Q: Does Yucatán have public sewage?
A: Every property whether a business or a private home has its own septic system. These natural waste disposal systems are essentially giant concrete tanks buried somewhere on your property. They require little maintenance, but as the owner of the property you will want to know its location. An engineer or even a plumber can tell you where it is, if you do not get the information from the seller.
Q: Is the water safe to drink?
A: Most of the water throughout Yucatán is billed as potable (drinkable); still, most people choose to drink bottled or filtered water (Just like Los Angeles!). The simplest and least expensive option is to have bottled water delivered to your home. A more expensive initial investment, but more economical in the long term, is to have a filtration system installed. Reverse osmosis systems are the standard, and larger industrial versions are used by every major hotel in the peninsula. Most of the homes on this website have this system.
Q: Is purchasing a property in Yucatán a good investment?
A: This depends on several factors, but the easy answer is "yes." For instance, many people who have made the most money simply went with their instincts that told them if they liked the house and made improvements, someone else would probably do the same. What this means, though, is that the market of potential buyers may be more limited. This is not a huge tourist resort like Cancun or Acapulco, so the "turnover" is not as quick or as high-priced, generally speaking. Of course, the initial investment is much less as well. In the past 5 years, properties have averaged a 15% increase per year. Restored or improved properties, of course, stand to profit much more.
Q: Can I build a pool on my property if it doesn't already have one?
A: Yes. It is done every day. Whether a house has a pool is one of the first questions real estate agents get about a prospective home. Blasting for pools with dynamite is now thankfully illegal in the historic center, but the time-tested method of picking away at the limestone to create a hole in the ground for a pool is still utilized. A swimming pool is a wonderful addition to any home here, and can be enjoyed year round, making the investment pay off very well. However, it is wise to check with an architect or engineer about how the pool of your dreams will integrate with your specific property. You will want to locate it away from the septic tank, and to avoid the root system of any large trees. Further, a new law restricts building a pool closer than 1 meter from the property line of your neighbors. All of these issues are manageable but probably will require professional advice.
Q: How long will it take to close on my property?
A: The fideicomiso process takes an average of four to six weeks. Getting all of the other necessary paperwork together takes anywhere from four days to four weeks. Setting up a corporation can take four weeks. From start to finish, the average time to close on a property for a foreigner is six to ten weeks. Some of the oldest homes have perhaps never been sold, so gathering the necessary paperwork definitely depends on a number of factors which can't be known from the start.
Q: Are banks reliable in México?
A: Very reliable. Perhaps a surprise to most "gringos" is the fact that México currently enjoys one of the world's most stable currencies; further, most banks are branches of worldwide banking institutions, or have associations with them. Banamex, for example, merged with Citigroup two years ago. Most banks in Mérida offer full-service accounts and investment avenues.
Q: What will my monthly expenses be?
A: Are you paring down or ramping up? It is possible to live very inexpensively in Mexico; it is also possible to live lavishly. It all depends on your lifestyle. Generally, a cleaning person will earn around 150 pesos per day; a gardener with credentials will earn around 250 pesos per day. Telephone and Internet charges are on a par with Europe and the USA; electricity is about 10% more expensive on average than Europe, the United States and Canada. Water is almost ridiculously inexpensive, as are property taxes.
Q: How much are taxes?
A: This is the good news. Real estate taxes are currently running at about 0.1% of the home's value per year. As occurs elsewhere, the "value" of your home is determined according to an official government appraisal that typically is significantly lower than the true market value.
Q: How long will it take to renovate my home?
A: This depends on the extent of the renovation. We have several well-respected local restorers who will be happy to show you their work. In addition, you can actually meet the homeowners and ask them directly how long things took, and what you might expect for your specific job. The answers are as different as the homes themselves.
Q: Can I find good quality appliances and fixtures for my home here? Will I get a warranty?
A: Absolutely. In the past three years, more and more high-quality appliances with major brand names have become available in Yucatán. And in fact, many major appliances manufactured in México are made by divisions of companies based in the United States or Asia, including high-end manufacturers.
Q: Are there any legal restrictions on what I can do to my property?
A: In some cases. The city of Mérida and specifically the zone known as Centro Histórico does impose legal restrictions on the homes in order to maintain the authenticity of the city. You can learn more about these restrictions by speaking to local restorers as well as inquiring with INAH (Instituto Nacional de Antropología e Historia) the governmental agency in charge of the country's national treasures. However, if you build or renovate outside the city limits a hacienda or beach home, for example these restrictions do not apply.
Q. Do you have information on title insurance?
A. Yes, Stewart Title Latin America: http://www.stewartlat.com Many people decide not to pursue title insurance when they understand the strict and thorough process of the fideicomiso... it basically acts like title insurance because while the bank is uncovering all the details of the property they make absolutely sure that there will be no surprise people popping up from the past claiming ownership of the property. Still, it is certainly available and we are glad to recommend folks who can provide it.
