Today, millions of foreigners own their dream home in Mexico. And, millions more are moving into Mexico in the next year, as the economic and political factors weigh heavily on them. We know this because the realtors are quite busy showing homes to foreigners and they expect to close on a record number of sales in the near future.
The Mexican property ownership laws changed in 1992, and now allow foreigners to own property in Mexico in their name. The only restrictions are properties that is on or near the beach and near (within 12.5 miles) of the border with the United States.
If you are seeking to own beachfront property, you must place the property into a bank trust (a “fidecomiso”) that is entirely safe and accepted in Mexico. In fact in many ways this is preferable because the transfer of this kind of legal structure is much less difficult in some cases that owning the property as a physical person. Some owners choose this as the legal vehicle for homes that are not near the beach because of its convenience and flexibility. You should be aware that the bank will charge an annual fee for their services to hold the trust in their name.
If you are a US Citizen, you should also be aware that if the property is in your name, that the US government will hold you responsible for capital gains, should you sell the property at a later date. You should check with a US tax attorney for the best advice.
Rates in Your Favor
In the last decade, the MXN/USD rate jumped from 0.0997 to 0.0538, which means that a home that sold for $1m a decade ago can be purchased for almost half that today. That makes home buying and investing in general in Mexico a great deal for those with capital.
At the current rate, you can purchase five fairly new homes in nice neighborhoods for what you can sell a home in Austin, Texas. You can live in one and rent the other four out for residual income. Or, you may want to sell that home in Austin and buy one very large mansion with a swimming pool and separate quarters for the hired help. Another way to look at it is that the median home price in Austin today is $334,758, while the median home price in say, Cuernavaca, is approximately $66,785.14 USD.
And what kind of home can you purchase for $66,785.14 USD? The home in this photo is currently priced at $66,000 USD.
Type: Single House
Area construction: 1,614 sf
Levels: 2 floors
Kitchen: Fully equipped
Reservoir Volume: 10000
Garage for 2 cars
Of course, if you spend a bit more you can get a lot more home for those few dollars, as there is a cap on buyers are willing to pay in the current market. Cuernavaca has the highest percentage of homes priced over $1m in Mexico and the largest number of millionaires outside of Mexico City. But, that is not to say that there are some wonderful homes available in any price range.
Buying Property in Mexico
Purchasing your dream home in Mexico is quite easy, as your real estate agent will handle all the details on your behalf. Unlike in the USA, real estate agents in Mexico are not licensed, and it is important to use the services of a reliable real estate agent to handle the details of the sale.
As with any major investment, you will want to assure that you deal with an experienced professional real estate agent that can answer all of your questions in a forthright manner. For a list of the most reliable real estate agents in Cuernavaca, see our Real Estate Agent Listings on this site.
You will also require the services of an attorney, which the real estate agent will recommend. The attorney will take care of the legal details of assuring that the title of the property is free and clear, that the taxes are paid up, how you will hold the property title, and registering the sale with the city and state.
The Steps in Bullet Points
Home ownership is an easy 12 step process that can take anywhere from a week to 3 months at the most.
- Locate a realtor
- Visit Cuernavaca for tours of the properties
- Meet with the owners of the chosen property
- Have a reputable attorney do a proper title search on the property
- Arrange for a home inspection by a reputable company
- Place a 10% non-refundable deposit with the owner to hold the property
- Arrange for the transfer of remaining funds and closing within 30 days
- Visit the attorney’s office with the real estate agent and owner to close
- Sign the papers and make the funds available to the owner
- Visit the land office with the realtor to transfer tax records to your name
- Visit the utility companies to transfer billing to your name
- Move in
How Language Plays into Home Ownership
You should know that all contracts are written in Spanish, and the laws require an aloud reading by the attorney at the closing. If you do not speak Spanish, you will want someone to translate the reading for you. Most real estate agents in Mexico speak Spanish and English quite well. For other languages you may want to hire a translator in your language for an hour to perform the task. There are translators in Cuernavaca who speak many different languages well, and your real estate agent can assist you with hiring an inexpensive translator to be at the closing.
While it is possible to live in Cuernavaca without having to learn Spanish, you’ll have a better lifestyle if you do. Language is the key to a country’s culture, so if you want to understand the people, you have to understand the language. There are many Spanish Language schools in Cuernavaca, where you can attend classes on your own schedule to learn the language.
Safety in Mexico
For many USA citizens the number one question when considering visiting or moving to Mexico is, “Is Mexico safe?” The short answer is yes! In fact, according to the published violent crime statistics, you are 4.6 times more likely to be the victim of a violent crime in Austin, Texas than in Cuernavaca, Mexico.
The US Embassy in Mexico City gives a standard, world-wide State Department warning to American travelers: Use common sense. Don’t wander around at night in unlighted areas. Don’t wear flashy jewelry. Don’t accept a ride from persons you don’t know. Don’t flash large sums of cash. Don’t use an ATM at night in a deserted area. If someone attempts to mug you, give them your wallet, watch or whatever they want in order to get out of the situation.
Once a month, (or by appointment) we offer a relocation service for English speaking individuals who are considering moving to Cuernavaca. We will meet you at your hotel and escort you on a tour of the city. You will also meet with a real estate agent, an attorney, and a banker who will give you information and answer your questions.
If you have additional questions, which many people do, please go to our contact page and fill out the form, someone will contact you!