General information for buying real estate in Lake Chapala Mexico
Why buy Lake Chapala Mexico real estate?
Lake Chapala Mexico has become a popular location to own a second home or vacation property. Many people from around the world -- and especially the United States and Canada -- are actively buying real estate in Lake Chapala. In recent years Lake Chapala become an attractive place to invest. You might know at least one person who has recently visited Lake Chapala or who has made a real estate investment in the country of Mexico. There are several reasons behind this trend:
1) The prices of Lake Chapala properties are often favorable in comparison with other destinations. And, with more and more people discovering Mexico, many experts believe the long-term investment prospects remain attractive.
2) Lake Chapala’s culture and services are increasingly welcoming of foreigners. While Spanish remains the primary language in Lake Chapala, it is also true that more and more people speak English, enabling Americans and Canadians to have a more comfortable experience. All in all, Lae Chapala feels more accessible (just 30 minutes from the Guadalahara international airport) and comfortable than in the past.
3) Over 70 million people in the United States are now over 50 years old. This segment of the population is prone to seeking vacation homes, retirement locations and real estate investments. There is also more wealth worldwide than ever before and much of that wealth will be invested in real estate. As more and more people invest in Lake Chapala Mexico, additional services and infrastructure are coming up to support this trend. As this occurs, it will make Lake Chapala even more appealing to new investors, and therefore the values should increase.
4) The long-term future of Lake Chapala looks promising. The area itself is becoming stronger economically and the opportunity for long-term real estate appreciation in Lake Chapala continues to be favorable.
5) Lake Chapala’s warmer climate is attractive to many from the United States, Canada and other foreign locations. For decades many people have enjoyed vacationing in Lake Chapala. "Purchasing" property is the natural next step.
6) Over 1 million Americans now live full time in Mexico. Along with residents who have moved from other countries, this large population has proved the safety and viability of life in Mexico.
7) Lake Chapala offers an array of interesting and fun things to do. From horseback riding, weekend soccer games, and a pristine lake, there is something for everybody. In addition, Lake Chapala is ideally located to provide easy access to local golf courses and other tour activities such as zip lines, bay cruises, snorkeling, swimming with the dolfins and cultural events in nearby Guadalahara.
8) There is an inventory of condos, villas, homes and land plus a growing selection of resorts and developments with extensive amenities. This provides a steady supply of inventory for interested buyers and investors in the Lake Chapala area.
As you can see it is no surprise that Lake Chapala Mexico provides an increasingly attractive location for Americans, Canadians and other foreigners. Most local experts believe that Lake Chapala Mexico real estate will provide an attractive opportunity for both investment and enjoyment for decades to come.
General Buying Tips:
When it comes to purchasing real estate in Lake Chapala, Mexico, the process of making an offer is very similar to how one makes an offer in the United States or Canada. However, the escrow and title process is different. Mexico's standards and requirements for entering the real estate profession are easier than in the states and Canada. Therefore, before you buy, do a little research and background checking to ensure you are working with a qualified professional.
It is worth noting that there is no nationwide MLS service at this time. All in all, you should only work with the highest quality professionals in all categories of the purchasing process, including brokers/agents, mortgage, legal, financing and title. Although it is quite common these days for foreigners to purchase Lake Chapala Mexico real estate, it never hurts to do a little background checking to ensure you are working with highly qualified professionals.
General Investing Information
Mexico’s economy is currently undergoing significant growth and improvement. In 1982, following it’s inability to support its escalating foreign debt, Mexico made changes in its infrastructure in order to encourage more foreign investment. Most notable of these changes was Mexico’s stance on foreign ownership.
Allowances of foreign ownership of Mexican companies, formerly limited to 49 percent, were raised to 100 percent in many enterprises. This includes development companies, hotel companies, etc. This is important because most companies no longer need prior consent from the Foreign Investment Commission or Mexican investment partners.
Mexican Federal Corporate Income Tax ranges from 25 to 38 percent, and allows provisions to offset the detrimental effects of inflation on monetary assets and liabilities, inventories and depreciable assets.
Mexico’s economy is great for foreign investors. It offers a solid communications infrastructure, ample energy supplies, low labor costs, and skilled trainable labor resources all in close proximity to the world’s largest market.
In addition, the Mexican government has dedicated time and money to developing new tourist destinations with modern facilities and infrastructure in order to promote the tourism industry.
Ownership in Lake Chapala Mexico - Separating Fact from Fiction
Many rumors are constantly floating around about foreign investors being scammed out of all their money on Mexican real estate.
Owning land in Mexico is no longer sketchy like it was back in the old days. Due to established and well defined rules regarding non-Mexicans owning land, owning property in Mexico is easier and safer than ever. The rules protect foreign ownership rights, and promote foreign investment.
