Canadians Buying in Mexico

Go South, Go 2nd Home, Riviera Maya, Mexico

Flock together with many other Canadians who are heading to The Riviera Maya for real estate and lifestyle.

As published in Mexi-Go Magazine, March 2014.

With the deep freeze that arrives to Canada each winter, I am seeing more Canadians buying vacation properties and retirement homes here. 

Previous to 2003, I had never heard of nor, visited a small place called Playa del Carmen, Mexico.  After 17 years in Whistler British Columbia, an opportunity to move to Riviera Maya in 2003 was offered to me. Supposedly it was only for a 6 month real estate sales launch with Intrawest Resort developer. That was 10 years ago. I have been here ever since.  I loved it then and I still love it today, 2014.

Visitors and clients often ask me what it is like living in a beautiful popular international travel destination like Playa and Riviera Maya. They want to know if I “like” living in Mexico. 

Let me share with you the inside scoop on what is so great about the Riviera Maya and why there are so many Canadians moving here, retiring here and buying second homes here. After that, I will share with you what are the important considerations when buying a property. Then you too can join us here in Riviera Maya.

Some quick facts:

120 km of beautiful white sand beaches, dotted with eclectic beachy communities and full service cities, including Playa del Carmen, fishing town of Puerto Morelos,  up and coming beach town Tulum, Akumal and its turtle sanctuary, the boaty-marina community of Puerto Aventuras, and some smaller residential off the beaten path, off grid communities. 

Tropical climate with average yearly temperature of 28 celcius. Average number of days of sunshine per year – 200 days per year. Every day is a beach day even when it rains. 

Fast, direct airlift from every major city in North America, every day to Cancun, as well as many, direct flights from major European cities.  Cancun airport is the 7th busiest airport in all of Latin America.

Playa del Carmen, the heart of the Riviera Maya is a vibrant beach city, paralleled against white sand beaches for miles and miles, blue Caribbean water. Check out the hip and happening beach clubs with music and food and night- life, or walk in solitude at your favorite spot.  The pedestrian -only 5th ave of Playa del Carmen, has a wide variety of shops and open air restaurants, coffee shops and outdoor social lifestyle. Fun.

Major banking and financial institutions with all services available in English.

World class hospitals and care with English speaking doctors  highly trained in all specialities. Growing and busy medical tourism sector.  

Active Lifestyle

Golf Golf Golf- Nick Price, Jack Nicholson, Robert Trent Jones, Greg Norman are the most prominent names that have designed signature courses here in the Riviera Maya. There are 18 courses all within 1.5 hours of each other. 

Scuba diving, snorkeling.  The Meso America reef parallels the coast line from Puerto Morelos to Honduras and is the world’s second largest reef after the great barrier reef. 

Kiteboarding has grown at a phenomenal rate world wide as a wind powered extreme sport. learn and enjoy the sport on the warm forgiving waters of the Caribbean ocean. 

Cost of Living is substantially lower.  

Cost of gas is about 90 cents/ litre. Bananas are .65 cents/ kilo. Beer is between 2 - 4 dollars a bottle, depending on where you drink it. Tacos are 50 cent each. 

How do you like it so far?

Are you a foodie? The restaurants are very high quality and a wide variety of flavors and countries are here. Typical Mexican food from the iconic taco stand to Mayan cuisine, you can also enjoy authentic Italian hand made pasta, French restaurants with real French chefs German schnitzel and beer house, East Indian curry restaurant, Falafel house, fine wine and dine restaurants too. 

Playa del Carmen and the Riviera Maya is truly an International destination with friends and colleagues and amazing food, from all over the world. I live and work and socialize with Mexican, Columbians, British, and Americans, Canadians, Argentinians. 

It is a great life and a great place to buy real estate. In my 10 years here I have worked with buyers from Canada (about 55% of my buyers are Canadian), USA, Mexico, Israel, Serbia, Hungary, England, China, South Africa.

