Mexican Real Estate Q&A

Mexican Real Estate Q&A – Fideicomiso

Foreigners who are interested in purchasing Mexican real estate should continue to read below as the top questions and answers are provided about Mexican real estate and fideicomiso trusts.

What is a Fideicomiso?

A fideicomiso is a real estate trust that you can apply for at a Mexican bank of your choice when you purchase real estate in Mexico. The bank is the trustee to the fideicomiso, and you (or anyone you designate) are the beneficiaries of the trust. The beneficiaries have control over the real estate. The trust is not a lease, but it is equal to a Living Trust in the United States. You can sell it, mortgage it, use it, enjoy it, will it, and inherit it. The Mexican bank will represent you on your behalf, and be the administer

Do you need a Fideicomiso?

If you are a non-Mexican, you will need to use a fideicomiso to legally purchase any real estate in Mexico that lies in the ‘restricted zone’, which refers to any real estate that is within 31 miles (50 km) of all coastlines and 62 miles (100 km) from the borders of Mexico. Foreigners will not need a fideicomiso if they are purchasing real estate that is not located in the restricted zone, although many foreigners still choose to use the trust.

Does my property become an asset of the bank?

The bank has no rights to your property, the bank is merely a steward to your trust. Your property does not become an asset of the bank. No legal action against the bank or bankruptcy will affect your trust.

What is the Fideicomiso trust time period?

The fideicomiso trust time period is 50 years and at any time the trust can be renewed for a fee. The fideicomiso trust is always set for 50 year increments, which is also guaranteed for renewal.

What are the costs involved in getting a fideicomiso?

The current fideicomiso cost is $500.00 (USD).

Does the Mexican Government have the right to take my Property?

At no time can the Mexican Government take your property. Under the NAFTA – North American Free Trade Agreement states that Mexico cannot directly retrieve your property unless it was for a public purpose, such as building roads or highways, and then this can only be done through the correct legal action. The government will give you the fair market price for the trust along with any interest that may accrue.

Can I have a fideicomiso trust for any ejido land?

You cannot get a fideicomiso trust for any ‘ejido’ land as only Mexican nationals can own the ejido land legally. This type of land in Mexico is not considered real estate as it does not come without a title or deed.

Retirement Planning and Preparation

Retirement Planning and Preparation

A few years before you retire you should begin practicing what it feels like to be retired. This can be a dress rehearsal for you and your retirement. Practicing retirement will be a gradual transition that will show you what your new retirement life will be like and to let you know if you are truly ready to retire. Would you like some helpful tips for retirement planning and preparation? If you do, then please continue to read below.

Retirement Income

A way that you can start retirement planning and preparation is to start right now by living on the income that you will be receiving once you retire. The first thing to do is live on a budget with the money that you will have each month, and any money that you have left over should be placed into a savings account or invested. If you start right now by living on the income that you will be receiving when you retire, then you will get used to the smaller income along with saving money too. This will also let you know if you are ready to retire financially.

Spend Extra Time with your partner

It is time to rekindle the romance if you and your spouse are retiring at the same time. You can rekindle the romance with your spouse by setting certain days of the week for date nights, taking a weekend getaway, and attending gatherings with your friends, coworkers, and family members. When you spend quality time together with your spouse you are building a stronger foundation that you will need when you retire.

Travel and Take more Vacations

When you retire you will have a lot of spare time on your hands, so right now you should enjoy traveling and taking more vacations, especially abroad. This will give you an idea on how it will be when you are retired along with letting your colleagues see how the workplace is without you there all the time.

Buy a Vacation Home Abroad

Would you like to live abroad when you retire? If you are considering this, then you should start looking at properties now and begin the buying process now before you actually retire. You can consider purchasing a vacation home or even renting one where you would like to retire, and when you have vacation time or time off from work you can go there and see if you would like to retire there. This will also help you to start making friends before you retire. One great option to buying a vacation home abroad is with fractional ownership.

Start a New Hobby

Being retired brings forth many benefits, and one is having the time to do hobbies that you never had time to do when you were working. At this time you can start preparing yourself for the hobbies that you are or were interested in doing, so if you need to purchase any expensive accessories, then you should do it now while you can afford it.

