Destination Sayulita sees 123% increase in tourism
In 2015, Sayulita was designated a “Pueblo Mágico” or Magical Town and has seen an increase of 123% in tourism compared to 2015, according to analysis from Despegar.com
“Since the Ministry of Tourism started to promote national campaigns such as “Traveling in Mexico”, Sayulita has experienced a surge in national tourism if you look at the increase in visits to destinations like Sayulita or Tequila, that previously were less common” said Gabriel Rosillo, marketing manager at Despegar.com.
Also in 2016, Mexicans traveled more to national destinations, visiting places such as Mexico City, Monterrey, Jalisco, Yucatan and Querétaro.
According to Despegar.com, the ranking of the five national destinations with the largest growth in 2016, were:
. Sayulita (Nayarit) – 123% growth.
. Tequila (Jalisco) – 74%growth.
. Tijuana (Baja California) – 51% growth.
. Cabo San Lucas (Baja California Sur) – 47% growth.
. Puerto Escondido (Oaxaca) – 42% growth.
Mexico invested 2,500 million Mexican pesos in the Pueblos Mágicos program from 2013 to 2016, the Tourism Ministry reported. The figure is equivalent to 50% of the 5,000 million pesos earmarked since the start of the program in 2001, Gerardo Corona González, undersecretary of innovation and tourism development, said in a statement.
“Undoubtedly this model of development changes the economic dynamics of the community, increases employment and improves services, as well as the quality of life of the inhabitants, added Corona González.
To read more about Sayulita and the Pueblo Mágicos program, read our article here:
Mexico is an extremely popular tourist destination that caters to millions of visitors each year. In fact, you might be surprised to learn that over 1,000,000 foreigners now live here and the trend is increasing. So obviously, just like in any other country, some negative things happen to people and its gets reported in the media who are always looking for a dramatic headline. However, while the media sometimes portrays Mexico as a dangerous place, it is statistically very safe. So, as positive goodwill ambassadors for Mexico, and for Sayulita especially, we set out to debunk some typical Mexican myths that simply aren’t true.
1. Myth No.2:Mexico is a poor country
A long-standing myth that Mexico is a country struggling with it’s economy is definitely out-of-date. It is now the 15th largest economy in the world and the 3rd largest trading partner with the United States. Also, it is predicted to be within the top 8 economies in the world by 2050, which is very powerful. While agriculturally still very strong it has now developed a massive technology economy and is the 3rd largest manufacturer of cars in the western world.
2. Myth No.1: Drugs are everywhere in Mexico.
Many places yes, but everywhere no. Most of the border towns with the US have created this bad reputation because of the drug traffic and their history of violence. But Mexico is an extremely large country and a federal state. It is much better to look at individual regions, cities or towns within Mexico and if they have been a long history of crime before labelling an entire country with the same brush.
While drug cartels and their ruthless reputation sometimes dominate the headlines, the Mexican government are spending millions to dismantle the cartels and increasing international pressure and the hugely beneficial tourism economy are leading the change.
3. Myth No.3: The public healthcare is bad
Mexico has some of the best medical healthcare institutions in the world. Many foreigners from the US and Canada visit Mexico for medical treatments for a fraction of the cost. Since the introduction of the “seguro popular” over 10 years ago, which gives all residents medical coverage, the standards and professionalism have increased dramatically in larger urban areas. Foreigners who own property in Mexico can register in the healthcare system for a little as $300 a year. Now, most urbanised areas can provide highly trained physicians woking in state-of-the-art facilities.
4. Myth No.4: Property in Mexico is expensive
Although Mexico property is steadily rising with 8% growth annually, it is currently undervalued in the global market. This has led to a large influx of investment into Mexican property and an expansion in the construction sector. Couple with that the lower cost of living it explains why many North Americans and Europeans are taking advantage ofreal estate opportunities for business or private purposes.
