Buying property vs renting for longer term stays

[MMM]

USD $6,000/month anywhere in the world is expensive! In Mexico?

My sister is a bigger princess than I. This is on the west coast of Mexico, oceanfront with 3 BR in what is basically a gated expat community.

 

[Dogbowl]

My sister is a bigger princess than I. This is on the west coast of Mexico, oceanfront with 3 BR in what is basically a gated expat community.

I would like to retire like that. Better spend more time and effort on LottoMax.

 

[Dave Dillehay]

Yep, $6000 per month doesn't seem reasonable unless it is a waterfront palace.

dave

 

[ccannon707]

I know, I've had that dream. But realize it will only happen if I win the Lottery Deepsea21 covered it. I posted this a year ago in response to a "Buy in Tulum?" question.

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. 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 unexpectedly 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'd have 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-pat owners in the area. But first, come down for a few months, RENT & stay awhile... and then see if this is for you.

 

[flyboy08]

Winner winner number seven!

 

[MMM]

I agree with pretty much everything else you wrote. However, the following point is not my experience. We leave a couple of fans on and one or two windows open. And our cleaning ladies come every two weeks to open the place up and let air in. Works like a charm.

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.

 

[robd]

We were just there is Dec and looked closely at doing this. The one thing I do not see anyone talking about is that financing is not avlb like in the USA. It's a cash only transaction, just FYI

 

[mstevens]

We were just there is Dec and looked closely at doing this. The one thing I do not see anyone talking about is that financing is not avlb like in the USA. It's a cash only transaction, just FYI

It's definitely not like in the US, but there are various forms of financing available, including mortgages. These aren't limited to condo developments, but that's where you run into them the most.

For the most part, you're correct that these are cash transactions. For many who own property in the US, re-mortgaging a property, getting a second mortgage, or getting a home equity loan is a way of getting the cash for a property purchase in Mexico, and that makes any mortgage interest incurred for buying something in Mexico tax-deductible on US income taxes.

 

[Dave Dillehay]

You are right on, mstevens. I did that by getting a mortgage on our US home and using it to finance a home for my partner Memo Mendoza. Interest rate was 3.14% vs 12% in Mexico. My US bank also keeps track of balances, etc.

Dave Dillehay
Aldora Divers

 

[robd]

It's definitely not like in the US, but there are various forms of financing available, including mortgages. These aren't limited to condo developments, but that's where you run into them the most.

For the most part, you're correct that these are cash transactions. For many who own property in the US, re-mortgaging a property, getting a second mortgage, or getting a home equity loan is a way of getting the cash for a property purchase in Mexico, and that makes any mortgage interest incurred for buying something in Mexico tax-deductible on US income taxes.