There has never been a better time to consider buying investment property for sale in Yucatan, Mexico. Now is the time if you have dreams of owning a vacation home that is close in proximity to some of the best beaches anywhere. Any investor no matter your nationality is legally permitted to purchase property in Mexico. Likewise, foreigners who purchase property get full protection under the local laws as it related to real estate transactions in Mexico.
Here are 4 tips for buying property as a foreigner in Mexico:
- Find a Mexico Real Estate Investment Advisor
- Know Residency Requirements and Property Ownership Requirements
- Choosing the Right Property
- Consider purchasing with an IRA account
Tip 1: Residency Requirements and Property Ownership Requirements
In the country of Mexico, there are simple and straightforward requirements for residency and ownership. This is purposeful to incentivize and encourage global investors to invest their money in Mexico.
Do I Need to Be A Citizen of Mexico To Own Property?
Absolutely not! You do not have to be a citizen to purchase property anywhere in Mexico. Purchasing real estate in Mexico has never been as straightforward as it is right now, and missions of people are taking advantage of the lenient and investor-friendly process to earn significant returns on their investment because of it. Because you do not need citizenship in order to invest or buy property in the country, there is absolutely no need to immigrate to the country nor qualify for residency in order to invest. It is, however, important to note that the Mexican Constitution does indeed have various restrictions that apply to foreigners who own land within a specific “Restricted Zone” in the country. For any property that is located within this zone, foreign investors must use a bank trust that is known as a fideicomiso. This is a trust that has the bank act as a trustee by effectively holding the deed for the buyer who subsequently retains all ownership and legal rights. As it relates to all of the other real estate transactions that occur within the country, those that involve properties that are held in fideicomiso are governed by Federal law.
Where and What Is the Restricted Zone?
The designated Restricted Zone includes any and all property within a 64-mile radius of any international border and that is within 32 miles of the coast according to the constitution of Mexico.
Tip 2: Finding A Local Advisor
Buying a home or property in a foreign country is likely to be one of the most significant financial decisions you will make in your lifetime. Therefore, you want to be certain that you are looking for and identifying a good person to represent your financial interests to help you secure the best deal and score the largest return on your investment. You can begin this process by putting together a shortlist of agents who have a requisite amount of experience and who have the local connections throughout the area where you are looking to purchase a property. From there, you want to look for testimonials from clients and even check out their website to see if it looks professional enough.
What Can A Real Estate Consultant Do?
By finding and working along with someone who is experienced in real estate investment, it will help you avoid common pitfalls that a first-time investor might be vulnerable to falling for. For instance, they can help you avoid falling prey to fake deals. Along with this, he or she can help answer any specific questions that you might have about buying property or owning real estate in the country. They will also be able to effectively help you navigate through the various steps of the process involved with finding the right property that meets your needs, getting you the best price, and even ensuring that you get all of the pertinent paperwork completed before closing.
Do You Actually Need A Buyer’s Agent?
Finding yourself and working along with a buyer’s agent who is experienced is one of the best ways to ensure that you are able to get the best deal on your transaction. They will be looking out for your best interests and working with one can help you achieve a significant amount of savings that averages out to around 10 percent. This is due to the fact that the commissions are actually paid out by the seller instead of the buyer.
In general, it is always going to be beneficial to work alongside a trusted and reputable investment advisor who is capable of navigating the local market, locating the best turnkey vacation rentals, and anything else that can suit your specific circumstances. As mentioned previously, one of the single best ways to identify the right Realtor in Mexico is by seeing what other property owners and investors have said about their own experiences which is why asking for referrals is so important. By using a professional and experienced investment advisor, you will be able to make the entire process go a lot smoother from start to finish and it will even help give the buyer access to various prospective properties that aren’t even publicly listed.
Tip 3: Choosing the Right Property
The most significant thing that is going to impact your ability to make a good investment decision is choosing the right property. That way, you can find the property that is going to suit your specific needs whether it means looking for one that can max out your rental income or one that you can enjoy as a vacation home.
How to Choose the Right Property?
The best way to put yourself in the best position to choose the right type of investment property for your specific situation is by understanding how you will be using your investment property in the first place. This is why it is so crucial to work alongside a professional and respected agent because they will be able to identify the area, relay to you the best options available, and help you figure out what kind of returns you could expect. Finding one that offers an ideal location is going to be as important as understanding the local laws and rules of buying. If you are looking to avoid maintenance headaches, you should be looking for vacation rentals in some of the more sought-after destinations. Currently, the Merida Yucatan real estate market is one of the better investment hot-spots because it offers a much better overall value than some of the comparable vacation hot-spots throughout the globe. Here you will find a lot of vacation home rentals outpacing the returns you could anticipate getting from the stock market.
Five Tips for Choosing the Right Property:
- Figure out the purpose of buying the property: Will it be for investing or pleasure?
- Know that location does indeed matter. Therefore, you want to look for a location that is about to experience growth.
- Identify and hire an experienced local real estate expert that you can trust.
- Know that turnkey vacation homes and condos can present a much less stressful investment option.
- Visit the area and the property prior to purchasing it.
Tip 4: Consider Purchasing It with An IRA Account
Purchasing this type of real estate with your IRA account savings is one of the best ways to put your retirement savings to use. It can earn you tax-deferred income and allow you to hedge against inflation. Likewise, it can even help you diversify your portfolio and provide you with adequate protection against the volatility you can expect with other investment vehicles like stocks.
Can I Purchase Real Estate Property with My IRA?
Yes, you will be able to purchase real estate with any retirement account you may have. In order to do so, you will need to set up a self-directed account, and all of the real estates that you purchase needs to be utilized for strict investment purposes. Along with this, purchasing real estate with a retirement account is typically going to require you to purchase it in cash. Likewise, if the property you purchase provides you with revenue from rentals, you must put all of the revenue back into your IRA as retirement income that will be tax-deferred. All of the associated costs with your rental property including maintenance costs and other related costs will need to be paid for by the IRA and if you sell the property everything that you get from it would need to go directly back into your account.
If I Purchase Property with My IRA, Will I Be Able to Live There?
The answer is no. Neither you nor a lot of your relatives would be able to live in the property you purchase with it. You cannot use it as a vacation home nor personally benefit from it in any way. That being said, some developments can offer unique ways for owners to effectively use the property, simply contact us to see how this can work.
That being said, as you can tell, it is legal to purchase real estate with your retirement accounts. As long as you follow the rules laid out by the IRS with the Self-Directed IRA template. Using this method of payment comes with various benefits. For one, you have the ability to collect reoccurring tax-deferred rental income in order to boost your retirement and provide a boost to your financial portfolio. Likewise, it can help you hedge against inflation since your property is likely to appreciate along with the inflation rate or even ahead of it in a lot of cases. Likewise, having real estate investments that are producing rental income can help you protect your assets from suffering from normal stock market fluctuations which are only expected to continue in the future.
Why Haven’t I Heard About This Previously?
A lot of even educated investors do not know about investing in real estate with retirement accounts because a lot of banks and stockbrokers cannot directly benefit from it. Therefore, a lot of advisors will not even tell you about this option and they would rather steer you towards investing in stocks, bonds, and even mutual funds as a means to get easy commissions.