Dateline: Bangkok, Thailand
For as long as anyone can remember, a major political issue in the United States has been immigration from Mexico. In what ways should it be allowed? How secure should the borders be? Should those already here be granted amnesty?
But as high taxes and an uncompetitive business environment hamper economic growth, and as government agencies such as the NSA continue their unprecedented surveillance of the “Land of the Free’s” own citizens, it’s unsurprising that some people find it less restrictive on the other side of the border.
As one of Latin America’s largest countries by population and geographic size, there is a wide variety of lifestyles to choose from in Mexico. Whether its beaches, mountains, or a city, anyone should easily be able to find a property that they either like personally or can find someone who does, to rent out to.
A booming real estate market is even more of an incentive. On average, rental yields are around twice as high in Mexico as they are in the U.S. This is even as your typical price for a new house hovers at around one-eighth the price.
Yes, there are cases in which prices are 80% lower.
Prices are going up rather quickly in Mexico peso terms. Even during the entirety of the global financial crisis of the last decade, prices haven’t had a single year of decline and have steadily increased by around 60% on average since 2004.
But in US Dollar terms, things are just slightly less impressive. The Mexican peso has lost around 40% of its value against the greenback in the same timeframe, proving itself to be the weakest currency in continental North America. Inflation also remains high and at an unhealthy level.
Everywhere has problems and Mexico isn’t without them, but it remains a country with higher economic growth, lower real estate prices, less taxes, and more freedom in many ways than its neighbor to the North.
Residency is also very easy to obtain in Mexico. Just by proving that you have “sufficient funds”, you can apply for a temporary resident permit lasting up to four years. The process is bureaucratic but straightforward in terms of approval.
Owning a house or condo helps, of course, for proving that you have the necessary finances, but is definitely not required.
After being a temporary resident for four years you can then apply for permanent residence, and afterward even become a Mexican citizen through naturalization.
It’s not a bad way to obtain a second passport.
Locations to buy real estate in Mexico
Mexico is a large country with about half the population of the United States and about 1/5th that of Europe so, naturally, there are a lot of different places to buy real estate — many more than what can be covered in a single article.
For those wanting to learn more about real estate in Mexico, our real estate e-book has a large amount of information about not only Mexico, but all property all around the world.
That said, the nation’s capital, Mexico City, is also the largest city in the Americas. Going between each of its neighborhoods, it quickly becomes apparent that many of them are so unique that it would be easy to think you’re in a different city.
Santa Fe, for example, is one of the most modern neighborhoods in the country. Several large multinational companies have relocated here and the district is home to no less than three universities. A youthful and educated population keeps growth strong.
On the other end of the spectrum, San Angel is one of Mexico City’s more historic neighborhoods. The area was once a retreat for Spanish nobility, and many old buildings and colonial-era homes remain to this day.
The most prime area with the most expensive real estate is definitely the area around Chapultepec Park, which is the closest thing Mexico City has to Central Park. Because the area is very near entertainment, dining options, and a large number of multinational offices, prices are at a premium and rental yields remain high.
For anyone who can afford it, a two-bedroom condo with a park view will have some of Mexico City’s highest rental yields at 7.5% or higher.
Outside of the capital, other popular locations for buying real estate include Guadalajara — Mexico’s second-largest city and one of its more livable — along with resort destinations such as Los Cabos and Puerto Vallarta.
How to Buy Real Estate in Mexico
Restrictions on foreign property ownership in Mexico are rather light for the most part, but non-locals are still prohibited from buying landed property within 100 kilometers of international borders, and 50 kilometers from the sea.
However, there’s a simple and legally-sound way to circumvent this in order to get a desirable beach property. Through buying real estate with a fideicomiso, which is essentially a bank trust, the chosen bank is technically the owner but the purchaser keeps all his legal rights and gives none away, including the ability to live in, buy, sell, or rent out the property.
Other than that, the process of buying property in Mexico is likely similar to wherever you’re from.
Real estates are commonly used, and while there is, of course, a language barrier if you don’t speak Spanish, many of them are able to help you with translations and legal processes.
For anyone looking to diversify their assets into international real estate, Mexico is an inexpensive, fast-growing, vibrant country with both personal and economic freedom.