5. Myth No.5: Crime is common in Mexico
This is definitely an outdated myth. Mexico ranks 21st globally for homicides, a long way behind other popular tourist destinations like Brazil, Jamaica or Guatemala. While kidnapping is an issue in Mexico, many are connected to drug wars, poor regions and power struggles. It is a lot less common for foreigners to be kidnapped and is increasingly seen as a foolish means to get money. As with most cities and travel destinations, there is some petty crime in many areas. Taking a few common-sense precautions will help you enjoy Mexico with no problems.
Well, the short answer is Return On Investment. It takes a unique set of circumstances, and a little good timing, to forecast a very promising R.O.I in 2016 and beyond. We believe that Punta Sayulita is perfectly placed in the luxury villa market to exploit the next wave of property appreciation. In a recent article, we identified The Golden Mix of Location, Lifestyle, and Potentialas the 3 key characteristics required to position high-end properties in the global marketplace. In a different article, we detailed the unique factors you should consider for real estate investment and why we believe thatPunta Sayulita is ahead of the curve for property investment.
Appreciation of property value
It’s important to note that 2 of the most important factors that contribute to property appreciation are tourism development in the region and population growth in the region.
International tourism in Sayulita has been growing over the past 10 years and is projected to grow aggressively as the area continues to expand its profile and infrastructure. This can be seen and backed up by significant investment and support from local, regional and national governments who have recognised the potential of tourism for the economy.
Additionally, Forbes has reported about a significant investment in a new luxury hotel by Grupo Autofin in the Riviera Nayarit and at the trade website, Hospitality.net reported a massive investment by RLH Properties into new hotels across the region. This, of course, is excellent news for anyone involved in the tourism and services sectors and is further evidence that the entire region is economically expanding and creating employment, which leads to population growth.
Without fail, private investment follows these trends in Mexico. Combined local and international investment put pressure on the long rental market as well as the appreciating real estate market.
What’s involved in running a rental business in Sayulita?
The first objective investors should look at is the legal side of buying property in the restricted zone in Mexico. The link explains the necessity for The Fideicomiso, some of the principle costs involved, and other legal obligations. Mexico’s Foreign Investment Law allows foreigners to acquire title to land in the restricted zone by one of two methods; through a Mexican corporation or through a bank trust.
If you are considering investing in property to enter the rental market then setting up a Mexican corporation might be the better option as it allows you more possibilities for expansion. It is common to buy property through a corporation when the intention is to use the property for commercial reasons. Buyers interested in multiple properties often choose this option.
For more information about buying property in Mexico listen to this Podcast named
What better way to describe the ins and outs of the rental business in Sayulita than to interview an existing businessman who runs a successful rental property named Villa Punta Paraiso. We spoke with the owner, Jorge Carrillo and asked him 20 pertinent questions about the past, present, and future.
1. Why did you choose the buy a property in Punta Sayulita?
I´ve been coming to Sayulita since I was a kid. I was always looking for the perfect spot to surf along the beaches that are nearby, so I have seen the growth of this beautiful town in all aspects. My kids and family enjoy the place, a small little town where you and your kids can feel free!!!
2. Was it always your plan to invest in this property and rent it as a business?
Yes .., Definitely it was always on our mind to invest on a home/ Villa somewhere and why not the town we love and that always makes us feel like home.
3. Is it difficult to establish a business in Mexico for the rental market? Did you set up a legal company for this?
I am a real estate broker so no, it is my bread and butter, and yes I established a corporation and pay taxes. Like all businesses, it has a process to get it started. Yes, we have a legal company, which meets the requirements for the authorities.
4. Is there a lot of continuous legal responsibilities to take care of?
No, just initially.
5. Do you have any type of legal agreement with the renter?. Do you take a deposit for security? Have there been any negative experiences?
Yes, we do have a legal agreement with all renters, it’s a must. There has to be a substantial security deposit. But so far, we have not had any negative experiences.
6. How long have you owned this property? How long did it take to find your first rental?
I have owned it since 2014 and is has been 1.5 years on the market and it took us no more than 2 months of hard work to make it happen.
7. The most popular rental periods are Christmas, New Years, Thanksgiving, Easter Week and the main 8 weeks of summer. Is there any demand for your property during the rest of the year?
