retiring in mexico

How Much Money Do I Need to Retire in Mexico?

Although the Mexican border has been taking heat for the large migration of undocumented immigrants entering the United States, there has been a large migration of Americans relocating and retiring in Mexico. The reason for this being the better weather, new experiences, and relaxed lifestyles that they will find as they head south into Mexican territory. These expats also enjoy access to affordable and quality healthcare and a lower cost of living. Mexico is a popular destination because it offers all this – plus its close proximity to the US makes it easily accessible and cheap to travel between to visit family and friends.

One of the first things to consider when deciding to live abroad is the cost of living in that country. Below, we take a quick look at how much money you might possibly need to retire comfortably in Mexico.

 

Lifestyle Determines the Amount of Money You Will Need

 

retirement-cost-in-mexico

 

No matter where you retire, the way you retire greatly affects the amount of money you will need to do it. It is completely possible to retire on a fraction of a salary of what you would receive in the United States in Mexico. For instance, if you are willing to live modestly in a small apartment, eat at home, and sacrifice some of the comforts you may be used to back home you could save tons of money. Contrastingly, you could easily spend $15,000+ a month living in an exclusive beachside community while participating in expensive leisure activities, fine dining, and travel.

Most people who retire abroad fall somewhere in the middle between lavish living and budget consciousness. In order to achieve this in Mexico, a retired couple might be looking at the following monthly costs. Keep in mind that this level of budget in Mexico permits renting a house with three-times-a-week maid service and a weekly gardener:

These numbers are based on estimates on the website www.internationalliving.com.

For about $2,175 a month, or about $26,100 per year, a couple could retire comfortably in Mexico. With the peso hitting record lows, Americans can take advantage and stretch their retirement budget even further. Take for instance that the average monthly benefit for retired workers is $1,341. For a couple receiving that amount, this adds up to $32,184 each year – just enough to cover this budget.

Of course, retirement costs vary depending on each person, and your costs could be lower or higher than the estimates stated depending on your situation and lifestyle choices. Also remember these estimates don’t include expenses such as traveling to/from your retirement destination, moving costs, taxes, or emergencies.

 

More Ways to Save

Another way to save is through Mexico’s retirement benefits program. You are eligible for the Mexico’s Personas Adultas Mayores benefits program if you are 60 or older and have a Mexico resident visa. This program provides discounts of 10% to 50% off full price for a variety of services, including healthcare, cultural activities, transportation, and hotels.

Another important way to control costs is to shop at the local food market and learn where you can buy things at the “local” rate instead of the “tourist” rate. It is easy to forget that you’re not vacationing and you can easily burn a hole through your retirement funds if you are not careful.

 

Wrapping it Up in Mexico

Retiring in Mexico is a good option for those looking to adventure through new experiences and cultures, wanting access to affordable healthcare, or looking for a lower cost of living. Life outside the U.S. can create a culture shock so it is helpful to have an open mind and be adaptable to fully enjoy and appreciate the experience.

Also, visas, residency requirements, and taxes can be complicated as an expatriate so it makes sense to work with a qualified attorney and/or tax specialist when making plans to retire outside the United States.

Otherwise, we hope this has been informative enough for you to make the plunge into the crystal clear waters of Mexico!

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Why Retiring in Mexico Will Be Your Best Decision Ever

Looking for a place to spend your retirement years in blissful relaxation? Mexico just might be the perfect place for you. For over a decade, this South American country has proven that it offers the easiest transition to expat life, consistently making it to the list of top retirement destinations in the world. It has bagged the number one spot for the fifth time this year, further cementing its title as the best place to retire. Here are some of the reasons why.

  • Low cost of living. Expats can get by with as little as $1,200 a month. With the weakening of the peso against the dollar in the recent years, this amount is expected to go lower. Now, you can spend your money on other things, like putting up a business or buying properties.
  • Quality healthcare. Every major city in Mexico has a first-rate hospital, staffed with medical personnel who has had some training in Europe or the United States. Also, you do not need to have insurance to get treatments; medical care is cheap in Mexico that you can pay it in cash.
  • No language barriers. Many people think you need to learn Spanish to live in Mexico, but English is widely spoken throughout the country, particularly in popular tourist spots and expat communities. Thus, newcomers can easily communicate and fit right in.
  • Close proximity to the US. Those who plan on living part-time in Mexico will love the fact that the US is just a few hours away. Driving or flying home is convenient and cheap, with airline tickets costing as low as $200. This makes it easy to escape the cold winters of the US and soak up some sun down south.
  • Flexible weather. With the diverse selection of climates in the country, retirees will not have a hard time finding the perfect place with the right weather for them. Expats can choose to live practically anywhere, from spring in the highlands to summer on the beach.
  • Numerous retiree benefits. Legal residents aged 60 and above can get discounts on bus and airline tickets, as well as medical care, museum entrance fees, and more. Permanent residents with an INAPAM Card are given additional discounts that can go up to 50 percent.
  • Friendly locals. Naturally welcoming and friendly, tourists and expats will not have a hard time interacting and befriending the locals. They are warm and genuine, and would never hesitate to give you any kind of assistance, making your new life in Mexico a little easier.

