6 Things to Know Before Buying a Second Home in Mexico

 

Among the smartest investments, one can make, buying a second home is a strategy that promises both personal and financial rewards. Without the need of having to be a real estate expert, a majority of buyers find the process surprisingly easy, especially when you’re working with the right Realtor.

For those looking to buy their second home in Mexico, you can rest assured knowing you’re making an investment that will serve to diversify your income, build wealth, plan for retirement, and as an added bonus, take a vacation at no added cost. It’s important to match your investment with what you value most, and here is some insight to consider as you search for your perfect oasis in Mexico.

It’s easy to become enamored with the idea of finding your perfect home in Mexico and living a lifestyle you’ve always dreamed about, but before diving in, it’s important to understand how significant it is to work with an experienced real estate professional to help you navigate the process.

Much like you would rely on the experience and expertise of a real estate agent when buying a home domestically, expect the same when looking to purchase a home internationally. Investing in Mexico’s real estate can open opportunities, but there may be hurdles that emerge that will require the skill set of a trusted Realtor.

Some of these hurdles may include a better understanding of Mexico’s laws, eligibility for buying a certain property, ownership rights, currency, and even navigating language barriers. As with any investment, consider the significance of working with trusted advisors who look to help you make an informed decision.

US lenders don’t finance foreign property, so understanding the rules foreign lenders use when evaluating noncitizen mortgage applications is important. Options for lending solutions will depend on the purpose of your purchase.

For residential or recreational purposes, some of the most widely used methods for investing in foreign property include cash, foreign lenders, or developer loans. As an investment to diversify a portfolio, options include Self-Directed IRA or country-sponsored programs.

Your Realtor and other financial advisors will help guide you to make the best decision based on your circumstances and what you intend to get out of your second home. The ability to entertain a variety of ways as a buyer lends to the reality that buying a second home in Mexico isn’t as complicated as many may believe.

The ability to experience life through the lens of an explorer or adventurer is at the heart of why so many choose to invest in properties located in certain locales. Mexico, and its many regions, including jaw-dropping Los Cabos, provide ideal backdrops to live out dreams, enjoy a relaxed lifestyle, and create enduring memories.

While the natural landscapes are a significant benefit to owning a home in Mexico, the financial benefits are just as appealing. Consider annual property taxes, for instance. Taxes on properties are considerably less than what you can expect to pay in the U.S.

Additional perks aside from world-class beaches and rich culture is Mexico’s lower cost of living. The ability to enjoy a more sustainable and serene pace of life, including walking to town, and other destinations, lends to healthier lifestyles.

From an investment standpoint buying property across markets that are appreciating is a smart strategy. It’s estimated in the last four years, from 2018 to 2021, the average home price in Mexico appreciated at a rate of 39%.

At the southernmost tip of the Baja California peninsula, Los Cabos has been an enduring destination for thrill-seekers, adventure travelers, and beach lovers. Home to luxury resorts, world-class restaurants, amenities, and exclusivity to some of the most beautiful environments and settings around the world, it's no wonder Los Cabos has become such a highly desirable place to call home.

Regions like Los Cabo and other popular destinations are also undergoing upgraded and improved infrastructure, representing a market to consider investing with low-risk and high reward. Improvements like these lead to smart investment strategies as a location becomes more accessible and valuable. 

Buying property in Mexico requires planning, and especially if you plan to rent your home out, it’s important to keep in mind there will be costs associated with maintaining your home when you’re away. As part of your planning strategy, always create a budget for repairs, labor, and maintenance.

Your real estate professional will help guide you when looking to identify the right persons for the job. Expect these recurring costs to be an added value for owning a second home and not having to face uncertainty when you’re away from your home in Mexico.

Outline the priorities of the lifestyle you expect to enjoy when owning a second home in Mexico, and if considering a place like Los Cabos will lend to experiencing pursuits that are important to you. For instance, if you plan on buying the home to enjoy downtime and are a cyclist, does life in Los Cabos afford you areas to enjoy this hobby? If you’re an avid fisherman or enjoy boating, will the home you’re interested in buying include storage or near a marina?

The ability to go out and explore the community is important to make an informed decision about whether the home will meet your needs. It’s essential to know the local real estate market, as well, especially as you consider the cash-only market. Your real estate agent will help you learn about what your money will buy you in Mexico and help you re-evaluate your priorities to get the most from your budget.

Contact Goldsmith Group today.