Buying Land in Mexico

[ajhcmaj]

Any help is appreciated.

I am a 35 year old person. I am looking down the road when I am 55 and retired. We love the opportunity to travel but would love to own a beachfront or oceanfront property. Problem is, price. I dont want to spend 400K plus in the US (plus yearly taxes), or 300k plus in Mexico.

So I am trying to find some off the beaten path places that havent been developed, maybe 1 hours drive from a airport in Mexico. I want to be able to spend 1-2 months 1-2 times a year relaxing, etc.

I came across this place about 45 minutes from Mazatlan. I am not advertising, just any feedback is appreciated. The lots appear to be about 35k (that is for the oceanfront ones), and then worry about building in a few years. Cons are only 2 houses built out of about 100 lots. Also these dont do title insurance for some reason.

http://oceanfrontlotsmexico.com/


Anyone know of other inexpensive beachfront/oceanfront lots that are under 50k.

 

[CatLovers]

I PM'd you.

 

[spirits]

I wonder about the downfalls also

A few years ago my father passed away just as my son was ready to strike out on his own. I convinced him to buy grandpa's house and since house prices have almost doubled since then he is sitting very nice financially. My younger son won't be so lucky However since he is easily able to finance his house with a few roommates he has decided to purchase oceanfront property similar to yours in Nicaragua. I have many qualms about purchasing property for the long term in what is essentially a third world. Their laws are very different from ours and are suceptable to change more quickly than ours. I would be extremely careful and be willing to live with the loss in case it occurs. However as wise as I am all my concerns went over his head. He deals with delinquent accounts with a major company and is confident he has done his due diligence. I and let him know he can always rent out his basement for the next 30 years in case this gamble goes sour. My parents rented out their basement for many years and if it was good enough for them it will be good enough for my son. Talking about full circle?

 

[JEFF H]

You need to be very careful when buying beachfront property in Mexico or other foreign countries. be prepared for the possibility that you could lose your investment if things go bad.
Years ago I had friends who purchased a beachfront condo in san carlos,MX
The local San carlos govener latter claimed their was a problem with the ownership and evicted everyone from the complex. He had the area military inforce the eviction.
I had been under the impression property ownership conditions had improved in Mexico over the last few years.
Then the other day I was reading that the same type of thing my friends went thru years ago may be currently happening in the Tulum area.
http://news.aol.com/story/_a/mexico...ulum-beach/n20080710180309990004?ecid=RSS0001

 

[e.bram]

And they accuse me of bashing Mexico?
JeffH: don't dare post this in the Mexico BB
I'm getting hate Email.

 

[Liz Wolf-Spada]

I receive a magazine called International Living and they have lots of information in email as well as the magazine on this idea. You might want to check it out.
Liz

 

[CatLovers]

You need to be very careful when buying beachfront property in Mexico or other foreign countries. be prepared for the possibility that you could lose your investment if things go bad.

Everyone needs to make their own decision about living in Mexico and the possibility of losing their investment. I, for one, am not inclined to extrapolate exceptions into vast generalities when making my decision. The key is, as in all financial transactions, to do your due diligence. Do your research, evaluate the information, get a trustworthy Mexican lawyer to represent your interests when making a purchase ... you get the idea!

The truth is that over 1 million American and Canadian expats presently live in Mexico (in fact, Mexico has the largest population of Americans living abroad) so unless all one million of them are idiots, my take is that the risk of expropriation is minimal. If Mexico were to go the expropriation route, the financial implications to them would be catastrophic. They won't. I am not losing any sleep waiting for the unlikely to happen! But ... while I wait, I get to visit and live in a beachfront paradise that is real, affordable, and warm!

 

[CatLovers]

I receive a magazine called International Living and they have lots of information in email as well as the magazine on this idea. You might want to check it out.
Liz

In fact, International Living also publishes Mexico Insider which is a GREAT source of information on visiting, living and retiring in Mexico.

 

[Blondie]

I thought non citizens cound not own beach front here??

 

[bizaro86]

Also these dont do title insurance for some reason.

I would try and find out WHY I couldn't get title insurance before I paid up. If the insurance company doesn't think you'd have clear title, they might have a reason.

Michael

 

[CatLovers]

I thought non citizens cound not own beach front here??

You can, but through a fideicomiso (or trust). You own 99% of the trust and the trust owns the property. Plus, the trust has to be renewed every fifty years. It's actually a little bit more complicated than that, but this is the basic premise. The necessity for a trust is why it is critical to have a good lawyer helping you with a purchase.