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Mexico might have had built itself a bad reputation over the years, but there are actually areas in the country that boast all the features and amenities a retiree is looking for. Whether you are looking to experience exotic culture or a first-class lifestyle, you will find it all here. Look for the perfect property for you in CaboCribs.com now and be a part of the 1 million Americans who now proudly call Mexico their home.

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5 Tips for the Best Winter in Cabo San Lucas

Mexico might have had a reputation of being too dangerous for Americans, but there are still areas that boast a robust tourist life. Aside from the popular Riviera Maya, Tijuana and Ensada, there is Cabo San Lucas. Just a few hours away from North America, Cabo sits at the tip of Baja California. It is home to some of the best seafood and ocean fun in Mexico. If you do decide to escape the cold for a sunny winter this year, here are some tips to make your vacation the best you could possibly have.

  1. Avail of the all-inclusive options many resorts in the area offer. For as low as $50, you can already enjoy all you want to eat and drink while you relax in paradise. This one-time payment saves you from tipping, currency conversion charges and bar tabs.
  2. Experiencing a foreign culture can be hard if you do not understand what the people around you are talking about. At least a month before the trip, download a language app that you can play during your downtime. This way, you can chat up and be friendly with some of the locals.
  3. Because of its location right at the tip of the continent, Cabo is home to fresh seafood and the best sport fishing in North America. Once there, make sure that you get a taste of their local guacamole, and several of their lobster and Dorado recipes.
  4. Set aside time to go out of your resort and stroll through town for some handcrafted hats and shirts. Also try out the local restaurants serving ceviche, seafood recipes and cerveza. Several excursion companies run affordable deep sea fishing, ARV and watercraft tours.
  5. Resorts in the Pacific Coast do not allow swimming in the seas because of the big waves. Thus, pick a resort in the side of the Sea of Cortez. You can also just take a short walk from the Pacific side to the Medano Beach where it should be much safer to take a dip.

There are still so many exciting things that await you on your trip to Cabo San Lucas.
winter

Ask a tourism officer in the area, or just chat up and get friendly with a local to help you make the most of your vacation. Pack your bags and book a ticket now. This just might be your best trip yet.

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What are the Rights of a Foreigner While in Mexico?

Anyone who is a foreigner in any country is bound to feel some amount of uneasiness, particularly when they are faced with a legal problem, conflict with the local citizens or altercation with legal processes or authorities. The same holds true for foreigners in Mexico. Read on as we give the basic information about your rights while in Mexico, along with what to expect with your foreign status.

The Immigration Law states that the immigration policy of Mexico is to secure full respect for the human rights of domestic, migrants and foreign, regardless of age, gender, ethnicity, immigration status and nationality. Special attention is given to vulnerable groups like seniors, teenagers, children, women and indigenous. Should the foreigner be accused or found guilty of any unlawful act, their undocumented immigration should not create any prejudice.

For those who have any interest in Mexico, whether it is an investment, business or family in the country, the state should also guarantee that the acquired rights of immigrants is recognized. Free transit throughout the country is guaranteed equal to any national, as well as access to education, medical and other public services, regardless of their immigration status. Civil actions cannot also be denied by authorities, particularly in marriages and granting of wills.

One specific right of a foreigner that is not exactly well known among Mexican authorities is that an interpreter should be provider for them if they cannot speak or understand Spanish. And should there be any legal judicial processes against a foreigner, authorities have to inform the foreigner of any international agreements or treaties when it comes to the transfer of prisoners, along with any other piece of information that may benefit them.

Now, what are the main obligations of foreigners during their stay in the Mexico? The law states that immigrants should comply with these obligations: protect their immigration status documents; show documents proving their identity and immigration status when needed; give personal data when requested by authorities; and other obligations stated in the Constitution, Act, Regulations and other pertinent provisions.

We hope that the concepts we showed above has given you a clearer view of the most common doubts of foreigners in Mexico. Keep them in mind as they will come in handy on your next trip to Mexico. If you have any specific case or particular question, do not hesitate to consult an immigration expert or the Mexican immigration authorities.

