MYTHS OF MEXICAN REAL ESTATE

1. Foreigners can only lease real estate in Mexico
2. The Mexican government might take away my land
3. The Mexican real estate boom is over
4. Political instability and Mexican economy make investment in Mexico unsafe or at least unwise
5. Mexico is unsafe for foreign

Foreigners can only lease real estate in Mexico

This is one of the most widely spread pieces of misinformation in this issue. In truth, this has never been the case. Obviously, it is possible to do so if you wish, but it has never been a legal limitation placed on property held by foreign interests. In fact, in 1993, in order to make its real estate more attractive to foreign investor Mexico passed laws protect such investors by allowing us to own property in the Restricted Zone – this is the area within close proximity to any beach or any border wherein direct foreign ownership of land is prohibited – through a bank administered Mexican Real Estate Trust. This is a very simple structure, very much like the Asset Protection Trusts many of us are establishing to preserve the integrity of our children`s inheritance, wherein a Mexican Bank – most of which are now owned in whole or in part by large European, Canadian, or US Banks – holds the property in trust with the foreign investor as sole beneficiary. This relationship provides the investors with all of the same rights of use a disposal as they would enjoy in their own countries. Perhaps the confusion about “land leases” arises out of the requirement to renew the trust every fifty years. This is a very simple procedure and is protected under the law. The trust can be renewed in this manner indefinitely, and automatically transfers to your heirs.

top

The Mexican government might take away my land

While it is true some foreign investors have been sold land that was not legally available for such investment, and subsequently found that they were required to vacate said land, this is not the case if one deals with legitimate real estate and legal professionals. The Mexican government has been doing everything it can over the past fifteen years to promote both tourism in general and foreign investment in Mexican real estate in particular. Foreign investment, in both tourism and real estate development, is now the second largest contributor to the Mexican Gross Domestic Products, directly behind oil revenues and, unlike oil resources, foreign investment in Mexico is both rapidly growing and infinitely renewable.
As can logically be expected, the Mexican government is making all necessary moves to zealously protect this important revenue stream, and continues to strengthen the real estate laws to provide even greater protection for foreign investors. The proof of this is that many major international financial institutions are now entering the real estate market in Mexico to provide development, construction, and mortgage lending under terms comparable to those currently being enjoyed elsewhere. In addition, leading Title Insurance companies, such as Stewart Title and First American Title, are now offering title insurance policies on Mexican properties.

top

The Mexican real estate boom is over

Nothing could be further from the truth. While current values are not increasing at the same high rates they were during the past five years – mostly as reaction to the lending crisis in the US and subsequent downturn in the US economy – the future continues to look extremely promising. Of course, it will always remain the responsibility of the individual investor to make sure that the property in question is a “good” investment. This is no more difficult to accomplish in Mexico that it is elsewhere. Using established experienced real estate professionals and competent legal council – not to mention a title ”common sense” – will provide the same kind of protection in Mexico that it does anywhere else. As for Mexico`s future as a vacation, retirement and investment opportunity, one need only a look at the many initiatives currently undertaken to provide the services and amenities needed to continue to attract such interest. Massive capital expenditure on basic infrastructure such as water and sewage treatment plants continues to be a major part of the Mexican Government`s plan. Add to this modern airport, marinas, golf courses, highways and health care facilities and you can understand why Mexico remains one of the best potential investment locations in the world.

top

Political instability and Mexican economy make investment in Mexico unsafe or at least unwise

Mexico is experiencing a long and sustained period of economic growth and increasing prosperity amid a climate of political calm. In 2006, Mexico elected President Felipe Calderon, a pragmatic Harvard educated politician, whit a mandate to continue Mexico`s “business friendly” economic policies. During his first year in office, he has built consensus in the Mexican Congress and quelled most political dispute by taking the lead on solving some of Mexico`s most pressing social issues. As a result, Mexico is experiencing strong job growth and managing to expand its economy at a rate of 5% per year, with a comparatively low rate of inflation. It has also avoided munch of financial woes currently being endured in the US, due to its much tighter consumer lending standards and practices.    

top

Mexico is unsafe for foreign

This is one of the most difficult myths to truly understand. As a consequence I would like to respond to this on a personal level. Mexico in general is no more unsafe that any place else that I can think of. Still, this is a foreign country, with a language and custom that may be confusing to someone without prior experience in them, and this can cause problems, especially if approached through a Margarita fog. If the usual precaution are taken, and by this I mean the same kind of attention and awareness as one would use in any Canadian or US city of any appreciable size, there should be no more risk to anyone than would exist in those location. Except, of course, the risk of sunburn.   

top