Those are the peak weeks out of the year, yes, we have had to make promotions for low demand weeks and have learned how and where to promote, in other words, we have to be creative in order to keep the guests coming.
8. What are rental prices in low season and high season in US$?.
Low season average $1200-1500, high season $1800 -2000 per 24 hours.
9. Is there a lot of maintenance with the property?
Yes there is, especially with Palapa Roof, the pool, the routine cleaning, in-house chef, the garden, golf cart, concierge, and insurance etc
10. Have you seen much competition in the area?
There is a lot of different competition. The north and south part of Sayulita are very popular. You can find different styles and bigger Villas that have been on the market for years and they have set the pricing.
11. How have you seen Sayulita develop in the time you have been here?
Yes, every day it is growing. It seems like people are starting to understand the potential of this surf/fishing little town. There are more high-end establishments as well as restaurants with very high standards.
12. Are you considering buying a second property for the rental market?
Yes,but I have not seen the development process according to plans and projections. It could happen in the near future and it might be something similar to what we have already.
13. What advice would you give to new buyers entering the property market?
It’s a different world from where there coming from, so be patient.
Make sure you have a lock tight construction or purchase agreement with penalties and delivery dates for delivery and title.
14. What’s the hardest part of running a rental property?
Maintenance and keeping the high standards that renters like to see for the prices they are paying. Salt, dust and tropical weather, it’s an everyday challenge.
15. Where do most of your rentals come from? Online sites or referrals?
They come from various sites, others come from referrals. In other words, it will be a 60/40 split.
16. Do you outsource any of the work for looking after the Villa to local people in Sayulita?
Unfortunately very little, there are very few people in Sayulita that are dependable or committed. I prefer to hire from neighboring communities.
17. When people come to stay at Villa Punta Paradise what do you suggest they go for activities/ restaurants and to have fun?
We just tell visitors to go and experience all of Sayulita and especially the local stands and stalls. This is what probably they enjoy the most. Also, activities, there’s a lot to do. Just walking close to the property there are lots of single trails that will take you to different beaches around us. There’s a lot of wildlife to experience, also, horseback, hiking, surfing, paddleboarding , kayak fishing, zip lining etc.
18. Can you describe the demographic of the people who stay at Villa Punta Paradise?
Couples in the 50 age bracket, or with their families. People come from everywhere: England, Australia, US – Boston, Chicago, Colorado, California.
19. What is your favourite thing about Sayulita?
Being able to walk free, barefoot and see my kids exploring by themselves and enjoying other people’s culture, the pure relaxation.
20. How good is the Sayulita lifestyle?
Just perfect!!! Great!! It doesn’t get any better than this.
At the end of the conversation with Jorge Carrillo mentioned something curious. It was a reference to “a return to the property boom of the early 2000’s in Mexico”, just before the global economic crisis. Jorge explained that he is currently earning 10% return on his investment in the rental market. In his first year of business, he exceeded his goal within the first 6 months. The high season months can bring in $20 – $25,000 a month alone. So a well-established business with good referrals and some good marketing can maintain a high level of occupancy all year round.
What are the revenues and costs involved in the rental market in Sayulita?
If you decide to start a rental business in Mexico there are a few options to consider. Firstly, many prefer to live a large amount of their time in Sayulita. This allows them to be hands on with their business and give guests to the villa a personal touch and high level of customer service. Also, there’s the flexibility to use the villa as and when you need it for your own activities and events.
The other option is to register your villa with a rental agency. These companies handle the bookings and some of the marketing in exchange for about 20% of revenue. Usually, there is also a monthly property management fee to manage the day to day running of the business and upkeep. While this will diminish your profits, this business option is still very lucrative with the huge advantage of not requiring a lot of time.
Let’s take a look at the financials of a rental business in Punta Sayulita in detail. In this example, we looked at a property which initially cost $1,400,000 but has since increased in value. The data covers 36 rental months since the first month of business and details the standard costs and revenues.
If you would like more information, deeper financial information or to visit Punta Sayulita to discuss your investment in person then please use this Contactlink. We have a very experienced staff to answer all your questions.