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Real Estate Sustainable Views in Los Cabos

Real estate sustainable views in Los Cabos is achievable in four simple steps. Let us share our expertise so you can avoid decision errors that can possibly bring disappointments in the future. On our previous post, we talked about Los Cabos zoning. If you haven’t read it yet, please check it out to have a better understanding of the topic. It will give you an idea of how important the following is: know about the different zoning types and how to maintain real estate sustainable views in Los Cabos.

Tips on How to Obtain Real Estate Sustainable Views in Los Cabos

See the View by Being Close to the View

Real Estate Sustainable Views in Los Cabos AT0 zone near waters

Hacienda Beach for $5,700,000.00

Perhaps this is the most effective tip on obtaining a sustainable view. If you want to avoid getting your view blocked, you can get a property that is close to the water. Beachfront real estate properties are the best! Avoid hassles from developers who decide to build a hotel or condo on the vacant land in front of your view. There will be no vacant land. it will all be sand and water.

Nobody can possibly build on the water, right? Not unless a huge corporation decides to cover the water with an artificial land. It is highly improbable for this to happen but it is definitely possible; a huge corporation can turn the water into lands as long as they find a cost effective way to do it. We’ve seen it in Dubai where they built the Burj al Arab Hotel. There also another example in the Philippines. They built one of the largest malls in Asia, the SM Mall of Asia.

Your best way to get real estate sustainable views in Los Cabos is to stay close to the waters. It may be more expensive than others but it is a guaranteed solution.

Away from the Water, Start to Know Better

Not everyone has the budget to get a sustainable view near the water. Not everyone is willing to take the risks of living close to the sea. If you plan to get a location away from the waters, you should start educating yourself about the location of the property. You must think about all the aspects and factors that can possibly affect the view in the future. We suggest you start reading and digesting information about the zoning all throughout the Los Cabos Municipality. Generally, if you see a vacant land on AT0 zones (zones close to the waters) it is possible for developers to block your view with 6-story buildings. On the other hand, if you see a vacant land on RT0 and RT1 zones (residential zones farther away from the waters), it is possible for developers to build 4-story buildings.

Another thing you should look into is the requirements for developers to build a new building. If there is a development oversight on the property location, you should also know more about it so you can fight for it in the future. There are areas in Los Cabos that have building height restrictions to avoid view destruction. Some locations are Cabo Bello, Pedregal, and Palmilla. Other areas even restrict adding terraces and other features that can potentially block a view. The good thing about these requirements is that they can be obtained in both English and Spanish.

Get an Ethical and Trustworthy Real Estate Professional

Real Estate Sustainable Views in Los Cabos AgentNow that you already know some basic information about zoning in Los Cabos, the next thing you must do is to find a real estate agent, realtor, or better yet, a broker! Inquire and ask questions about the location and do not be afraid to ask about zoning rules.

You can ask many real estate professionals and decide who is the most ethical and trustworthy. You should use your best judgment in weighing if everything is just to make a sale or if the professional is there to provide genuine help and service. It pay to be wary when hiring a real estate professional!

Red Flags

Real Estate Sustainable Views in Los Cabos Red FlagsIf the professional you are dealing with says something different from what you have read, ask more questions and clear things up. Of course, use the data you already know and inquire to avoid confusions. There may be updates about zoning rules you need to know. Please diligently ask about what confuses you too. Some red flags to watch out for are the following: if the professional tells you that the highest building that can be built on the vacant land is 1 to 3 stories only, if the professional refuses to share full disclosure about the zoning in the area, and if the professional avoids the topic and chooses to say nothing about it.

Another red flag is when the real estate professional shares careless reasons that the land is owned by the city or the natives who will never allow developers to build on the land. First, nothing is permanent. The land can be sold in the future. Second, it is always the zoning that matters and not the person who owns it. Once the land is sold, you will not have any say or control on what the developers build. It is better to know about the zoning in as early as now.

If the real estate professional tells you not to worry about the vacant land because it is specially zoned and protected, get a lawyer and verify if the facts are true.

At the end of the day, you must get a real estate professional that is not only knowledgeable about zoning but is also not afraid to acknowledge the risks zoning rules

Make an Offer Based on Facts and Risks

Once you have gathered facts and risks, you should make an offer based on the probability of losing the sustainable view of the property. If you see that the probability of losing the picturesque ocean view is high, include your facts on the offer and ask for a lower price. If you do lose the view sometime in the future, at least, you paid for a more reasonable price. Give yourself a pat on the back as you did your part well prior to your purchase. There is not specific rule or law that can protect all views right now so better know what you are getting into. Once it happens, you already know the fact and have long accepted it could happen.

