Baja California is quickly becoming an American hotspot for real estate investing and retirement as purchases have become more secure. Now that the fear is waning from potential Mexico property buyers, who wouldn’t want to take advantage of a market that offers real estate for about a third the price of its northern brother in the United States?
The Mexico market has been establishing itself with confidence as a viable investment and retirement destination since the beginning of the decade as major developers such as Trump International have created a worldwide buzz south of the border.
The article, “Plunging into Baja,” written by Ann Brenoff and published October 22, 2006 in the Los Angeles Times, provides answers as to why the Baja market is on the verge of a sustaining boom.
Yes, you can buy oceanfront property on the same coastline with views of the same islands (Coronado Islands off of San Diego) for a fraction of the price of property just 30 minutes north.
“And that alone was probably enough motivation for the 1.5 million Americans who own homes in Mexico today, according to estimates from the Mexico Assn. of Real Estate Professionals. The number is expected to jump to 12 million within 20 years as more baby boomers retire south of the border.”
In fact, last year a study conducted by the American Association for Retired Persons (AARP) concluded that Mexico ranked fourth in the world for most popularized American retirement destination.
The primary reason Americans are becoming more active in the Mexico market and Baja in particular is that financing has become more prevalent, streamlined and professional.
Many U.S. real estate companies are pursuing the Baja market by offering mortgages similar to the ones obtainable in the U.S.
San Diego-based Lyons Enterprises Incorporated (LEI) has developed a specific LEI Mexico division that does just this. With the help of its sister company (Pinnacle Realty) located in Tijuana, LEI Mexico is authorized to offer American investors or retirees 30-year fixed-rate mortgages in U.S. currency as well as 20-year fixed-rate mortgages in peso currency.
“‘Just use common sense,’ said Mauricio Monroy, a tax expert with the firm of Deloitte in Tijuana, speaking at a September conference at UCLA on buying in Baja. ‘Apply the same cautions you would have about conducting business in the United States.’”
Now that mortgages and loans are more accessible and user friendly, the security of owning Mexico property has been questioned as people revert back to horror stories they heard in the 1980s about the Mexico government confiscating land without warning.
These stories can remain in the history books as the fideicomiso has been implemented in just about every Mexico land and property purchase.
In laymen’s terms, the fideicomiso acts like a U.S. bank trust. The bank will hold the actual legal rights of the property.
“The beneficiary (buyer) has the right to occupy or rent the property, and can transfer the title to any legally qualified person. Beneficiaries can modify the property in accordance with local zoning regulations and receive the full appreciation on the property when it is sold.”
Fideicomisos have an initial term of 50 years and are renewable every 50 years after baring a mere $1,000 fee.
Mexico is safer and is providing a booming profit potential that is essential for investors as the American real estate market is enduring a long overdue correction. Mexico real estate will continue to grow in value as more people and developers become aware of the area’s financial possibilities.
Oh yeah, retirees seem to enjoy the gorgeous coastal properties at minimal prices as well.
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