Choosing a property

How to find your dream property in Mexico

Choosing a property

A property investment in Mexico can offer good value for money, but like in any other country, you should do extensive research before you purchase any Mexican property.

One of the most difficult questions you will face with your property purchase in Mexico is the valuation of the property you intend to buy. Except for main tourist destinations, there is very little official data on property values available.

Most properties are sold on the open market, so prices are determined by supply and demand. Nevertheless, prices can be extremely varied depending on the circumstances of the sale and the profile of the seller. If you buy from a local or even international estate agent, you are likely to get a price that reflects the current market conditions for the target group of that agent. If you do your research on your own and buy directly from local people, you might get a significantly lower price.

Private property sales in Mexico

Be aware, however, that private properties are often not officially announced and are rather sold through private connections. If you are used to a property market where you simply access a major estate portal to find all the properties of interest, you might be a little surprised that things in Mexico are not that straightforward.

Especially in remote areas, a property search can take weeks or even months. The first problem can be as early as when you simply try to see if there is any property for sale. In many areas you will not even find a real estate agent who can tell you what is available on the market. In this case your best bet is to start asking the locals if they know anyone who would be interested in selling a property. Eventually Carlos from the grocery store will tell you that his cousin Jesus has a friend who lives in the next village who has an uncle who has some land on the beach that he might want to sell. By the time you get to meet the uncle, you will have spent several hours or days talking and drinking beer and coffee with his whole family, maybe only to find out that he has just sold the land to some people from the next city who want to build a holiday house on it. But if you get lucky, the uncle does have some land for sale, and you will be able to buy it at fraction of the price that you would have paid to an estate agent.

Buying, building or restoring an existing property?

In most cases you will get better value for your money if you buy land in Mexico and build a house on it than if you buy a house that already exists. Of course, building a house also means that you will have to spend additional time and effort on this project, even if you decide to outsource much of the work to third parties. If you want to make sure that everything goes smoothly, you should plan to stay in Mexico until your house is finished. If you do not have the time for this, it might be more convenient to buy a house that is already finished.

You can also buy a house that is in need of serious renovation. In Mexico you can still find quite a few old colonial buildings that upon renovation can be transferred into magnificent and stylish homes. Be aware, however, that such renovation is often more expensive than tearing down a house and building a new one. Additionally, Mexicans have become more aware of the potential value of a renovated colonial house, so it is not that easy to find any bargains of this type anymore.

Location and infrastructure

In general, property prices in Mexico tend to increase year-by-year, but there are great differences between different locations. In some places like the Riviera Maya, property prices have skyrocketed in the last decade, while in other more remote areas price levels have only increased gradually.

The main factors influencing the price of any property or land in Mexico are location, local infrastructure (roads, airports and services) and the development of the surrounding area. When researching these factors, you should also take into account any plans for future development. If, for example, a high-speed route is built to connect a previously remote area, property prices tend to increase once these plans are announced, and even further once the road has actually been built (be aware that ‘planning’ in Mexico is a quite flexible term, so a road that is supposed to be built within the ‘next 2-3 years’ can take a decade to get finished). In general, road infrastructure is improving every year, and many once remote areas are now easily accessible.

Water supply, electricity sewerage and drainage

Whatever property you buy in Mexico, be sure that it is served by a reliable water resource. Ideally your property should have its own main feed. If it doesn’t, you need to make sure that you can get water from a neighbouring plot and secure this in writing. In many areas water supply is rather scarce, so you will have to calculate the cost of storing water in your own tanks. If there is no official water supply, you might be able to drill for your own water, but this will significantly increase the cost of building.

Another key factor when considering a property purchase in Mexico is the reliability of the local electric supply. Mexico’s electricity infrastructure is very poor, with frequent outages that can last up to hours or even days. In remote areas you will sometimes not find any electricity supply at all, so you have to install you own generators or generate electricity through a solar system.

You should also check whether your property is connected to a public sewerage system (if not then you need to install and/or maintain a septic tank sewerage system), and whether there is sufficient drainage for the rain periods (as otherwise you will have to install this on your own). All these factors of local infrastructure have a severe impact on the cost and maintenance of a property in Mexico, so make sure to take them into account when calculating the value of the property.

Further reading

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