Real Estate Sustainable Views in Los Cabos: Conclusion

We strongly believe that real estate sustainable views in Los Cabos should have a zoning reform or a sight-line protection. For the meantime, we suggest all buyers to practice diligent in their purchase, especially if the property offers a good view of the ocean. All efforts to avoid disappointments in the future must start from the buyer. You must refuse in buying a property if you see that the view is not sustainable. If you do get the property, make sure to get a better price based on risks.  If you have more questions about owning a property in Los Cabos, you may call us at +1-310-860-6063 (US) or +52 1 624 688 6841 (Mexico). Are you ready to find out how you can enjoy life to the fullest?

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Los Cabos Zoning

Los Cabos Zoning is an important factor any real estate buyer should consider before buying a real estate property. Why? Well, let us answer your question with another question to better understand its significance. Would you pay and arm and leg for a property with a beautiful view and regret every ounce of your decision in the future when the beautiful view gets blocked? Not at all right? As you may already know, Los Cabos is one of the fastest growing retirement vacation destinations in North America. This only means that developers can build buildings, hotels, resorts, condos, and numerous more in the future and potentially block your valuable view.

Let’s dig deeper into the topic. A good way to start is to understand the terms.

What is a Sustainable View?

A sustainable view refers to whether or not the zoning and development of the land between your property and your view will change.  It is a matter of whether you will be able to retain the beautiful landscape view visible from your property for a lifetime. A property with a picturesque view will surely be more expensive compared to other properties so you better be aware of the rules. In the end, it all boils down to one question. How long can you sustain the view your property offers?

What is Los Cabos Zoning?

Los Cabos Zoning Map Transpeninsular Highway

Credits: Cabo

If you specifically want to get a property with a great view, you should be looking for AT0, RT0, and RT1 land zones. AT0 means Turistico Hotelero or Tourism and Hotels. A land classified as an AT0 land zone is located from the water to the trans-peninsular highway in Los Cabos. On the other hand, RT0 means Residential Turistico or Residential and tourism. Generally speaking, the south of the highway is AT0 while the north of the highway is RT0. Lastly, RT1 is similar to RT0. However, this type of land zoning only applies to the Pedregal area and Land ends.

What are the Top Reasons that Can Change your View?

There are four main reasons that can lead to blocking your view: when developers use empty lands to build new homes in gated communities, when developers meet requirements and use vacant lands to build four to six stories of hotels and condos, when the current owner of the land doesn’t allow tall buildings but gets paid off, and when politicians change or reclassify zoning laws.

How Can I Prevent Los Cabos Zoning Changes that Can Potentially Block my View?

If you see an empty land on your view, consider it as a threat to your sustainable view. Always talk about this with your developer or share your thoughts with the home owners association.  Perhaps, you can also use this threat to get the price of your property at a more agreeable value.

Since you already have an idea on land zoning types in Los Cabos and you know the possible reasons that can change your view, you should also get a full map so you can instantly see what can possibly happen to the empty areas in front of your property. Bear in mind that developers can build up to 6 stories of hotels and condos on empty AT0 areas. On the other hand, developers can build up to 4 stories of hotels and condos both RT0 and RT1 areas.

Conclusion

We have seen many cases of blocked views on different types of properties. In fact, it happens a lot in Los Cabos. Unfortunately, there is no law or any form of protection for owners to maintain an expensive but spectacular view. As long as developers follow the zoning rules, they will be able to build more buildings to generate profit.

In El Tezal, the Tramonti project blocked the views of high-end homes in the Hermitage. A huge hotel in La Jolla San Jose is now blocking the views of many residents. At the end of the day, there is no secret formula that can maintain a view, you simply have to be diligent about Los Cabos zoning prior to buying your property. The most effective way for you to avoid disappointments in the future is to practice diligence and patience. Do not poke the price bear!  We’ve seen it happen quite a lot and we do not want it to happen to you. If you have more questions about owning a property in Los Cabos, you may call us at +1-310-860-6063 (US) or +52 1 624 688 6841 (Mexico). Are you ready to find out how you can enjoy life to the fullest?

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Things to Know Before Buying Real Estate in Los Cabos

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Things to know before buying Real Estate in Los Cabos needs to be clear to be able to make an informed decision for your purchase. Here is a brief guide for the most important things you must know.

11 Things to Know Before Buying Real Estate in Los Cabos

Tips Things to Know Before Buying Real Estate in Los Cabos

Who are the parties involved in a Real Estate Transaction?

The Estate Transaction involves the following parties: the buyer or legal representative, the seller or legal representative, the real estate company, the closing agent, the escrow agent, and the notary public. The following organizations will also be involved in the transaction: the bank, the appraisers, land offices, and public registry offices.

What is a Fideicomiso?

Fideicomiso is a law that allows foreign citizens to buy a property within the restricted areas of Mexico. Restricted areas are Mexican lands that are within 50 kilometers from the coast or 100 kilometers from the border. Fideicomiso functions similar to Living Trust in the USA where the buyer or the owner becomes a beneficiary of a trust for the next 50 years. It is not a lease, a concession, nor a right to use. You will enjoy certain privileges in ‘fideicomiso’ that these things to not offer.

