As the sales of luxury properties in Mexico increase, the ways in which a U.S. citizen can acquire their condominium or own home, can be achieved via security deposit or a registered certificate in the USA to get your tropical paradise by the sea. The question is: how is the process? To answer these questions, we talk with real estate owners and brokers. This was what they told us.
Steve Nim of California recently purchased a property at the stunning beachside resort Vivo, in Puerto Escondido. “I was looking for an authentic Mexico experience rather than a part of Mexico designed for tourists,” he said. “Puerto Escondido offered me that, and Vivo offered me all the comforts of home that were within my budget. I now have a home with an ocean view.”
Tracy Hamilton, Owner Relations & Sales Manager at Vivo Resorts & Residences, says they’ve more than doubled their sales over the last couple of years.
“People who buy property in Mexico rather than rent have the benefit of using their property anytime,” she said. “Plus, beachfront property tends to appreciate, so it’s an asset that’s going to be more valuable over time.” The uptick in sales is a trend Vanessa Fukunaga has noticed as well. She’s owner, President and CEO of Engel & Völkers Snell Real Estate in Los Cabos.
“We purchased the brokerage in 2012 and have seen a steady increase in the number of people buying homes,” said Fukunaga. “Our average sale price is $2.4 million. For that price, you can get a 3,500 square foot, 4-bedroom house. There are some developments with amenities to no end, such as beach clubs and golf courses.”
For anyone with qualms about purchasing land on foreign soil, Fukunaga is able to quell those fears. She’s purchased several properties herself in Los Cabos.
“The properties are purchased with a U.S.-based escrow or title, so there’s no chance of losing the home,” said Fukunaga. “If you’re thinking of investing, Los Cabos is the perfect destination. There are golf courses, whale watching, surfing, paddle boarding. You can live at any level you want.”
At Vivo, the properties are beachside, so there are different legal hoops to jump through.
“For example, Vivo Resorts lies in a ‘restricted zone’, which is any area of land that falls within 100km of any national border and 50km off the coast. The law states that no foreigner can purchase land with a direct title in this zone,” said Hamilton. “So, if an American wants to purchase land on the beach, they have to either form a Mexican corporation, use a Fideocomiso (bank trust), or use a corporate trust.”
Using a bank trust is by far the most popular way to secure a home in Mexico. While the bank is the legal owner of the property, the beneficiary keeps ownership rights and responsibilities. The trust lasts for 50 years, and then can be renewed.
Owner Steve Nim said one reason he liked purchasing at Vivo is the resort’s guidance and help in purchasing.
“The developer of the property did his homework and made the process very simple,” said Nim. “Paperwork was straightforward, but of course done slightly differently due to being in Mexico.”
If you’re thinking about buying property in Mexico, it’s important to do your research and go through a trusted broker or property. Also, be aware of pollution and water issues in the area you’re looking at. Other than that, have fun! There are so many people out there enjoying their Mexican vacation home. ■