Prices for houses in Playa del Carmen have been rising, but property investment in Sayulita is ahead of the curve for all the right reasons
For many years now Mexico has become far more than a great tourist destination. Savvy investors and business people have identified investment opportunity in many locations in Mexico. Certain towns and cities in Mexico share the unique Golden Mixof location, potential and lifestyle. Also, significant improvements in national infrastructure have helped certain property sectors to see a steady rise in real estate prices over a few years, making it a perfect time for property investment in Sayulita.
Playa del Carmen is an excellent real estate example as a case study that shows how investors are increasingly re-selling at a higher price, renting out their properties as a business, or using them as a retirement home. To help our clients understand and equate all the important factors we use a growth curve to visualise the best time to get involved in a property deal.
There are many factors to consider when investing in property. As the above curve shows it is advantageous to invest when the market prices are lower. As with Sayulita, house prices are steadily rising but still significantly lower than a more developed area like Playa del Carmen.
Private investment in the luxury home market closely follows the first 2 factors on the list below. Analysis of all significant factors helps us to confidently assess growth potential for your investment.
There are also many other important considerations to ensure that market prices will continue to increase, so we have listed them below to help you understand what to look for. Here are the top 8 factors that contribute to appreciation in property prices.
1.Tourism developments in Sayulita
Perhaps the first indication of growth potential is government support and investment. Recently, Sayulita was included in the Pueblos Magicosprogram which included a sizeable investment in local infrastructure. The program is designed to develop “Magical Towns” that offer something unique and cultural.
Major hotels have started to open in the region, including 3 new golf courses, and other service companies are beginning to establish a presence here.
2. Historical growth in the region and projected population growth
Since the 1960’s Sayulita has been developing under the shadow of the beautiful city Puerto Vallarta. The region started developing rapidly and Sayulita quickly gained the reputation as “A Hidden Sanctuary” in paradise. Realtors and estate agents started to recognise the growth potential in Sayulita about 5 years ago and since then Sayulita and the Riveria Nayarit has expanded consistently as an excellent location for luxury property development.
Added pressure on the property market from new industries entering the region, a consistent increase in tourism, with new jobs being created, has increased the projected population growth in Sayulita. All of this are fantastic indicators when analysing the economic growth of a region.
3. Interest Rates
The lower the interest rate the lower the mortgage repayments and depending on how you would like to structure the investment this can be fixed or variable. Recently, mortgage interest rates are low again since the recession. All this means a well-structured mortgage on low-interest rates can reap high-end rewards in the future.
4. Global Economic Markets
The International Monetary Fund published a projection for growth in 2016 as a modest 3.2 percent but that recovery is projected to strengthen in 2017 and beyond. This is driven primarily by emerging markets and developing economies, many of which are in the southern Americas like Mexico. Read more here
We all know that political and environmental issues can change economics quickly but as it stands there is a much higher chance of global economic recovery and growth than another recession.
5. More Renters in the Market
There is a growing number of younger renters in the market. One of the fastest growing metrics right now is how people are spending money on experiences rather than material things. The younger generation is choosing holidays and adventures over expensive clothes and cars. This has contributed to an increase in property investment as a rental business along the Riveria Nayarit coastline as business people identify new opportunities. For example, Sayulita`s rental market has grown consistently over the past 10 years as holiday makers, adventures, and especially surfers come to discover this unique destination.
6. Houses are more Popular than Apartments
This is sometimes a reluctance to finding an apartment to rent. Home-owners confess that renting an apartment can feel like a step backwards to move to an apartment. As a real estate investor, this is a great opportunity. From our experience, we know that homeowners often make better tenants because they treat their rental home as their own for the time they are staying there.
7. Real Estate is a great long-term investment
Real estate is still an excellent long-term investment. If you consider the growth over the last 15 years, regardless of the recent crisis, real estate within the restricted zone of Mexico is still valued much higher than it was. Also, if you decide to rent your property you won’t have a problem finding renters to pay your mortgage.
8. The Lifestyle that the region provides
While it is possible to buy luxury property in many locations across the world, one should consider the lifestyle surrounding the location. Shrewd investors select locations that offer as many lifestyle choices as possible. Culture, cuisine, leisure, health, outdoor activities, and safety are all essential elements that contribute to the growth of a region.