What happens after the 50 years expiration of my Fideicomiso?

After 50 years, the trust permit expires. There is no risk of losing the rights over the property, though. All you need to do is to renew the permit by following certain administrative processes. You can do the renewal directly with the Trustee bank.

Do I own the property, or does the bank?

In a Fideicomiso deed, the Trustee bank holds the title for the beneficiary which is the buyer or the owner. The bank acts as the holder of the title but does not have the same rights as the owner. The owner is the only person that has control over what is done with the property. The owner or beneficiary is the only person who can sell or trade the property as well.

Who will be handling the funds during the transaction?

Transaction Things to Know Before Buying Real Estate in Los CabosOne of the important things to know before buying real estate in Los Cabos is the payment scheme. We recommend you use an independent Escrow company so an escrow agent can handle your funds safely. The escrow agent will also closely work and communicate with the closing agent. When the signing for the property is complete, the escrow company will transfer funds via wire transfer.

What is a Notary Public or ‘Notario’?

A Notary Public is a government-appointed attorney who specializes in Real Estate Laws. The Mexican government authorizes notaries to convey Real Estate property rights.

What is an Apostille?

Apostille is a legal verification of a signature. The Office of the Secretary of State in which the person signing resides performs this verification. The Mexican notary public will require you to get this legal verification to ensure the authenticity of your signature.

Why are all documents in Spanish?

In Mexico, the only officially language is Spanish. In order for your document to be valid and official, it must be written in Spanish.

What will my property taxes be?

Things to Know Before Buying Real Estate in Los CabosOne of the most important things to know before buying real estate in Los Cabos is the property taxes. Once you have purchased the property, you will be paying the same property taxes which the seller pays not unless you update the official values of your property in the municipal authority. You can always update the values every year, especially if you built, remodeled, or renovated your property. Manifested construction amounts can always be added. Just follow administrative processes correctly. A committee determines the values of your property tax based on the size, zone, and type of property. The committee consists members of the local government, several civil associations, appraisers, architects, and developers.

If I sell my property, do I need to to pay income taxes in the USA from home sales in Mexico?

Each case is different. We highly suggest you consult an accountant to ensure you are doing the correct processes. Generally, all income that foreign citizens generate in Mexico must be in their country’s tax declaration forms. If a foreign citizen pays taxes in Mexico, your country of residence may not require you to pay taxes.

Where can I obtain a home loan in Mexico?

Good New! Loans for foreign residents are available and definitely possible. All you need to do is show a proof of income in Mexico. You can also get loans from a few private parties in Mexico.

Discover more about the things to know before buying real estate in Los Cabos on our FAQs. These are just some of the things you should know about buying real estate in Los Cabos. Every process is unique. They can vary on a case-to-case- basis. If you need more advice about Los Cabos Real Estate, you may call us at +1-310-860-6063 (US) or +52 1 624 688 6841 (Mexico). Are you ready to find your next home?

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Bringing Your Car to Los Cabos

how-to-bring-car-to-los-cabos

Bringing your car to Los Cabos, a crucial decision you must make now. Once you decide to move or retire in Los Cabos for good, it will be more economical to have your own vehicle to use when driving in Los Cabos in the long run instead of renting one. When it comes to vehicles, it is more expensive to buy them in Los Cabos than in the US. For this reason, we highly suggest you consider bringing your own car even before buying your property. This way you will be able to manage all costs related to moving to Los Cabos. If you are worried about the legalities of bringing your own car in a foreign country, worry no more because driving a US-titled or Canadian-titled car in Los Cabos (even the whole state of Baja California Sur) is definitely legal. Of course, this is under the condition that your foreign plate is in current status and not expired. Another good reason for you to bring your car in Cabo is the foreign auto insurance offered in the place. In Los Cabos, the insurance costs lesser if the car bears a foreign plate.

Retirement signWhen bringing cars in Los Cabos, there are a few things you must consider. First, you must think about the type of vehicle you want to drive. Would you prefer a car, a truck, an SUV, or a 4×4? In considering the type of car, you probably need to also consider the purpose of the car and the number of people it must accommodate. Will you use it often for short trips or will you need it for longer hauls?  When you have the car ready, here are the guidelines and processes to follow in bringing cars to Los Cabos.

