miles down the baja on sea of cortez in 2000 and built a house…things went pretty smoothly till i found out the contractor didnt pay the social security for his employees….if you build make sure your contractor gives you reciepts showing he paid the social security…..AFTER the house was built came PROFEPA and another govt agency…oh senor you need permits to bulldoze your land and also an enviornmental report ….i told them that i did not bulldoze the land the ejido owner did before i bought the lot…that didnt matter….had to pay a notario who follows these agencys around $3000 dollars to sort out the fines and get these permits….when i asked the agencys in town where i got my original building permits why they didnt know about PROFEPA (an agency thats been around 20yrs) and their permits..they had no answer….when i asked the PROFEPA agents who scotch taped the fines (paperwork ) to my garage door how much the fines would be they didnt know either…..when i did some research and asked around found that PROFEPA seems to just go to gringo enclaves and starts fining for not having permits…we are all sure we have not seen the last of PROFEPA as they have found a cash cow making up rules as they go along to fine gringos….
Hello, my husband and I purchased or should I say thought we purchased a house on the beach on the riviera maya 3 years ago and have been done by a gringo real estate guy. What a nightmare!!! We are at Mexican lawyer #3 the 2 first ones didn’t do anything for us in court. Lawyer #3 seems to take the same path as the 2 first ones. Anybody out there can give us the name of a GOOD and HONNEST lawyer in Playa del Carmen.
Hello,
Your magazine is great. i found it this morning. My wife and I are seriously thinking of relocating to Merida as soon as we sell our home here in Homestead Florida next year. We have been learning as much as we can about the Yucatan nd buying real estate and have gotten in contact with a couple of Real estate agents hrough the internet. Do you know of any you would recommend? So far we have not been dscouraged by what we have read or seen in pictures. We are also planning a vacation to go see for ourselves. Thanks and keep up the great work!
Maria Luisa and Gil
I am interested in buying a hector in Santa Rosa, Yucatan, Mexico and building a home on said property.
There are many reputable real estate agencies here in Merida that can help you. Among them, the ones that we can recommend from personal experience include:
http://www.tierrayucatan.com
http://www.mexintl.com
http://www.meridahomes.com
http://www.realestateyucatan.com
Jen Lytle, the owner of Tierra Yucatan, lives outside of Merida and is especially skilled at working with owners of land in those remote areas.