Q. Is the address on an Offer to Buy Contract correct? Do we use that address only or is there a legal description, means and ways or other ways of describing property location? Do we need to survey the property?
The lawyer does all of this in conjunction with the trust bank. In the past many of the homes we sold had NEVER been sold! Or they had not been sold in the last 40 or 50 years, so new measurements were always needed. The fideicomiso and your “escruturas” (writings) will show the property exactly as it is, including where it is located within the designated city block. All of this and everything else will be given to you at the closing, but if you or anyone else wishes to see it beforehand it can be arranged.
Q. What happens if the bank gets into financial trouble or burns to the ground. Are there procedures in place? Can the bank use the property as an asset?
A. The Mexican bank only holds the title in your name, it is not an asset of the bank, it is yours as a foreign owner of Mexican property. You are able to sell the property, rent it out, or will it to your heirs. Scotiabank Inverlat is a Canada-based worldwide financial institution with hundreds and hundreds of branches throughout the world, they are prepared for any contingency. All banks would operate similarly.
Q. Do you have any suggestions on how to manage the house as an English speaking absentee landlord. How do I pay bills, get vendors etc? It seems that it would be preferable to have one English speaking property manager.
A. Individuals who are trustworthy and have been managing gringo houses for years and years are available, or there are also several new companies which can do anything from checking in on your house once in a while to managing the home as a rental property. I have names of any type of manager you would like to interview, most are long-time friends of mine.
Q. Is there any reason to get a local bank account?
A. If you were going to spend over a month here at a time it might be a good idea... the only thing is that to open a bank account you would need to have a valid FM3 Visa to do so. Most management people and companies could be paid in cash or wire transfer for their services. One does not need a Mexican bank account to purchase a home in Mexico.
Q. Can I use a US mailing address for correspondence?
A. For the management companies I’m sure this would be fine, a Mexican bank will need a Mexico address though. There are companies which can forward your mail to you here in Merida.
Q. Later on, can I change the way we take title to a corporation, is it a difficult or expensive process?
A. It is not that difficult nor expensive, but everything’s relative! You may own property as a share holder of a Foreign Owned Mexican Corporation. It costs around $1500.00-USD to create a Mexican Corporation and legally register it with various governmental entities. You will need to incorporate under the laws of México and report your corporate earnings through an accountant (accountant fees vary between $50-$150-usd a month). The corporation requires a minimum of two live, individual share holders, that are at least 18-years of age. The principal officer of the corporation is required to have an FM-3 Visa. You can apply for the Visa yourself at the Mexican Immigration office (expect several return visits - they do not speak English) or you can hire an attorney to handle the process for you. It will cost around $500.00-usd. If the property you wish to purchase is larger than 2000-square meters you may want to incorporate. You also may want to incorporate if you are going to be operating a business. Having the house with an existing fideicomiso is a good selling feature when you are ready to sell, something to keep in mind.
Q. How bad can the hurricane season get there?
A. This is a hurricane-prone area, being flat and basically in the Caribbean Sea and the Gulf of Mexico. Even so, we have only had five bad hurricanes in the last fifty years. The city of Merida experiences many many fewer storms than they do on the Caribbean side, and fewer even than the beaches north of town. All in all, there are significantly fewer hurricanes than are experienced in Florida.
Q. What are the people like as far as foreigners purchasing properties? Do they accept us pretty well?
A. My experience has been overwhelmingly positive regarding being accepted here. Of course I strive to learn the language, learn the customs, and generally appreciate where I am in the world. I do not try to make them do things my way, and I try not to bring my New York expectations to business transactions. Most people I’ve spoken to are more amazed that we would want to live here than annoyed in any way.
Q. Is there a big concern in regards to crime?
A. Merida is officially the safest city in Mexico, always neck and neck with Aguascalientes for the title of safest! The crime of the larger cities of Mexico and the US have not made inroads here.
Q. Are there good health care facilities?
A. Among the best available anywhere. Merida is the place where everyone from the whole peninsula comes for healthcare. We have many hospitals and most are state-of-the-art. Most doctors have studied in Mexico City at prestigious medical schools, and many also have studied and/or worked in the US.
Q. From what I read, foreigners can not own the property, is that correct?
A. Please see the section on Owning Property. Foreigners may own property within 50 kilometers of the beaches, and 100 kilometers from the borders only through a fideicomiso trust, held by a Mexican bank. (or through a Foreign Owned Mexican Corporation, see the Owning Property section) The Mexican bank only holds the title in your name, it is not an asset of the bank, it is yours as a foreign owner of Mexican property. You are able to sell the property, rent it out, or will it to your heirs.