Purchase Expensive Things Now

You should purchase expensive things now before you retire such as a vacation home, RV, a new car, because taking out credit for expensive items will be while you still have a full income. This will also give you an idea on how well you can make the payments before you retire.

Should you Buy or Rent in Mexico

Should you Buy or Rent in Mexico?

Many tourist who desire to live in Mexico at specified times of the year will most likely wonder if it’s better to buy or rent in Mexico. To answer that, one should take into consideration the person’s overall financial situation, life goals and experience with Mexican life.

Here are some tips to help you know if you should buy or rent in Mexico:

Benefits of Buying Real Estate in Mexico

There are several benefits of purchasing property in Mexico, which makes it no surprise that foreign investors, retirees and young families are gravitating to the change of pace in their daily routine:

  • More stable
  • Choosing to buy a home in lieu of renting one gives you more permanence and security. For example, if your landlord/lady decides to sell the property, you risk being asked to leave. Also, if the owner dies while you are under contract, there may be difficulties in having your contract upheld by the replacement owner.

  • Freedom
  • One great benefit of purchasing real estate is the freedom to make your property look the way you want it to look. Therefore, any remodeling or enhancements done will add value to your home. Also, keep in mind that when you are back in your home country, you can rent your property.

  • Potential for appreciation
  • Another great benefit of purchasing real estate is the probability of the property increasing in value over time. So, you could stand to make a reasonable profit if you choose to sell your property years later.

  • A sound investment
  • There’s no doubt that purchasing real estate in Mexico is one of the best investment moves you could ever make—especially if your property is in one of the popular tourist locations that don’t seem to be going out of style for years to come.

  • Benefits of when you rent in Mexico
  • Your financial situation may warrant that you rent instead of buying a property in Mexico. However, if you decide to save and buy the property later, renting may be the best way to decide if the property is worth the financial risk.

  • Less Responsibility when you rent in Mexico
  • Renting a property is the same as saying you have placed all upkeep and repairs in the hands of the landlord/lady. That means if the boiler just happens to shut down, your landlord/lady will absorb the worry of finding a person to fix it and paying for it. Also, if your roof must be replaced, you are not responsible for its upkeep because that’s the owner’s responsibility—your landlord/lady.

  • No long-term commitment
  • No long-term commitment means you have the flexibility to relocate more often. You can get a rental contract as short as a month, a year or even two years. To terminate your contract, it is ethical to provide notice within a specified period.

  • No need for a large investment
  • One of the biggest advantages that comes when your rent in Mexico instead of buying is being able to secure a property with a small investment. Most rentals in Mexico can be obtained by paying the first month’s rent and a deposit the equivalent to a few months.

Rental Agents and Realtors in Mexico

Rental Agents and Realtors in Mexico

If you are planning on making Mexico your second home, then it is wise to set aside time to find out where you will be staying. It may seem like a lot of work in preparation, but it is well worth your time doing so. Often, it is a good idea to rent property before you purchase, unless you have fallen in love with a place you have found while enjoying try and buy visits to Mexico.

Rental agents and realtors in Mexico

It is not a bad idea to surf the internet to see what is posted as available rentals and properties for sale, but most people looking to stay for long periods in Mexico like to have a local realtor help them find the right property for buying or renting.

The services provided by realtors in Mexico to those looking to buy property are free because they are paid by the current owners of the property —whether selling or renting. So, it is very good sense to work with a realtor— especially if your Spanish is not good and you have limited knowledge about the location you plan to move into. If you are buying, realtors can do a lot of the busy work of negotiating for you.

A beneficial local agent will invest in time to find out what your needs are and what your budget looks like for acquiring a property. The realtor will be your spokesperson—negotiating terms, interpreting terms for you and explaining any additional information you may need.

Make sure your realtor is a member of AMPI (Asociación Mexicana de Profesionales Inmobiliarios, Ciudad de México, A.C) because this organization ensures consumer rights are protected by regulating real estate policies.