Buying a Second Home in Mexico: 5 Mistakes to Avoid
For decades, Mexico has been one of the top destinations North Americans go to spend their holidays or retire. The temperate weather is great for escaping cold winters. The people are warm and friendly and the food… amazing! Many visitors to Mexico fall in love with the country. They make beautiful memories and create lasting friendships. Through these new roots, the question of property ownership can arise. Can we continue to live a vacation-like lifestyle? Can foreigners buy real estate in Mexico? The answer to both is yes! There is a tremendous opportunity with real estate in Mexico of being able to buy or build your dream home or investment property at an affordable price. This makes Mexico one of the best places in the world to own a vacation home. With definite advantages of creating a profitable return, the options are endless. The two largest are that owning your own home can save you thousands of dollars on your vacations and by buying a second home in Mexico, you can rent it out when you are not using it to students and families creating a revenue stream. There is even easy financing for foreigners available through the help of our partners.
Even though buying a second home in Mexico can be a smart investment, there are still a few things you should consider before taking the plunge.
1. Impulse Buying
It’s not unusual for people to come to Mexico and fall in love with the home they are renting. Then, they are thrilled to find out that the home of their dreams is up for sale. Without weighing the pros and cons, or making a proper budget, they blindly jump in and make an offer to purchase the home.
Before you do this, ask a reputable real estate agent to show you similar homes in this and other areas. Ask as many questions as you can about the homes, the area, and any other questions that may come to mind. Learn as much as you can before you purchase your dream home.
By doing your research and giving more thought to buying a home in Mexico, you may realize the initial home wasn’t the dream you first thought. You may like one of the other properties you were shown more, or you may realize that you’re not ready to commit at this time.
2. Buying in an Area you are Unfamiliar With
With real estate in Mexico, there is more to a property than just the home itself. The location, area, and neighborhood all need to be given some consideration. Purchasing a property without considering the surrounding area can give you many sleepless nights – figuratively and literally!
With the rising popularity of real estate websites, more and more people are buying homes and lots sight unseen without meeting the neighbors or exploring the area. Sometimes a seemingly perfect neighborhood will have a quirk that may conflict with your lifestyle. For example, properties in the town center often have parking restrictions. Your home might be too far from shops or schools. You may find yourself nestled between two loud clubs or party houses, making it impossible to sleep, etc. Just reading stories from people living in the area can almost give you the insight you need to decide whether this location fits your needs.
3. The Budgeting Conundrum
So, after you’ve done your research, have seen a few properties, and visited some interesting neighborhoods, you find your perfect dream home. Unfortunately, it’s a little above your budget, but you decide ‘Why not?’ and buy it anyway. Well, this is why not.
Without a proper budget, you may find you cannot keep up with the maintenance or taxes. There may be HOA fees, insurance, cleaning costs, garden maintenance, property taxes, and home repairs to consider. When you add them all up, these expenses can end up costing more money than initially planned.
Budgeting for these added expenses will give you a real insight into the future. Be sure to prepare a realistic budget that includes all of these with a bit of padding for unforeseen extra costs. If you decide to rent out your home, you can also expect to pay property management fees and income tax.
4. The Two Extremes: From Extremely Popular to Totally Desolate
For some, when purchasing real estate in Mexico, a home in a hopping neighborhood can be tempting but others may be drawn to a quiet, remote area. In the long run, buying a home in either one of these extremes can be a serious mistake. Property in popular neighborhoods can cost way more than a similar home elsewhere. Trendy neighborhoods will attract bigger crowds and will also be noisier. Would a home here make a good investment property? Perhaps not. In these areas, you will be competing with many other options, which could force you to slash your rental rates so you can no longer meet your expenses.
Buying a quiet home in the middle of nowhere might get you a nice home at a better price in a much quieter neighborhood. However, it would mean having to drive to go shopping or for a nice dinner. Renters may not appreciate the isolation or the drive.
5. Your Long-Term Goals and What They Mean for You
You buy that second home in Mexico and your new, beautiful condo on the beach. But, you find that with your busy schedule, you have no time to visit it.
Owning a vacation property is a costly investment no matter where you purchase it. Your long-term goals and plans with your real estate in Mexico are just as important, if not more so, than short-term plans. Think about how you plan to use your property. Will it be a regular vacation destination? Will you rent it out when you are not using it? Do you plan to retire there?
These are some of the most important questions you need to ask yourself and your family. Your real estate agent can help guide you toward making a property investment that is right for you, your family, and your budget.
A real estate agent that knows the area well is the best source of information you can get. They can provide you with details about the homes themselves as well as the area they are located in. An agent will work hard to provide you with a home that fits all your needs, and wants, and is in a location that’s perfect for you.
MexHome Is With You Every Step Of The Way
The MexHome promise is simple. We make it our job to know all the local ins and outs enabling us to stretch your dollar. We are experts because of our immense experience. With our know-how buying your next dream home or investment property is hassle-free. Our real estate agents are with you every step of the way and do not stop until the key to your new slice of heaven is in your hand. Buying and owning property in Mexico is a step in a new and exciting lifestyle. We are excited to start the process with you and can not wait to show you the upscale real estate in Mexico. Let’s talk in person about the fantastic investment opportunities for a vacation home in Mexico.