Many foreigners own property and live in México...there must be something to it!

There are many misconceptions about ownership of real estate in México by foreigners.  There are also a few horror stories about foreigners that have had their property taken away from them.  Then there is the subject of Time Share or Vacation Ownership and where it fits in to the plans of someone who has decided that they want to spend more time in México.  We will briefly address each issue, although when you finally decide to take the plunge you will need to do your own thorough research.

Real Estate - Bienes Raices

The Mexican constitution prohibits foreigners from holding a direct title to any property within 60 miles of a national border or within 30 miles of a beach.  Any foreigner may hold direct title to real property in the interior of the country, in the same manner as a Mexican citizen.  Many foreigners who live around México City, Guadalajara, Laguna Chapala and San Miguel de Allende own their property with a title, just as any Mexican citizen.

So how do all of these foreigners hold title to their beach front properties?  Mexican law does provide for a legal instrument known as a "Fideicomiso" (Trust) which provides a legal substitute for direct foreign ownership in the restricted zones.  A Mexican bank holds title, in trust, for the purchaser who becomes the beneficiary of the trust.  This legal instrument gives you the same rights as direct ownership would, except that it is issued for periods of fifty years.  The trusts are renewal in perpetuity. As the beneficiary of the trust you have the right to use the property, rent the property (you must pay the proper taxes on rentals), improve the property, will the property to your heirs and to sell the property, as you see fit.  The trust has an annual fee associated with it and you must not use the property for illegal purposes. 

Its really pretty simple, many thousands of properties are held by foreigners with a fideicomiso, but you need to be well informed as to how the trust functions and your rights under the terms of the fideicomiso.  You will also need the services of a registered notary, and a working relationship with the bank who holds the trust.  This is where a good real estate agent can become very important.  As anywhere, do your research about agents, ask other local owners about their experiences, and most of all use common sense.  There is U.S. issued title insurance available for Mexican properties and a good title search, by an uninterested third party, can be invaluable.  ASK A LOT OF QUESTIONS!

Just because you think you would like to live in your favorite resort, or a particular city, does not guarantee that you are going to like living there full time.  Living in México has many rewards but the lifestyle and culture is usually very different form where you are now living.  Consider renting, in your favorite area, for six months or so to find out if the change is all that you thought it would be.  This also gives you the time to really get acquainted with the area, find some friends, ask a lot of questions and to really get to know the  local real estate market. 
Living in Mexico...read more. 

The Horror Stories

There are some horror stories of foreigners losing their property in México...most are not properly told by U.S. television or newspapers that seem to love to sensationalize this particular type of story.  Many of the stories relate to Baja California, in particular, the area around Rosarito Beach and Ensenada.  A relatively small number of  people that thought they were buying or leasing homes, lots or spaces in trailer parks have discovered that the people they originally dealt with were not the real owners of that particular piece of property.  When the real owner shows up and wants his legally owned property; guess what happens?  The same thing that would happen an any country with a decent legal system, the rightful owner gets his property. 

Stories like this are simple cases of fraud committed by one individual against another, it happens every day in every country of the world.  It gets more attention in the U.S. when it happens in México.  It is especially newsworthy when it happens in a small area, to a group of U.S. citizens.  If these people had not left their brains at the border and done the proper research, prior to exchanging any money, they probably never would have completed the transaction that caused their problems.  The very same thing happens in the U.S., to it's own citizens, and it never gets very much exposure from the press because it is not very sensational compared to most of the other crimes that happen daily.  Remember to USE YOUR HEAD!  Do the proper research and use the proper legal channels for any type of purchase or lease.  NEVER buy or lease any kind of property, in México, without the proper paperwork or transfer of title being completed by a Notario Publico and being duly registered in the local public registry.

Time Share - Vacation Ownership

Timeshare, or Vacation Ownership has gained a large following over the years.  This a favorite option for those that do not wish to invest a great deal of money or time into the ownership of a home or condominium.  In brief, time share gives you the right to use of a resort property for a specific number of years.  One major benefit is that you are usually allowed to trade your time, in your resort or property, for the same amount of time in another property in a completely different location.  There are several companies that specialize in theses trades.  There is even a company that specializes in trading land based time for a vacation on a cruise ship (sometimes your time may only cover the partial cost of a cruise),

The different forms of acquiring these rights are too numerous to list here.  You purchase a few days, a week, two weeks and sometimes more, in a particular resort.  There are plans where you receive the right to a specific unit for a specific time period and other plans that allow you to use a unit of a particular size, at a time of your choosing.  There are some time share properties that have a program where they sell the the project at a specific date in the future and divide the proceeds, after costs, among the members.   There are many variables and the costs involved differ greatly from project to project.  Again, it is very important pay careful attention to details, ask a lot of questions and make sure that program you are considering meets your particular needs.
Time share in Mexico...read more.