Buying Property in Tulum - Advice Needed

[Jax]

First of all, as a non-citizen, you don't own crap within 100km of the border. You get a lease and it is held in trust for you. At the government whim, you don't have a lease anymore. Therefore, anything you "buy", know that you can loose.

I 'own' two months of condos in Mexico.

 

[driftwood]

The biggest problem in buying RE in Mexico is that there is no title insurance like we are used to in the US. I have seen challenges to ownership in Cabo san Lucas (Cabo Hills) where a friend bought a unit. Many times these challenges are out right extortion attempts but that doesn't help a foreign owner in the legal system. In addition, there are a lot of times where a developer bought land with a title defect.

If you are going to buy property in Mexico it is critical to get the right RE agent and attorney. My personal choice would be Rob and Michele Kinnon out of PDC,

Playa Del Carmen Real Estate BuyPlaya Advisors

That being said, not a chance I would buy RE in Mexico.

 

[ccannon707]

First off I would ask other people who own at the condo you are considering what are the upsides and downsides of that particular property. Though I don't own, I know people who do, mainly in Cozumel. The gist of their experiences:

1, You always have to come up with the total price to buy - no loans unless there is owner financing.
2. No title insurance (mentioned above). Find a reputable Realtor & a LAWYER. Get references.
3. Don't count on paying your mortgage from rentals.
4. Upkeep can be a real $$ pit - things rust, break and mold in the tropics, quickly.
5. Electricity is horrendously expensive. A friend who leaves her condo in the summer has to keep the AC on so things don't mold.
6. If you need to sell, don't count on selling fast. There are properties that have been for sale for years...
7. A friend who comes to this area for 4 months of the year & inherited money considered buying. "The Dream" , right? After looking at properties & crunching the numbers she realized she could come for the next 20 years, rent the nicest villa possible and spend a fraction of the money she would spend buying. And she had none of the maintenance costs.
8. Hurricanes happen here.
9. Do you speak Spanish?
10. If you have the disposable $ to invest, see yourself visiting a lot, or retiring here it can be a good thing. Obviously there are ex-pats in the area. But first, come down for a few months, RENT, and see if this is for you.

 

[katzgar]

it is common for suppliers to come after condo owners when the developer fails to pay his suppliers off. Tulum beach is ejido or indian land and there is sometimes several "owners" for the same land. every so often a judge is bought to to reassign the deed. the federales show up and put your stuff in the street. The town was homesteaded but many couldnt prove up the homestead and left. Others came in and squatted so really cant give any sort of title. JAX is correct you wont own the land. Anyone that wants to PM you about mexican real estate has an agenda he doesnt want experienced people to see...beware. I might consider a condo thats a few years old and after I talk to several residents about how good their experience has been.

 

[katzgar]

Also, had to come back to this: You honestly don't think the US is corrupt?

trying to compare the US to Mexico is just plain nuts.

 

[orm]

First off I would ask other people who own at the condo you are considering what are the upsides and downsides of that particular property. Though I don't own, I know people who do, mainly in Cozumel. The gist of their experiences:

1, You always have to come up with the total price to buy - no loans unless there is owner financing.
2. No title insurance (mentioned above). Find a reputable Realtor & a LAWYER. Get references.
3. Don't count on paying your mortgage from rentals.
4. Upkeep can be a real $$ pit - things rust, break and mold in the tropics, quickly.
5. Electricity is horrendously expensive. A friend who leaves her condo in the summer has to keep the AC on so things don't mold.
6. If you need to sell, don't count on selling fast. There are properties that have been for sale for years...
7. A friend who comes to this area for 4 months of the year & inherited money considered buying. "The Dream" , right? After looking at properties & crunching the numbers she realized she could come for the next 20 years, rent the nicest villa possible and spend a fraction of the money she would spend buying. And she had none of the maintenance costs.
8. Hurricanes happen here.
9. Do you speak Spanish?
10. If you have the disposable $ to invest, see yourself visiting a lot, or retiring here it can be a good thing. Obviously there are ex-pats in the area. But first, come down for a few months, RENT, and see if this is for you.

This is good, sound advice. Especially on the upkeep.

Although my eyes water thinking about the CFE bill that would power AC that's on all the time.

We have a couple of properties here and in the one we live in, I can just keep the AC on in one room for maybe 10 days in the month and the bill is coming to nearly 200 US $ a month.

But over the summer period, it's so wet and humid here, your walls start turning green if you don't have people in and AC on or air movement.


But this is just one of many problems you will face owning here. Really, do think about it.

 

[Augustus]

So, I'm considering buying a condo in Tulum. The idea would be to find a local management company and then renting it out via AirBNB or similar sites the vast majority of the time, but having a home base for 3-4 weeks per year.

Anyone have any advice doing something like this? As far as I can tell, return on rent during the high season should more than cover yearly mortgage payments.

I plan on doing a LOT more research and even have a meeting lined up with some people that own a property just like this, but thought I'd ask around here as well, just in case anyone had anything relevant to add.

Thanks in advance!

I have not read through all the previous replies. But I can answer as someone who has purchased a condo in Mexico and used it as rental property (sold now). If you are only going to use it as a home base for 3-4 weeks DO NOT BUY. Whatever sweet talk the seller is giving you about rental property is likely total BS. You are going to have condo fees, utility bills etc. Find out what it costs for basic maintance (including condo fees). Take that figure and try and decide how often you would need to rent it to cover your costs. Don't expect you are going to have folks lining up to rent. Finally you need to be aware that if you purchase a condo with a fidi and then rent it you maybe breaking the law in Mexico. Many people buy property and rent it out but do not pay Mexican taxes. So far you can get away with this but that may change.
If you want more PM.

 

[Sometimes]

I just wanted to thank everyone for their replies. I've decided against buying a condo in Tulum at this time. While hypothetically amazing, people here and elsewhere have convinced me it is more risk than reward.

Thanks to everyone that responded!

 

[Jayfarmlaw]

We have looked into Cozumel as a retirement possibility and have considered the same thing. First, unless you are citizen, property must be owned through a Mexican corporation or a trust administered by a Mexican bank. That does not necessarily scare me, but it adds expense to the property. There are several attorneys that are recommended on this site that I am sure can walk you through it.

We have rental property and good renters make it extremely worthwhile, bad renters......can trash your property , cost you thousands, and you are 2000 miles away and it take a flight to get there to check on your property yourself. My experience in rental property tells me to make the home as "renter proof" as possible and for the most part, Cozumel hotel rooms have that down to a science. A good property manager can handle the rest, for a fee of course, and a healthy deposit can protect some your investment. I know that there are several real estate agents with websites devoted to property ownership in Mexico and can guide you through the process. That is where I would start. Make sure you discuss the process not only with your real estate agent, but with your Mexican attorney as well. The hidden costs always scare me.

Good luck on your quest, I share the same dream. With oil and cattle prices down, mine is on hold for a bit.

Jay