Steps in Bringing Your Car to Los Cabos

Registration

Bringing your car to Los Cabos

As we mentioned above, you must have a current foreign plate in order to bring and drive the car in Los Cabos. Since you will be living in Los Cabos, it is important for you to easily be able to renew your registration. When you register your car in the US or Canada, you have to make sure that the plates can be easily renewed. For you to do this, you have to check the processes in your state. Some states and provinces have easy processes while others don’t. For example, there are states like California who require local insurance policies for cars even if the car located in another state or country. Another process you want to avoid in the state you are registering to is the requirement for emission testing every year. It is just impossible to keep bringing your car back and forth for tests just to renew the plates.

Based on our experiences, one of the best states to register car plates for easy renewal processing is South Dakota. South Dakota can provide valid automobile registration and license plates to people who do not live in the state. Additionally, there will be no smoking test, no inspection, and no certification of insurance needed for your car registration which means that there will be a lesser hassle for you to renew each year. To top it all off, you only need to pay $40 to renew your plate in South Dakota!

Insurance

Insurance Bringing Cars to Los CabosAfter successfully getting your car registered in the US, you must insure the car in Mexico. Please bear in mind that you should not cancel your car’s US insurance if you have one until your car is in Mexico. Once you get your car in Mexican soil, you can start looking for the best insurance company that offers the best benefits. They must be in line with your preferences.  Insurance in Mexico is relatively cheaper than US insurance so consider it like getting a bargain!

Shipping/Transporting

You can either drive your way to Mexico or get your car shipped. Driving down to Los Cabos from the US can be tiring but can definitely bring lots of fun. If you do not want to drive and get tired, you can also easily ship the car. There are tons of companies who can help you ship your car from the US to Mexico.

Conclusion

Bringing cars to Los Cabos are simpler and easier when you have the right knowledge. If you have more questions about moving to Los Cabos, you may call us at +1-310-860-6063 (US) or +52 1 624 688 6841 (Mexico). Are you ready to find out how you can enjoy life to the full and retirement Los Cabos? Not convinced yet? Check out the Top 5 Reasons Why you Should Retire in Los Cabos.

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Buying Real Estate in Los Cabos (FAQ)

Buying real estate in Los Cabos requires time and patience to completely understand the process. We are here to make things easier for you. Los Cabos is part of Baja California, Mexico. Like any other place in the world, Mexico has its own set off administrative processes for buying real estate. If you are planning on buying real estate in Los Cabos, you have to be familiar with these administrative processes. The processes are neither easy nor difficult. The best way to start your real estate hunt is by getting an informed advice from a professional licensed Real Estate Broker who is both working and living in Los Cabos. Here are some FAQs and answers to help you start.

Buying Real Estate in Los Cabos FAQs

Can non-Mexicans (foreigners) buy real estate in Los Cabos?

Buying Real Estate in Los Cabos Fideicomiso

Yes. Anyone, whichever nationality he or she belongs, can legally buy, hold, and sell real estate in Los Cabos. You may have heard from someone before that owning a property in Mexico is restricted for foreigners; this is true for “restricted zones” in Mexico. However, there is still a way to acquire property. We will get into details below.

How can I acquire a property ownership in Los Cabos?

There are three main ways on how you can acquire property ownership in Los Cabos.

First, any foreign born citizen can legally own any type of real estate outside restricted zones in Los Cabos. This ownership follows a fee-simple basis. This is also known as an ‘excritura’.

Second, foreigners can take the title again in a fee-simple title when acquiring a non-residential property. This is through the establishment of a Mexican or Foreign-owned Corporation. However, this type of ownership has two deed restrictions. If you acquire this type of ownership, you must submit to subject yourself to Mexican law. You should also submit that the property being held within the Mexican or foreign-owned corporation will be for the non-residential use and must be registered in the Ministry of Foreign Affairs. This type of ownership applies to real estate in and out of the restricted zones.

Third, if you plan to acquire a residential property within the restricted zone, the ownership must be within the Mexican Trust through the use of a Mexican Bank. On this option, the Mexican bank serves as the trustee for the trust, Fideicomiso.

Where is the Mexican restricted zone?

Before buying real estate in Los Cabos, first, let us define and understand what a restricted zone is. In the Mexican constitution, a “restricted zone” is all land within 50 km or 31.6 miles of Mexico’s ocean coastline or inland lakes. It is also all the land that lies within 100 km or 62.13 miles of any borders with other countries. Los Cabos lies within the peninsula of Baja California making it part of the restricted zone.

Why is there a restricted zone?

Now, you must be curious why they have such zones. It is all because of the history. We all learn from history. Mexico’s history features invasions, wars, and losses, not only of people but also territory. Because of these the article about such zones was put into place to protect Mexico from having to subject itself again to foreign invasion and intervention. Since borders and coastlines are the most vulnerable locations, these were then added to the restricted areas. Although there should not be any threat of invasion in Mexico today, this rule is still part of their constitution so we definitely should pay respect to it.