Timing is Everything
In the 1990’s Playa del Carmen was definitely not a hot property market. This changed when it was recognised as a beach holiday destination and attracted many European visitors. Hotels and investors entered the market and the room inventories doubled in a matter of just 10 years. With the dramatic increase in growth, the year-round population boomed and the real estate market began to expand.
During the first few years of the 2000´s, many investors would purchase pre-construction condo units to sell them 12 months later with 30% or more appreciation. One realtor we interviewed about the boom remembered his clients commenting that “I should have invested in that property when I first saw it a few years ago”.
While Playa del Carmen is experiencing a downturn in appreciation values, Sayulita is perfectly situated to repeat the dramatic increases that Playa del Carmen had. For those of you who remember the appreciation wave of the early 2000´s then now is your opportunity to buy into the market before the next wave.
Why Punta Sayulita is the perfect investment in location, potential and lifestyle
Punta Sayulita is first and foremost an investment in luxury property, and when you see the statistics it stands up as very competitive in the global property market and boasts impressive growth as the leading undervalued market in the Americas. But obviously, not everyone invests in property just for the highest return on investment. Our experience shows that contemporary property buyers require much more. They are seeking out those unique places to live where life feels exciting and fulfilled. Whether you are retiring abroad, scouting holiday homes, or developing a property portfolio, then you should consider the golden mix of location, potential and lifestyle.
Punta Sayulita belongs to a small group of global locations where this golden mix of values is available. It’s about choosing a solid property investment, yes, absolutely! But it’s also about investing in great experiences, exploring a rich and incredible lifestyle but ultimately it’s about an investment in you.
When talking about buying and selling property everyone knows the famous phrase “location, location, location”. Well, geographically Punta Sayulita is a perfect location on the Pacific side of Mexico just 21 miles from Puerto Vallarta. Puerto Vallarta put Sayulita and Nayarit on the map as a paradise location when Hollywood A-listers Elizabeth Taylor and Richard Burton filmed and vacationed here in the 1960’s. Since then, Puerto Vallarta has become a bustling city and as a consequence, smaller, less touristic towns have developed to cater to those looking for a tranquil location but still close enough to urban life and infrastructure.
Getting to Punta Sayulita is quick and easy. It is less than an hour’s drive from the airport in Puerto Vallarta. Flying to Puerto Vallarta is just 2.5 hours from Los Angeles, 3 hours flying from Denver and 6 hours flying from New York City. It’s close proximity to North America is only the primary reason Punta Sayulita’s location is considered perfect. It lies on the Pacific ocean just below the Tropic of Cancer at latitude 20.868889 and longitude 105.440833 and is surrounded by lush forest and jungle. This creates a unique location with an abundance of outdoor activities, with the every popular surfing, paddle boarding, snorkeling, whale watching and the numerous hiking, trekking, and horse riding excursions available. Read more about the eclectic and awesome wildlife in Sayulitahere:
Moving around Punta Sayulita requires the use of a car but many locals and vacationers use golf carts to commute from their villas and homes to the center of town or the beach. Although some of the roads are steep and windy, the panoramic views, tranquility, and privacy that Punta Sayulita offers you are second to none. It’s also important to note that although Punta Sayulita is just a town of 4,000 residents it has all the modern amenities that a large city would have, including a post office, hospital, police station, and multiple ATM machines.
A quick google search reveals some nice opinions about Sayulita and although it’s still largely “under-the-radar” because Puerto Vallarta is so well known and established, Sayulita enjoys all the values and benefits of Puerto Vallarta without the higher prices and city distractions. In this linked article by The Huffington Post named The World’s 12 Best Places to Live or Retire in 2016, Puerto Vallarta is numbered at 10. The article backs up everything we can say about Punta Sayulita’s exceptional location
“This stretch of Mexico’s Pacific coastline has already been developed to a high level. Life here can be not only comfortable but easy and fully appointed, with world-class golf courses, marinas, restaurants, and shopping. This is a lifestyle that is available only on a limited basis worldwide, a lifestyle that is truly (not metaphorically) comparable to the best you could enjoy in southern California if you could afford it. Here you can afford it even on an average budget”
The main reference for assessing property costs is the price per square meter. It is the best way to achieve an apples-to-apples comparison among different markets. So to help position the region of Sayulita in the global market we first looked at Mexico’s property potential within the world, and then the price per meters squared comparison between locations in southern America.