If you are considering buying in Riviera Maya Mexico as a second home or full time place, there are some important considerations about the buying process. People often ask me what the rules are when buying as a foreigner.

The purchase process is quite similar to Canada with a few differences, discussed here. 

1) Any foreigner who owns land within 100 km of the boarder or 50 km of the beach has to have the title of the property in a bank trust (a fideicomiso). The owner of the property becomes the beneficiary of the trust. It sounds daunting and different however it is just a matter of price and process. The “owner” of the property in a bank trust, (beneficiary of the trust) has the right to use, mortgage, encumber, build on, lease, sell, or pass to named people in a will, with out restrictions.  It is 100% ownership, not a lease, contrary to many questions I get about it.  

Setting up a bank trust is handled by one of our lawyers for you so it does not really “feel” different. The trust bank charges an annual fee to hold the deed. It ranges from 500 usd to 1200 per year, depending on the bank. 

Although there has been a vote passed in Senate to remove this requirement it has yet to be voted on in Congress.  Until then foreigners will buy residential property in a bank trust. 

2)  The use of a Notario in all real estate transactions.  A Notario in Mexico is the highest and final authority on creation of new deeds, and the conveyance of deeds and  rihgts of trusts between owners. A notario in Mexico is first a lawyer many years, who has taken extra course and exams and is then appointed for life by the governor of the state. 

With those basics in mind, to get a property at the best price and terms that fit your requirements in a safe and educational and enjoyable way, here is a basic path. 

Choose a qualified realtor to work with. Why ? 

As a previously licensed realtor in Whistler BC, it was at first hard for me to get used to the fact that there are no licensing requirements for real estate professionals. Most real estate people enter the field here with no prior experience and have no formal training in the role of a realtor with respect to fiduciary duty and full transparency in transactions. Now I can see that most of my colleagues are good honest hard working agents who offer good service and good honest transactions.  However most agents are independent, are not accountable to a broker, like in Canada. The internet is full of old listings, or inaccurate information that can be misleading because there is no true 3rd party, impartial MLS that lists all agencies listings and show for sale, sold, days on market and sold price. 

It is wise to have a few questions in mind to select the right realtor for your personality and interests, the same as you would do at home.

Going forward: 

1)My agency has an in depth needs analysis interview by phone or in person, in which we get to know the client and their interests and requirements. That way we are efficient with time and property selection.

2)Identify properties with through phone calls and emails and web searches with your realtor of choice..One agent, a good one, will offer to show you all listings, including ones of another agency that fit your requirements. No need to work with multiple agents.

3)Learn (more) about purchase process in Mexico. 

4)Take a trip to look and offer on property of your choice. The usual buying trip is 3-5 days. Many people start their search on line 30- 60- 90 days in advance. Some take one or two trips to finalize the decision, some are very fast and clear with very specific parameters that only a few properties will fit. 

5)Offer. Just like at home. Name price, terms, conditions, dates. 

6)Reservation/or earnest money deposit, held in escrow, third party trust account. No one touches it until close. 

7)Building inspection (if you want, not required). Check also all documents such as homeowners meeting minutes and rental history, income vs expense report, or building restrictions if building a property is desired. 

8)Purchase contract. Prepared uniquely and individually for each transaction. This takes about 2- 3 days to write after the offer is accepted. Once signed, it is now binding for the buyer and the seller. 

9)Close 4- 6 weeks later at Notario's office. This is when you sign the fidiecomiso. This is when the property title is conveyed to new owner.  A property is always sold free and clear of liens and encumbrances. This is when money is  disbursed to the seller. So your money is secure and not disbursed from escrow until close.

If you want to purchase in pre-construction then you follow the above steps. Once you sign the purchase contract you put 30% down and a) nothing further till close or B) payments during the construction phase, depending on developer and or the price and discounts.

Closing costs are a little higher than in Canada. About 7% of purchase price and includes Notario fees, property transfer tax, ministry of foreign affairs permits, bank trust set up fee and first year payment and deed registration fee. A full quote if provided once the actual property is chosen. 

 

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