Now that you have an idea as to why certain rules are in place, you will better understand matters in acquiring a real estate. Keep in mind that these rules are a legacy of the Mexican culture. They are definitely not a halting tool that discourages foreigners to invest, own, and retire in Los Cabos.

Don’t be discouraged now because the next thing we’ll talk about is Mexico’s action towards embracing, welcoming, and encouraging foreign investment. The government knows that they need to acknowledge the fact that Mexico is experiencing a rising tide of property investments. Back on the 28th of December 1993, the Mexican government enacts the law about foreign ownership “Fideicomiso”. To give you a glance about this law, the act protects the rights of foreign ownership within the restricted zones. It also ensures that foreign owners get the same safe and legal purchase, acquisition, and succession rights of real estates that Mexican citizens enjoy.

What is a ‘fideicomiso’?

If you live in the United States, you must be familiar with Bank Thrust and Family Trust. Bank Trust in Mexico follows the same principles. Here is some notable information.

All trusts have a Trustee or Trust administrator. They are responsible for administering the trust and its assets according to the instructions within the Trust document drawn by the parties who establishes the trust. The Mexican Bank trust is drawn to specifications. Whether you need a joint, right of a survivor or LLC, they tailored the Mexican Bank trust according to your ownership needs. This makes family succession planning easier.

These trusts would normally require payment to the Trustee or Administrator in return of their services. Your Mexican trust also makes this provision by establishing a minimal annual fee paid to the Mexican Bank.

Here is another notable difference. In the United States, the Trust Assets do not belong to the Trustee administering the trust. On a Mexican Bank trust (Fideicomiso), the Trust is neither owned nor part of the bank’s assets.

Fideicomiso is not just a helpful tool for foreigners. Many Mexican nationals also use it as an instrument in Estate Planning. It eases the passing of property to individuals who are not direct family. Additionally, it helps them save on Capital Gain taxes.

Isn’t the ‘fideicomiso‘ (Mexican Bank Trust) just a lease?

Let’s define the term “lease” to better understand their differences. A lease is a contract between you and the owner of the property. This contract gives you the right to use their property for a specific length of time. Moreover, there may be a need for you to pay the owner with some compensation, generally monthly. They typically base the compensation on the market value of the property on lease. Now, here are our questions:

As the leaseholder:

  1. Will you be able to sell the leased space to another person legally? No.
  2. Will you be able to use the asset as collateral for a loan legally? No.
  3. Are you allowed to tear down or remodel the property legally? No.

Clearly, with the Fideicomiso or Bank Trust, you have all these rights and much more. Use your best judgment.

How long does the ‘fideicomiso‘ last?

Currently, Fideicomiso needs renewal after 50 years. If you want to renew for another fifty years, all you need to submit are the following: a Trust Application that confirms your updated personal information and choice of beneficiary, a new Foreign Ministry permit fee, a bank renewal fee and other fees. The fees go up to $3000 USD. However, it will definitely change in the future.

Can I will my real estate in Mexico to my friends or family?

Yes. You can enjoy all the rights of fee simple ownership and that includes leaving your property to family and friends. Another advantage of Fideicomiso is that as a trust, you can pass your investment to a 3rd party. All you need to do is to name them as a secondary trustee. This allows you to have control on the way and to whom the property would pass. It lessens the risk of probate inheritance taxes too.

What is the typical purchase process in Mexico?

The real estate purchase process in Mexico is very similar to the process in Canada and the USA with a few notable differences. Of course, it all starts with you searching for a new home. Starting the search for you new home can be as easy as turning your computer on and checking pages online. You can instantly have an idea of any place as there will be images and descriptions provided. Of course, you will need to do quite a bit of research to have an idea of the price ranges. Then, you can decide which amenities to add and leave out depending on your budget.

Mode of Payment

When deciding on the budget, you have to be realistic on how much you can really afford. You have to ensure that the property you choose is within your means of paying cash. You need to consider if your available savings will be enough. If not, there are numerous other ways for you to afford a property. You may need to apply for a loan. If you do, you ought to check carefully on the amount of loan your income strength can qualify for. Will you be needing to pay a part of the purchase price in cash and a part through a loan? Once you figure out the mode of payment, be sure to discuss the matter with the seller and agree on the terms.

Offer to Purchase

After figuring out the best mode of payment, you can plan how to structure your Offer to Purchase. This process will be a bit different than what you know. Unlike the processes in other places, you will either need to submit a check made out to a third party escrow or a signed promise to deposit Earnest Money into escrow along with the Offer to Purchase for the seller to consider it. After this, there may be back and forth negotiations and counter offers between you and the seller until you reach an agreement.

Once your offer is accepted, the next step is to close the process. The closing process is another topic that needs to be discussed further so keep reading and we will discuss what happens in the next question.

