Buying property in Mexico has never been easier or offered better return on investment, making right now an ideal time to fulfill lifelong dreams of owning a vacation home close to the best beaches in the world. Investors from around the world are permitted to legally buy property in Mexico, and foreigners also get full protection under the law when it comes to Mexico real estate transactions.
Four tips for buying property in Mexico as a foreigner:
Tip 1: Residency Requirements & Property Ownership
In Mexico, the residency requirements and property ownership rules for foreigners to invest in real estate and/or obtain citizenship are simple and straightforward, intended to encourage people from around the world to come and participate in everything Mexico has to offer.
Do I need to be Mexican citizen to own property?
No! You definitely do not have to be a citizen of Mexico in order to buy property anywhere in the country. In fact, buying real estate in Mexico has never been easier or more straightforward than it is today, and millions of people from all over the world have successfully bought and sold property over the last few decades, often earning incredible return on investment (ROI) in the process. And since you don’t have to be a resident in Mexico to own property here, there is no need to immigrate or even qualify for resident status in order to invest in real estate. Still, it’s important to note that the Mexican Constitution does have certain requirements that apply to foreigners who own land inside the “Restricted Zone” (more on this below). For properties located within the restricted zone, foreign buyers must simply use a bank trust known as a fideicomiso, wherein the bank acts as a trustee by holding the deed for the purchaser, who retains all legal rights of ownership. As with all other real estate transactions in Mexico, those involving properties held in a fideicomiso are governed by federal law.
What and Where is the Restricted Zone in Mexico? According to the Mexican constitution, the Restricted Zone includes property within 64 miles of any international border and within 32 miles of the coast.
Tip 2: Finding a Mexico Real Estate Investment Advisor
Buying a home in a foreign country is one of the biggest financial decisions you’ll ever make, so it's key to find the right person to represent your interests, get the best deal and secure the the highest return on investment. Start by creating a short list of buyer's agents (more on this below) who have extensive experience and are well connected in the area where you are planning to buy real estate in Mexico. Next, look for client testimonials and consider whether or not the agent's website appears professional, with up-to-date, relevant information and easy access to a wide variety of available properties.
What Do Real Estate Consultants Do?
First and foremost, working with an experienced real estate investment advisor should protect you from falling prey to bogus deals. In addition, he or she should be able to answer any questions you might have about owning real estate in Mexico, and they should also be able to guide you thorough every step of the process, from helping you find the perfect property to suit your individual needs, to getting you the best possible price and making sure all of the required paperwork is in order prior to closing.
Do You Really Need a Buyer's Agent?
Working with an experienced buyer's agent is an essential part of buying real estate in Mexico, because they are totally dedicated to getting you the very best price on every transaction. In fact, working with a buyer's agent can result in considerable savings (an average of at least 10 percent), and - perhaps best of all - you never have to pay them a dime for their services, because all of the commissions are paid by the seller!
Generally speaking, it’s always a good idea to work with a trusted real estate investment advisor who can locate the best turnkey vacation rentals, luxury condos and/or standalone villas to suit your unique circumstances. And as we already mentioned, one of the best ways to find a reputable realtor in Mexico is to see what other property owners have to say about their experiences, so be sure to ask for referrals. Using an experienced real estate investment advisor will make the entire process go smoothly and can even give the buyer access to investment properties that are not yet publicly listed, and therefore offer incredible value.
Tip 3. Choosing the Right Property
The most important thing you can do if you're serious about investing in Mexico real estate is make sure you choose the right property to suit your needs, whether that means you need to earn rental income for retirement, or are looking for a private vacation home to enjoy with friends and family.
How to choose the right real estate property?
The best way to find the right type of investment property for your situation is to start by deciding exactly how the property will be used. This is another reason it's so important to work closely with a respected real estate agent you can trust, who knows the area and can help you figure out what kind of returns you will receive, both from appreciation and/or rental income. Of course, finding a great investment property in a fantastic location is just as important as understanding the rules of buying and working with an experienced real estate agent. Look for luxury condos designed to function as turnkey vacation rentals in top destinations if you want to avoid maintenance headaches, collect ongoing investment income and obtain great return on investment. Right now, the Riviera Maya real estate market offers better value than comparable vacation hotspots worldwide, with vacation home rentals beating the stock market and providing amazing annual returns.
5 Tips to Choose the Right Property:
- 1. Decide the purpose of the property: Investment or pleasure?
- 2. Location matters, so look for real estate located in the path of growth.
- 3. Find an experienced local real estate agent you can trust.
- 4. Remember that turnkey condos and vacation homes offer a stress-free experience.
- 5. Come for a visit! You should become acquainted with a property before you buy.
Tip 4: Consider Buying with an IRA Account
Buying real estate with your IRA account is a great way to use retirement savings to earn tax-deferred income and provide a hedge against inflation, as well as essential portfolio diversification and protection from the endless volatility of stocks, bonds and mutual funds.
Can I buy real estate with my IRA?
Yes, you can buy real estate in your IRA, Roth IRA, or other retirement account! To buy an investment property with your IRA, you must set up a self-directed account and any real estate you buy must be used strictly for investment purposes. In addition, purchasing real estate within an IRA account usually requires paying in cash, and if your property generates rental revenue, every bit of it must go right back into your IRA as tax-deferred retirement income. All maintenance and other costs associated with owning the investment property must also be paid by the IRA, and if the property is sold all of the proceeds must be deposited back into the account.
If I buy a property with my IRA, can I live there?
No, you (and most of your relatives) are not permitted live in the property, use it as a vacation home or otherwise personally benefit from real estate that is purchased using your IRA account. However, select developments are able to offer a way for owners use the property - just contact us to see how it works!
Still, it is perfectly legal to buy real estate with an IRA account, provided you follow the Self-Directed IRA rules laid out by the IRS. The benefits of this type of real estate investing include the ability to collect ongoing tax-deferred rental income to support retirement and give your financial portfolio a hedge against inflation at the same time, since real estate rises in value (appreciates) right along with or just ahead of the inflation rate. Income-producing real estate investments also protect your hard-earned assets from ongoing stock market volatility, which analysts expect will continue and increase unchecked periodically with little warning for investors.
Why Haven’t I heard of This Before?
Many investors still don't realize they can invest in real estate using money an IRA retirement account simply because it's harder for banks and stock brokers to make money this way, so most investment advisors will steer you toward stocks, bonds and mutual funds that pay easy commissions instead.
Do you have other questions about Mexico real estate investment? Post them in the comments!
Click the link to download our free guide Buying Safely in Mexico and learn more about smart real estate investment in one of the world’s top destinations!