Btw, a fideicomiso is only necessary for property that is within 50 km of the ocean. Inland properties can be owned with clear deed.

 

[Sheryl]

DH & I visited Roatan, Honduras--a Bay Island just north of the mainland, this past March. Today, it looks like what other Caribbean islands must have looked like 30-some years ago. It's very pristine--especially the eastern half--but there is a construction boom going on for sure. The government, and the Bay Islanders, are committed to putting Roatan on the tourism map; a second harbor is under construction as more & more ships add this port of call to their roster. I admit to mixed feelings toward all this development; hate to "pave over paradise," but it's already boosting the economy as tourism takes root. Prices have escalated over the past 5 years; my guess is they're going to continue skyward.

 

[DeniseM]

And they accuse me of bashing Mexico?
JeffH: don't dare post this in the Mexico BB
I'm getting hate Email.

I don't see ANY bashing in Jeff's post - I see a factual account of a specific situation...far different than "bashing."

 

[Passepartout]

I thought non citizens cound not own beach front here??

Unless the rules have changed recently, This is true- to a point. Iirc the deal is that non-Mexican citizens could not own property within (again iirc) 100 km- about 62 miles from an ocean beach. The work around has been to develop a relationship with a Mexican bank, set up a trust with same as 'owner' in fact of the property, leased back to the foreigner for 99 years renewable.

I casually looked into this several years ago and chickened out over this and other legalities- like lack of title insurance availability. Again, foreigner ownership may be better controlled and accepted than it was 15-20 years ago when I fantasized living out my days on a golden shore, under swaying palms with attendants catering to my every whim on a Social Security income.

Ain't fantasy wonderful?

Oops, I just read #11. I stand corrected. My numbers were off by half.

Jim Ricks

 

[easyrider]

We were offered undeveloped beach front property for $15,000 a lot 60 minutes north of Acapulco but decided to buy timeshares instead. My cousin has bought a two bed ocean front condo with garage for year round use 90 minutes south of PV that they use maybe 4 -5 months a year. It gets to hot down there for us to want to live there year round.

 

[PStreet1]

Having owned property (2 condos now) in Baja for about 10 years and having watched the building process as several people I know attempted it, I really recommend buying something that is already finished. The rule of thumb that we've been told time and time again is "Buy what you see; if you're satisfied if there's never any more than that, it's a good buy. If you later get the things that were promised, that's a bonus. Don't buy expecting building to proceed in any way, shape or form as it does in the U.S." Lots of observation has convinced us of the wisdom of the statement.

You definitely need a good lawyer, not so much for the trust as for the clear title on the land. The ejidos own, or at least claim, a great deal of land. Often people, even developers, believe they have purchased from the legitimate owner and the transaction is complete. They continue to believe that and build--and sell to Americans. Then, the ejido begins its claim--or an old owner surfaces that had the land grant in the 1800's. The law suits can easily take 10 years. You need a good lawyer to sort through all the claims. The chances are excellent that if a bank trust has been issued on one house in the development, or one condo in the development, all the land is clear.

The lack of title insurance is not the problem that Americans assume it is. Now that title insurance companies are coming into Mexico, Mexicans often laugh at Americans who buy the insurance because the whole process is covered in the Mexican process, and the title company won't certify anything that you can't find out is totally clear for yourself.
1. You make the offer and give a small earnest check.
2. The lawyer begins the process of dealing with the contract.
3. The entire document the lawyer prepares has to be scrutinized by
a notario (very different from a notary in the U.S.) The notario is
sort of a land judge. It is his duty to certify everything about the land.
Once the notario has scrutinized the claims and certified the land as
clear, you can count on its being clear.
4. At that point, seller, any real estate agents involved, the lawyer, the
notario, and the buyer sit at the table and the deal is finished. All
money is exchanged in that room at the same time. Before the deal ever
goes to the notario, the lawyer has checked all the land for himself. He
won't send the deal on if he finds problems. At that point everything
comes to a halt and you get your earnest money back. If the deal goes
on to the notario, he'll go back through all the lawyer's work and verify
everything again, plus looking for anything the lawyer might have missed.
If the notario doesn't certify the land, the deal is off. You'll get your
earnest money back, and everyone walks away.

