Life's A Beach When You Retire
Whether retirement is already upon you, or you still have a ways to go before you
give up the work-a-day life, if you are planning to get away from the cold and enjoy your golden years relaxing on the beach, now may be the time to consider investing in a place in the sun.While the U.S. real estate market is in turmoil and investing in property here is sketchy at best, there is a solid investment option that could provide more than monetary rewards. It seems as though the Mexican real estate scene is fairing much better throughout this global recession and many excellent opportunities can be found south of the border as the situation rebounds at a much quicker pace then we are seeing stateside. Areas currently popular amongst investors are Playa del Carmen on the east coast, and Puerto Vallarta on the west coast.
Puerto Vallarta began a development boom early in the 21st century with hopes of cashing in on the retirement plans of baby boomers. Massive condo developments we being bought quicker than they could be built and this sellers market remained strong for a few years. The global recession of 2008 changed the real estate landscape considerably, leaving many of the developments vacant and selling at 30-50% discounts, thus creating the strongest buyers market this region has ever seen.
Playa del Carmen and Tulum are just south of Cancun on the Caribbean side of Mexico, and although they are relatively new tourism destinations compared to Vallarta, these small towns are also very attractive for investors and retirees. Tulum is the most recent area to see a surge in growth and with its new urban growth plan the region is focusing on green and sustainable development. There are currently many options for investors in both of these locations, including condos, houses, and the most popular choice these days; land. Of course the 3 areas mentioned in this article are very popular tourist destinations, so if you are not quite ready for a full time life of leisure, an investment property could be easily rented out making you money until you are prepared to move in full time.
If you would like to join the one million plus US citizens that are permanent residents in Mexico, there are certain nuances you need to be aware of. First of all, the real estate industry is, for the most part, unregulated. Agents and brokers require no special licensing and virtually anyone can set up a real estate business; so make sure you do your homework to find a reputable agent/broker, it can also be very helpful to seek advice from a realtor in the US. Another important issue is the location of the property.
Americans, or any other foreigners, purchasing real estate in Mexico can only obtain direct ownership of the property if it lies outside of the Restricted Zone. The restricted zone is anywhere within 100 kilometers (approx. 62 miles) of any Mexican border, and within 50 kilometers (approx. 31 miles) of any coast line. For properties within the zone, the Mexican government has created something called the fideicomiso (fee-day-e-co-me-so) which roughly translates into real estate trust. This program enables international buyers to enter into an agreement whereby a Mexican bank is designated as a trustee and holds the deed for the property. The beneficiary (the party purchasing the property) maintains all privileges of ownership, such as the right to lease, sell, mortgage or leave the property to heirs. These agreements will run you about $400/yr, are simple to obtain and are granted in easily renewable, 50-year terms. As for property taxes, brace yourself; expect to pay less than $100/yr on a US$200,000 property.
Aside from the great weather and laidback atmosphere, there are plenty of other reasons to make Mexico your retirement home. Cost of living is very cheap, in fact our dollar goes approximately 6 times further, there are excellent, low cost, health care facilities and services are becoming more and more oriented towards retirees.
If you ever had the notion to retire somewhere tropical, now seems to be a great time. So pack your bags and start exploring south of the border to find your perfect beach in the sun.
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