So let’s put Punta Sayulita in a global perspective shall we?
In the linked article by The Telegraph entitled “Place in the sun? Where to invest in undervalued property in 2016” there are 2 graphs detailing the most overvalued locations in the world and the most undervalued. From an investment point of view, the undervalued markets are of a lot more interest because there is a lot more potential for growth.
In the graph on the right, you can see that property prices in the USA and many countries in Europe are classified as overvalued as demand grows higher coupled with a shortage in supply.
“As Britain and Sweden have demonstrated, a shortage of supply can mean prices rise even where they are already “overpriced”.
In sharp contrast, Mexico is positioned in the undervalued graph with 8% annual growth. This means that as annual growth continues, there is a window of time to invest until the property prices catch up with the most expensive locations and trends change.
Now, if you look at the average price per square meters for property investment in different countries in the same continent, then Puerto Vallarta is identified as very competitive. As we discussed above Puerto Vallarta was the first location to be discovered and developed and is the airport destination to get to Sayulita.
However, because Punta Sayulita is less than 1 hours drive from the airport and is situated on the ocean, surrounded by forest and enjoys a higher level of tranquility, we believe it is better suited to those who like a little more seclusion and quiet while enjoying the easy access to all the amenities of the bigger cities.
Furthermore, the price per square meter for Sayulita is even more competitive yet offers more benefits for lifestyle.
A good investment is about getting the most for money while minimizing risk.
In the linked article below, by The Huffington Post, Puerto Vallarta is listed at no.7, at $1,273 per square meter whichoffers fantastic growth and potential. This places Sayulita among the top locations when considering location, convenience and growth potential.
Let’s consider a comparison with an overvalued property in Hawaii. Hawaii is the new hot property location within the United States in 2016. The cost of square meters in the center of Honolulu, Hawaii, is $4,815 which is quite a price jump from $1,273 for the region of Sayulita. If you consider that both locations can offer the same approximate level of lifestyle and luxury amenities, then the logical investor would certainly look to a location like Sayulita. Why? Because you can buy a lot more for each dollar invested.
It is an interesting exercise to consider what added value you can purchase with the extra money. Perhaps your new property can have a lot more space, more bedrooms. The difference in costs between Hawaii and Mexico could mean the purchase of a car or boat for your new property.
Your options within the housing market expand as the cost per square meters lowers. But this is an even stronger point when you can match the perfect lifestyle with a lower cost of living like we have in Punta Sayulita. Basically, you get a lot more value for your hard earned dollar/pound/ euro or peso.
The all-year-round warm climate influences much of the lifestyle in Sayulita with water sports and surfing extremely popular. There is never a bored moment in Sayulita with a huge selection of activities attracting fun-loving healthy people.
While there are many places for Mexican food, Sayulita has developed to cater for the international market and the cuisine, restaurants and nightlife now have a wide variety of styles and tastes.
Like all Mexican towns, Punta Sayulita has its own unique culture and traditions and once a year celebrates Festival Sayulita which year so far is getting bigger and bigger. In 2015 Punta was also added to the exclusive list of “Pueblos Magicos” or “Magical Towns”. This honor has been given to just 111 towns across Mexico and is a project to develop special symbolic features, legends, and history.
Here’ s a quick look at 6 secrets of Sayulita which details different activities available in Punta Sayulita
The “Golden Mix” of conditions is definitely a solid basis to start your search for the perfect property that suits you, but nothing beats the actual experience of visiting Punta Sayulita to feel just how unique it is. We are offering a Punta Sayulita Discovery Experience which provides you with a FREE stay of 4 days and 3 nights at our guest villa. It is an experience you will never forget ! Follow the link above to book now.