American title companies here won't certify anything that a notario hasn't already certified at least one property in the development/building/etc. In other words, they are taking no chances, and they are making a lot of money. No wonder Mexicans find our title companies (which usually say in the small print "acting from the U.S. in an advisory capacity only") amusing.

 

[taffy19]

I receive a magazine called International Living and they have lots of information in email as well as the magazine on this idea. You might want to check it out.
Liz

My DH enjoys that magazine and reads it from cover to cover. We own a little condo in Nuevo Vallarta but you need a trust when you are on or close to the beach. The trust was much more expensive than we bargained for plus you have yearly trust fees. Make sure you get all the facts before you buy and have an attorney check the contract. There are attorneys in the USA who have a license in Mexico too and are bilingual.

You are buying land so that may be different but if you buy a brand new home or condo and it has a view, make sure that no view will be blocked later because of a neighboring property that isn't built yet but may be built in the future.

 

[PStreet1]

deleted--duplicate post

 

[Carol C]

I would try and find out WHY I couldn't get title insurance before I paid up. If the insurance company doesn't think you'd have clear title, they might have a reason.

Michael

You will not get title insurance in Mexico because you do NOT own the land. You merely have a legal right (akin to ownership, but not quite) to use it for a specified time, usually 50 years. It is held in trust in a bank, and you must pay fees to set up that trust and annual fees to maintain it. It's pricey. Google this word to learn about the trust system for "owning" ocean and border-front land in Mexico: "fideicomiso". The MX Constitution would have to be amended/changed for this reality to change.

P.S. Also if you do decide to purchase land in MX via the bank trust, make sure it is not "ejido" land (Indian natives have unique rights to certain parcels of land in Mexico). It would be smart to consult a Mexican real estate attorney ("notario") and ask the right questions. Good luck to ya!

 

[shek]

Mexico

Just a warning If they do not have the title Do Not Buy!!!

There is a COMPANY called Stewart Title they are also in Mexico .

If you purchase from a seller with a promise to give you the title when he gets it Do not trust them! Take it from me I have gone through this.
Only buy if they already have the title!

 

[PStreet1]

We've owned in Mexico (Baja) for 10 years now. The reason for the trust ownership goes back to an old law for defending the coasts and borders of the country. If you aren't buying on the coast, you can, in fact, own directly.

The trust was the Mexican way to get around the law without changing the constitution. The trust is authorized to act only on your orders and only in your behalf. They are for 50 years and can be renewed. At first I thought that was a drawback; then I realized how old my children will be in 50 years--and the earliest trusts, which were for less time, maybe 25 years, have, in fact been renewed as they have expired.

The Mexicans laugh at Americans and title insurance. It has been available in Mexico for only a very short time. The reasons they didn't use title insurance are quite logical when you understand the system that was in place.
1. It is the notario's job to certify that the title to the land is free and clear. If it is not, the purchase cannot go through. The notario is a very skilled land attorney and it is a position of great trust and responsibility. Where we are in Rosarito Beach, they were very proud when they got their own notario.
2. Until recently, almost all purchases in Mexico were cash, paid in full (financing was exhorbitant and was for only 7 years). When the offer was made on a property, a small amount was paid down, and on the day of the sale, all parties meet with the notario. He certifies the title as free and clear and records the details of the transaction to be filed in Mexico City. The money then changes hands; everything is done at the same time. Then the trust can be completed and registered in Mexico City.
3. American title companies are not, in fact, licensed in Mexico; they work in an "advisory capacity" only. They do not certify property that a notario has not certified; therefore, there is no risk to them (or the buyer). Basically, they duplicate what the notario does by coming along after him and saying the title insurance will operate in this purchase. I've known of buildings of condos in our area where buyers could not get title insurance; that's because the company already knew the notario had refused to certify units in the building.

If buying from an American, the American should have a trust; if he does not (and many don't because they simply didn't bother to get one), the land may not, in fact, have a clear title. A Mexican national can own the land without a trust, of course, but he should have a title document from the notario showing clear title.

In the U.S., no one would even consider buying land without clear title; for some peculiar reason, as soon as Americans go south of the border, buying land/house/condo and assuming there is a clear title seems to be o.k.

As to buying in an unfinished project.....the rule of thumb is "buy what you see." If you like it enough, as it is, to buy, that's great. If the promises never materialize, and you still like it, that's fine. If you won't be happy if the amenities aren't all actually there, wait until you see them. I have two sets of friends who have been waiting for nearly 5 years for "their" buildings to be finished.