Q. I would need to learn and understand the laws and find a good person to represent me, someone I could trust to be there with me to make a transaction such as this.
A. We have many great lawyers we can whole-heartedly recommend. Most have decades of experience with real estate transactions for foreigners. Each is a trusted partner in our venture, not meaning kickbacks, not meaning insider trading, not meaning anything sinister... we recommend them because they are consummate professionals able to deliver results, speak excellent English, are able to communicate EXACTLY what is going on each step of the way, charge fair prices, and are pillars of this community But the key word here is recommended... if you or any other client would like to use ANY other notario, including the other professionals we use on a regular basis, that would be just fine and we welcome it. We receive no compensation from anyone we deal with... Mexico International and the luxury unit Hacienda Mexico has a sterling 12 year reputation of selling homes and properties in the Yucatan peninsula and none of our team would EVER jeopardize our future for a quick profit or underhanded dealing.
Q. Are the prices pretty firm? Would it be an insult to make an offer?
A. Both Hacienda Mexico and parent company Mexico International strive to put a realistic pricetag on each of the homes we represent. You can be assured that each home price has been discussed at length before it is published on our websites. With that said, one never knows the mood of the moment, some people might be open to negotiations, others not at all. We usually do a verbal offer the first go-round to get a feel for the pricing, then make it real with a formal written Offer to Buy contract once the price is finalized. It is “just business” to make an offer and shouldn’t be taken as an insult, but as we all know emotions run high during the buying and selling of a home anywhere, and doing it in a foreign country only adds to the high drama.
Q. What is required as down payment?
A. The standard is that we always ask for 10% of the purchase price within 5 working days of the signed contract, this money will go to the Earnest Money Account in Colorado, USA, with the remainder to follow later just a day or two before the closing.
Q. What's the average interest rate to finance?
A. This obviously fluctuates with the markets, please contact any of the financial institutions for their best rates. (We have had exactly ONE deal done with financing here in Merida in the last 12 years.)
Q. What is the water source?
A. Yucatan is sitting on one of the world’s biggest and best limestone aquifers. If you have seen pictures of, or actually visited any of our stunning cenotes (underground river caves) you can get the idea of how much beautiful fresh water we’re blessed with here. None of it is visible from the surface, and that’s partly what keeps them so pristine. Merida and the beaches nearby have city water available, further out water is trucked in. Also, nearly every private house in Merida has its own well tapping into that porous aquifer.
Q. What is the electrical soruce?
A. In Merida, all homes are on the electrical grid, and at most of the beach areas as well. Many at the beach have back-up generators in case of emergency someday. Most homes are equipped nowadays for 220 volts.
Q. Is there any hidden damage or any repairs that are needed to the homes that do not show in the photos?
A. There are no real rules when it comes to wiring... many homes have perfect wiring systems, others do not. Each case is different, but most of the homes we represent have very good wiring, or in the case of a ruin, will need it put in. Inspectors are available, or merely hiring an electrician for the afternoon... but the bottom line is that most repairs can be done for very minimal cost... a fraction of what it would cost in north America or western Europe.
Q. Are foreigners considered “fair game” in this peninsula?
A. No. Of course there are always rouge people anywhere who are not up to snuff, but the fact that we and parent company Mexico International has been selling hundreds of homes to foreigners for the past 12 years dispels that myth. We do not have in Merida the new construction condo towers that exist in other towns... almost every sale is a private home or piece of land from one individual to another individual. I have never heard of even one case of “gringo-abuse.”
Q. I’ve heard that I should be very cautious and wary.
A. Great advice for anyone investing in anything anywhere to be cautious!! But “wary” implies a sinister underbelly of criminals out to take all your money or force you to buy something you don’t want, and that is untrue. As far as being treated fairly, I have not once been treated unfairly here in Merida, quite the contrary actually. The people of Merida are the number one reason I make this place my home.
Q. Is it difficult to get to Merida?
A. I think an hour and a half flight from Houston isn’t too bad to get here! I would not call flying to Leon or Mexico City and then driving or riding to Guanajuato or San Miguel for four hours easier or cheaper! Also, San Miguel is an absolutely beautiful town, but it is a cute little mountain town, whereas Merida is a city, with symphony performances, lots of good shopping and dining options, high quality medical services, and much much more. San Miguel de Allende is so charming, but has kind of become a Disneyland of Mexican themes, and half the population is Texans by this point! Everyone must decide where is the right place for them, and all cities and towns have great points and bad points, it’s up to the buyer to decide where they might like to have a home. We’ve had many people decide on this area because of how cold and dry it is in SMA... and for others that is just what they want.