For further details about the hidden santuary of Punta Sayulita down our brochure here
The creation of the restricted zone in Mexico was part of the recent changes in laws and regulations in relation to buying property in Mexico. These changes have made investing in property a lot easier, a lot less complicated and a lot more attractive to foreign investors.
To this end we have written a guide to buying property in the restricted zone in Mexico. Is it really a compilation of commonly asked questions from our clients. We hope that it will ease you worries and remove any obstacles there may be ahead of you. Our team at Punta Sayulita has the experience to help you every step of the way.
The most important thing that you should know is that buying property in the restricted zone in Mexico is completely legal and 100% secure.
In the Mexican constitution the restricted zone is defined as all land located within 100 kilometres of any national border and within 50 kilometres of any ocean. It also states that no foreigner is allowed to purchase direct title to land within the restricted zone. However, Mexico’s Foreign Investment Law allows foreigners to acquire indirect title to land in the restricted zone by one of two methods; through a Mexican corporation or through a bank trust (fideicomiso).
A little Spanish will go a long way here in Mexico and although many people and places will speak English having some words and phrases will open doors and encourage positive relationships.
In regards to buying property here, an important word that you will need to know is Fideicomiso. Pronounced “Fee-day-coh-MEE-soh”. Mexico created the Fideicomiso to encourage foreign investment in the highly desirable areas, particularly along the coastline.
Here´s a simple breakdown of what you need to know:
– A Fideicomiso is a real estate trust that is held at a Mexican bank of your choice, for exampleHSBC or Santander.
– The Fideicomiso was set up to allow foreigners to buy prime Mexican real estate in the restricted zone in Mexico
– The bank acts as a Trustee
– You maintain complete control over the trust (operates like a Living Trust in the United States)
–A Fideicomiso gives you complete control over the property which allows you to lease, rent, mortgage, sell, improve and will your property
– The Fideicomiso only acts as stewards of the trust. The trust is the beneficiary’s property and cannot be used by the bank in any way.
– The trust is for 50 years and can be renewed for additional 50 year increments at any time. The cost is approximately $500 USD
– Each trust is guaranteed indirectly by the government
We recommend that non Mexican property buyers have title insurance for property transactions as it is seen as an insurance policy for property ownership. Title insurance companies can also be used as escrow agents which is the safest way to close the property transaction and ensures that all money is returned should the property deal fall apart.
Having a reliable real estate company in Mexico to help you organise all the official paperwork and closing costs. Typical buyer’s fees include a 2% acquisition fee, a 1% recording fee, a 1% notary fee and a$3,000 USD attorney fee
Buying property through the Fideicomiso can cost approximately$1,500 USD set up fee, $500 registration fee and a $500 annual fee there after.
Setting Up a Mexican Corporation
Most investors buy property in Mexico using the Fideicomiso but you can also set up a corporation if that is better suited to your needs. It is common to buy property through a corporation when your intention is to use the property for commercial reasons. You might plan to use the property in summer but rent or lease the property for the rest of the year. Also, buyers interested in multiple properties often choose this option.
Here´s some introductory information about setting up a corporation in Mexico.
– There are 2 main types of corporations in Mexico.
The LLC is a limited Liability Corporation and the LLP which is a limited Liability Partnership
– Foreigners can own, operate and manage Mexican corporations but none of the corporations investors can be Mexican
– a corporation in Mexico it has the legal capacity to buy property anywhere in Mexico, including the restricted zone
– There are no restrictions on foreign owned Mexican corporations who are dealing and developing in property so the advantages there are huge.
– The attorney’s fee is $1,500 USD to set up a corporation and there is an accounting fee of $100 per month thereafter
Approximate costs when buying property through a corporation are a $1,500 set up fee and a $100 a month accounting fee.
Punta Sayulita prides itself on it´s customer service. We feel that it´s the most important part of our business. Our experience has shown us that buying property, no matter where in the world, can sometimes be complicated, stressful and that often the legal expenses and responsibilities can set up roadblocks to buying that perfect property you have already fallen in love with.
Our team at Punta Sayulita will advise you every step of the way.