You also need to know that in Mexico, it is typical for the developer to build with your money. It is not held in escrow. You pay whatever the first payment is and the project begins; you pay more, and it continues, etc. If the developer goes broke, you will have a problem because the money you supplied has been used to get the building to whatever stage it is in at the time. If he goes broke, there will be leins against the property, and those will have to be paid before anyone considers your rights to the property, your funds, etc.

We are very happy with both our properties in Mexico, but familiarize yourself with the Mexican laws. They definitely have laws, but they aren't the same as laws in the U.S. Think of yourself as an alien, because you are, and recognize that their system was not set up to comply with what you believe it should be.

 

[Ted]

I have been to Mazatlan for the month of March for the past 2 years. My wife and I rented a condo from a freind (here in Vancouver) that bought a condo in a tennis complex (Las Gaviotas Raquets Club) for the first year. We rented a different condo from the owner of the complex for a lower rare for the second year. We could buy a condo at Las Gaviotas but will not because we can rent so easily there. We originally thought that we would be returning each year for longer periods (4 to 6 months), but have decided to rent a condo in Ixtapa because other freinds have bought there and we can either rent from them or be referred to other condos by these freinds. I have been a member of a Yahoo Chat Forum called Mazinfo for the past couple of years. Many of the participsnts are Canadians and Americans who live in Mazatlan each year for monts at a time ( 6 months often). I learn a great deal from this forum of people who are very helpful with advice. I have become very confident with the idea of buying in Mexico because of this forum. The advice given here on Tug about waterfront, trusts, notarios, lawyers, buying pre constrction etc. is excellent and I learned this also from Mazinfo. I am 65 and my wife is a little younger so my perception re buying vs. renting is obviously different from the 35 year old planning for retirement at 55. Although we love Mazatlan very much, we have decided to perhaps rent in Ixtapa in 2010 for a few months. Again because of freinds here in Vancouver who have bought there. We will not buy real estate now in Mexico because we prefer the flexibilty of renting in different places. Maybe Europe or Asia. We now still own a TS in Cabo (sold our TS in Waikiki last year) but we would even rent rather than buy another TS for the same reasons. Flexibility and low rental rates. I understand that there are other Chat Forums like Mazinfo for many other locations of Mexico. I am sticking with the Lounge of Tug and Mazinfo for now. Both sites are fantastic because of the generous sharing of their particiapants. I hope my participation has helped.
Ted Wilson
Vancouver, Canada

 

[CatLovers]

You will not get title insurance in Mexico because you do NOT own the land. You merely have a legal right (akin to ownership, but not quite) to use it for a specified time, usually 50 years. It is held in trust in a bank, and you must pay fees to set up that trust and annual fees to maintain it. It's pricey.

Just to clarify. You can OWN land that is not within 50 km of the ocean. You will receive title to the property. Only property that is "ocean-front" i.e. within 50 km of the ocean has to be acquired through a trust.

As PStreet1 has explained very clearly and succinctly in two posts in this thread, title insurance is really not required in Mexico IF you hire a reputable lawyer who works with a notario. A notario in Mexico is NOT THE SAME AS A NOTARY PUBLIC IN THE U.S. OR CANADA; notarios have far greater status and powers in Mexico.

Also to clarify Carol C's comment about the trust set-up and annual fees being pricey. It all depends on what you call pricey. For us, in the large scheme of things it is not expensive at all because of how inexpensive so many other things are, such as electricity, water, property taxes, cost of living, etc.

Again, I understand that living is Mexico is not for everybody. I must say though that as Canadians who hate the cold (yeah, I know, what are we doing in Canada?), we love having our beachfront Mexico home available for us any time we want to go there, and certainly once we retire, we plan to be there for about 5 months (guess which ones) of the year. Mexico's warm, affordable and friendly. What's not to like? But then, I kinda like having it to myself !

 

[mamiecarter]

Consider Other Countries

Costa Rica has many US residents, good health care and you can safely drink the water. Prices are higher. Turkey also has lots of forighners, many Germans, who live thei ein retirement. The Mediteranian area of Turkey is used to Western residents and you will be warmly recieved.

However you might just rent a vacation house. Less hassel. No long term commitment. Not that expensive.

 

[Ted]

The most importamt thing that I did not mention. Rent and stay in the location before buying to really know if the location is for you. You can also learn all about buying in that location from others who have done it.
Ted