Mexico is an amazing country to buy a vacation home. It’s the ideal place to escape those long sometimes harsh northern winters, build lasting memories and traditions with friends and family and be able to purchase golf course homes, beachfront or colonial properties at very competitive price.
For decades, Mexico has been a top destination for North Americans to spend their holidays or even retire to. Investing in a vacation property can be a cost savings over the years as well as building equity and rental income from rentals when you aren’t using it.
Even though buying a vacation property in Mexico is a safe and secure as buying in Canada or the USA, there are still things you need to look out for. Here is our top 5 mistakes to avoid when buying a vacation property in Mexico
1. Buy on Impulse
After spending a wonderful week in a nice vacation rental in the area, and while chatting with the owner you learn that the same property is for sale. Infatuated with the home, you decide to buy it without evaluating the pros and cons. We like to call the “Margarita Fever”
Why is it a mistake?
Buying a property without learning more about the local real estate market is like marrying the first attractive person you meet on the street; it might have the looks but no soul and you will be stuck in a bad relationship for quite a while.
If you really like the property, ask around find a trustworthy real estate agent and force yourself to see other similar priced properties, visit other areas and learn more about the neighborhood and the complex where the property is located. Try to gather as much information before purchasing your dream home.
2. Buy a Home without activities
You decide to purchase a vacation property but haven’t considered the day to day life around you. The house fits your lifestyle but does the area?
Why is it a mistake?
Buying a house and not considering the area is a mistake. Buying a vacation home is very much like a recipe, you can have almost all the right ingredients but be missing one critical one, like baking soda. Without the baking soda the cake won’t rise, a home purchase is the same way. If you like activity or a particular sport, say golf, but the area you purchase doesn’t offer or foster that activity or sport your purchase is going to disappoint. Make sure the house and your lifestyle all match up into that area.
3. Forgetting or Ignoring Extra Costs
After visiting and researching several properties you feel ready to purchase the house of your dreams. You find the perfect property but it is a bit above your budget. You purchase it anyways.
Why is it a mistake?
Pushing yourself to buy a property above your budget without considering extra expenses can be a headache and cost you a lot of money in the long run. Why not go below your budget and dip your foot into the vacation home market, why jump in with 2 feet. Make sure this product, this area, this country is the right fit for you before going hog wild. You can always upgrade in the future.
Remember that when buying a vacation property there are additional expenses and things that need to be take care of. You might have to pay monthly maintenance fees, insurance, cleaning fees, HOA fees, property taxes, home repairs, hurricane proofing, Fideicomiso fees, etc.
Researching the real costs of these added expenses will let you plan ahead and prepare a real budget that include all of these and extra costs. Another expense you have to consider is rental and property management if you decide to rent the property. But don’t worry, working with a trusted real estate agent and a little bit of planning you will find the right property for you and your family.
You can watch a video on cost comparisons between Florida and Mexico here
4. Buy in a Very Popular Area or Buying in the Middle of Nowhere
Buying a property in the most popular neighborhood, or purchasing a home you love in the middle of nowhere can be tempting. But buying a property on either extreme can be a bad decision in the long run.
Why is it a mistake?
If you go for the most popular neighborhood you might be paying much more for a property that could be bought somewhere else for a cheaper price. Also, popular neighborhoods tend to have bigger crowds and noisy areas. As an owner looking to rent your property you will be competing with a larger amount of real estate options and that could force you to lower the price in order to get clients.
On the other hand purchasing the house of your dreams in the middle of nowhere might get you a better deal in a quieter area, but the commuting to go to the shopping mall or for a nice dinner in the city can be off-putting. Also, people looking to rent a property might not like the long commutes, isolation or lack of services nearby.
5. Buying into a development that hasn’t been developed
The renders look beautiful, the facilities say they will be second to none, the developers say they have all the permits, the price is unbeatable and it will all be completed in 1 year…what could possibly go wrong?
Why is it a mistake?
We all want to get the best price and sometimes buying that undeveloped property offers that savings, but with every savings there is going to be a cost. And with an undeveloped property virtually anything can go sideways and your dreams may be diminished or even lost. Those renders aren’t as advertised, the permits are taking longer or not being granted and all the facilities never get built. Your dreams are shattered
Buying into a development that is already created and built, one that has already taken most of the risks out is a much safer and reliable investment. This is especially important in masterplanned developments with golf courses and other expensive installations. Make sure these are built and running before purchasing a property. The last thing you want is to have a beautiful home and none of the promised infrastructure done.