Over the last decade property in Mexico has become a practical investment strategy. Long gone are “promises and handshakes.” Investors are now protected by U.S. title insurance, bonded escrow accounts, extensive title searches, and “Fideicomisos.”
Fideicomisos are the number one way foreign investors are protected. A Fideicomiso is a safe, almost forever renewable Mexican property trust, which was established especially to protect foreign investors.
WHO'S INVOLVED IN REAL ESTATE TRANSACTIONS IN LAKE CHAPALA MEXICO?
Normally, there are three to four players involved in any real estate transaction in the restricted zone:
- A real estate company
- The buyer's lawyer
- A bank
- A public notary
All four are helpful in their respective areas in assisting with real estate transactions. Transactions outside of the restricted zone do not involve a bank since it is not necessary to establish a real estate trust in those areas. Otherwise the transactions are much the same.
Because of the similarities of real estate transactions in general, it is easy to assume that the basic terms and principles which are familiar in the United States also hold true in Mexico. This assumption becomes easier to make when United States real estate terminology is adopted for transactions in Mexico. Much of the paperwork is similar, if not exactly the same, as that used in the US. Although, there are many aspects of Mexican real estate transactions that are identical to procedures carried out in the United States, there are many aspects that are completely different. As a rule, a foreigner should assume nothing.
Mexican real estate transactions are not carried out in the same manner as United States real estate transactions. The buyer must retain professionals to assist in the transaction. Mexico has yet to regulate real estate transactions. Real estate agents and brokers are not legally licensed in Mexico. Consequently, a foreign buyer cannot always depend on the normal safeguards that would be applied to real estate transactions in the United States. The old saying "let the buyer beware" is very appropriate. Anyone can set up a real estate company in Mexico. There are no special requirements or brokerage licenses to obtain. A would-be real estate agent merely has to establish a Mexican corporation, obtain a work visa, and he is in business.
There are good reasons why the real estate industry in the United States is highly regulated. Until the real estate industry is regulated in Mexico, there will always be some real estate companies who prefer that buyers know as little as possible about real estate transactions. After all, a buyer cannot ask questions if he does not have any knowledge of the laws.
Currently there is nothing similar to a Real Estate Commissioner or a Department of Real Estate in Mexico. Some states are beginning to look at some kind of real estate legislation, but it might be some time before this is a reality. The American Embassy and the American consulates in Mexico are good places to start when trying to determine if a real estate company is reputable. Some of the real estate companies have established quite a reputation for themselves at some of the Consulates.
A Mexican attorney should be involved to draw up contracts and to review the conditions and terms of sale. Additionally, an attorney can do a title search and point out any problems or alternatives a buyer may have. The buyer should always have his or her own attorney rather than using the attorney of the seller or some attorney used by a real estate company free of charge. As the old saying goes, you get what you pay for, and usually if someone's services are offered free of charge you are probably paying for them in some other way. Legally, only a licensed Mexican attorney should provide advice on the law. If an attorney is licensed in Mexico he should be able to produce a "cÚdula profesional." This document is a registered license to practice law in Mexico and includes a photo of the attorney and his signature. To be sure that an attorney is licensed in Mexico, a foreign buyer should ask to see the attorney's license, or have the attorney's license number included in a retainer agreement before employing any services.
American attorneys are not licensed to practice law in Mexico and should not give advice on Mexican Law. I should clarify, here, that I am referring to individuals who are licensed to practice law in the United States, and not merely individuals who are citizens of that country. There are currently very few Americans who are licensed to practice law in Mexico. The fact that a person is licensed to practice law in the United States in no way allows him or her to practice law in Mexico: Mexican or United States law.
Besides formalizing your real estate transaction, an attorney can be very helpful in saving you money. This is because attorneys are involved in many different transactions and have contacts with banks, notaries, and the Mexican government on a regular basis. Because of this they are aware of the most competitive cost and fees involved in a transaction and can make sure that the buyer is given the best possible prices. An attorney can also inform the buyer regarding his or her legal options and by doing so can make sure that no opportunities are missed: tax planning considerations, closing costs which should be paid by the seller, and ways of taking title to the trust rights which make sense for the particular circumstances of a specific buyer. Very often one piece of good advice can save the buyer thousands of dollars in tax savings or other savings when the buyer eventually sells the property.
When looking for an attorney it is important to remember that any Mexican attorney can normally handle a real estate transaction. The buyer is not limited to only the local attorneys where the property is located. All real estate transactions involving a trust are governed by federal law. This means that all such transactions are carried out the same way regardless if the property is in Cancun or Los Cabos.