What happens in the Closing of a Real Estate Transaction?

The closing process happens when the deed transferring ownership of the property is signed. It must be signed in the presence of the Notary Public, the Buyer or his legal representative, and the Seller or his legal representative. In Mexico, the Notary Public is an attorney appointed by the government. The Notary Public carries a fair degree of weight in terms of being jointly liable for ensuring the veracity of information. He is also liable in retaining taxes and other similar steps during the transaction. In this transaction, the buyer’s money is released from the escrow account to the seller and the real estate possession is granted to the buyer. After all legal documents are signed, the taxes are paid and the title deed is submitted for filing.

Here are some important bits of information to bear in mind during the process:

  1. The closing of a Real Estate transaction may be different from what you know or have done in your country.
  2. At the time you purchase, ensure that the Trust Deed shows the actual price you are paying for the property.
  3. Double check all important information in the Trust and ensure they are correct, especially the substitute beneficiaries’ names and their spelling.
  4. If you plan to build, ensure that your construction license is really based on the amount that you will be investing in the project. It is important to indicate the right value because if you use a lower value, it Capital Gains taxes will cost you more in the future.
  5. Before signing any legal document, read, understand, and digest all the information. Take your time. Make it a part of you! If you tried to read them and still get confused, you can always get an expert explain it to you.
  6. Once the closing is completed, let all utility services know about it. Update necessary information through them. This way, all the new bills will come under your name.

These are just some of the things you should know about buying real estate in Los Cabos. Every process is unique. They can vary on a case-to-case- basis. We recommend that you talk to your agent, realtor, or broker about all the paperwork required for a smoother and faster process. You definitely have to know more! If you need more advice on buying real estate in Los Cabos, you may call us at +011 521 (624)164 2607. Are you ready to find your next home?

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How to Save Money in Los Cabos

how-to-save-money-los-cabos

How to save money in Los Cabos; a question that may have crossed your mind but you have yet to find the answer. Let us help you out. It is not easy to plan how you will save money in a foreign place when you yourself haven’t been there. We understand that you have no idea about how things work in the place so here is a brief guide that will make saving money in Los Cabos easy and efficient for you.

How to Save Money in Los Cabos: Record Keeping is a Must

How to Save Money in Los Cabos Budgeting

When retiring in Los Cabos, the way you plan and track your budget may change. There are several factors that can affect the way you plan. First, the bills in Los Cabos are typically paid in person. This only means that you cannot do what you are used to doing in paying bills back home. You cannot pay your bills through the mail with a check. Additionally, you  cannot pay the bills via internet banking. You will have to physically go to a payment booth to pay everything in cash.

If you want to record your payments, you will have to keep hundreds of tiny receipts in an organized way or else they will end up floating in every corner of your home. Second, the bank statements are few and far between which means that it will be harder for you to reconcile doubts on your expense. This is why you must record everything in order to have a good grasp of how your money flows each month.

How to Save Money in Los Cabos: Prepare for Surprise Costs

How to Save Money in Los Cabos Budgeting

When budgeting, you should add an extra amount for surprise costs. You never know which of your bills will reflect surprise costs. You better be prepared for it since it will be easier for you to pay if you have the amount readily accessible. There may be a few important and sudden things that you have to allot extra money for. It can be a flat tire or an additional charge on your phone bill. Some people say that Telmex, the national phone service provider in Mexico, adds additional charges for subscriptions and other fees. We suggest you cancel any subscription right away to avoid issues in the future.

Helpful Ideas to Keep Track of Your Budget

How to Save Money in Los Cabos Budgeting

  1. Get a folder or a clear book and label them according to the bills you pay. Every time you pay, you can place every receipt in the folder that represents the appropriate label. This habit will keep things organized. You can place the folder inside a cabinet to ensure it is safe.
  2. Use a calendar and mark it every time you pay a bill on a specific date. You can also use the calendar as a reminder for your bill due dates. Check these dates regularly to ensure you don’t miss paying any of your bills.
  3. Withdraw the money you need for payments in advance. Do not spend the money on anything else. Keep them until the bill is due.
  4. Write down your expenses regularly. No matter how small or big they are, every penny you spend should be recorded. It would be best to do it daily. This practice can help you restructure the way you spend your money since you will have a quick overview on how your money flows every month. It will also help you to keep things short in managing your money.

Saving money in not an easy task to fulfill; these tips on how to save money in Los Cabos will be helpful if you follow them strictly.  If you need more advice on how to save money in buying a property in Los Cabos, you may call us at +1-310-860-6063 (US) or +52 1 624 688 6841 (Mexico). Are you ready to find out how you can enjoy life to the full with your retirement in Los Cabos?

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