What to Know Before Investing In Mexican Real Estate

For many people who have traveled and vacationed in Mexico frequently, the idea of owning some prime real estate along the Mexican coast or in one of the picturesque colonial hillside villas has grown from a passing fancy to a definite plan. Yet for those in the process of planning this sort of extensive financial venture, you may want to consider the following. In fact, think twice about your decision: you may make the deal of a lifetime, oryou wish you'd never become involved.

There are a number of relevant points to consider well before making a final decision. Though it may be obvious, it remains important enough to mention on the outset that one should invest a significant amount of time studying and analyzing the situation and its impact on your life--particularly your pocketbook--before even spending one cent investing in Mexican real estate. In other words, get to know the terrain, its problems and advantages; you will be living here at least part of the time if it is a second residence. You should work hard to understand the area, the people and the real estate values. You will be able to make clearer decisions and will learn whether the place you have chosen is worth the planned expense. Don’t let adequate knowledge of property values pass you by; it could determine much in the future if you desire to resale. Don’t do all of this alone. Get the assistance of someone who speaks and reads Spanish fluently so that you don't miss legal nuances and idioms. Even if you possess experience buying and selling real estate in the United States, doing so in Mexico can be a totally new experience.

Not having enough knowledge about the real estate you are interested in can lead to a number of complications. Zoning restrictions, for example, may not be apparent in commercial and residential neighborhoods, but certain areas may have building codes to preserve colonial look and feel of the town. Also, private land ownership may be barred in forested areas, natural protected areas, reserves, and other environmentally protected areas, so when searching for property be vary careful to note any and all information about the location.Besides direct property considerations, if dealing with a real estate agent in Mexico, you should be aware of the fact that literally any one can sell real estate. There are no license laws regulating real estate brokerage and sales or state sponsored departments in charge of the regulation of such matters. This being the case, you should exercise caution while searching for a reputable and established real estate company.

Once the question of property has been answered and you’ve found just the right location you will, of course, have to deal with the money side of things. Many would suggest about financing unless you have some sort of stateside property available to help pay for your venture. In former times, the lack of capital markets and high interest rates forced most foreign-purchased real estate purchases to be made in cash, an option not always viable for some buyers. But as the Mexican economy opened up, new sources of financing have become available including the aid of certain American banking in obtaining loans for Mexican real estate purchase.

Unlike stateside real estate transactions, closing costs borne by the buyer are considerably greater in Mexico.

This should be noted and preparations should be carefully considered when you begin to deal with this aspect of your Mexican venture.

Obviously, with such legal differences existent between U.S. and Mexican real estate practices, it is crucial to obtain and receive competent legal counsel. Expertise in relevant areas is a mandatory consideration as well as verifiable credentials. Planning is the key to successfully navigating the waters of buying Mexican real estate. Thus warned, you should feel free to go ahead and enjoy the rewards of Mexican property ownership. The real reward will be found in the significantly lower property taxes and utility bills each month.