The ultimate souvenir of a fabulous vacation… Real Estate
Text by: Carl Timothy • Photos: Danilo Rottigni from Homes & Living
Almost everyone has taken a vacation and wondered what it would be like to live in that exotic place. During one of my many vacations to Puerto Vallarta in the 90’s, a friend of mine was driving me to the airport and asked if it would be possible to stop by his marina town-home to check on his boat.
Coming from the Los Angeles area I knew that a townhome in the marina with a dock would cost a fortune when I saw how nice his townhome was and how inexpensive they were to purchase, the wheels started to turn.
He mentioned that his next door neighbor was interested in selling and the rest is history. I was a broker in Beverly Hills and was aware that Mexican laws are different than US real estate law. I decided I didn’t want to represent myself in the transaction. Although I had lived in Argentina for a few years and my Spanish was very good, reading through the legal documents was over my language level at the time. To make sure I wasn’t making any mistakes I hired a professional to represent me. In the end, I found the transaction was less complicated than I expected.
With the rat race of working in Los Angeles and the temptation of alluring Puerto Vallarta calling, I moved into my marina townhome and started my new career in Mexican real estate. Needless to say, I am still very much in love with Mexico and it’s people and especially enjoy my life in Puerto Vallarta. There is a magic here, an energy that I have not found in any other place on earth during my travels. Here are the basics you need to know to find and purchase your special property in this wonderful, tropical place:
- Select a professional realtor that you feel comfortable with. They should be a member of AMPI, the Mexican Association of Real Estate Professionals which is the local board of realtors. Members of AMPI also belong to NAR or the “National Association of Realtors”. A realtor’s professional representation does not cost a buyer anything but can save you a lot of mistakes.
- Ask your realtor to present you with every property that may meet your needs in the MLS system or in the Multi-Dev for new developments. Make sure the properties they show you have a title and are not “Ejidal” which means you are not getting title to your property.
- Know that if you are a foreigner and you are purchasing your property in Puerto Vallarta you will be required to own it through a trust. This trust functions much like a trust in the United States and gives you all the rights and privileges of property ownership that are afforded to a Mexican citizen. A trust is a vehicle through which you hold title to your property. Most trust contracts are for 50 years but as the years pass by this does not mean you are about to lose your property or that your property depreciates in value like a leasehold. It simply means that in 50 years you will have to renew your contract with your bank. At any time you may sell your property and cancel your trust while the new owners get their own new trust at a bank of their choice.
- To avoid any problems for your heirs, list more than just yourself and your spouse as beneficiaries of your trust. You can name as many beneficiaries as you wish. You may even want to consider making a will for yourself with a Mexican notary. This could help greatly in case of an accident to assure all your assets.
- Real property services are available like title insurance and escrow services (First American Title and Stewart Title both have offices in Puerto Vallarta) and mortgages are available for both US and Canadian citizens that will use your property in Mexico as collateral for the loan.
- Normal deposit amounts for a purchase are usually 10% of your purchase price and escrow funds should be held by a third party such as First American Title or Stewart Title for distribution at closing.
- Remember that your new home is not in the United States and that Mexico has its own set of laws and regulations. Items in a transaction that may seem normal practices in the United States or Canada may not work or protect you in Mexico.
- There are a number of good property management companies that will help you get set up with your utilities, pay your bills, and if you are an absentee owner handle taking care of your maid, cook, gardener, pool service, help with renovation and construction, and help you offset or cover costs with vacation rentals.
Owning a property in Puerto Vallarta has proven to be a safe and wonderful investment for many foreign buyers. Property values have steadily increased over the years with much less fluctuation than many US real estate markets have experienced. Go ahead and let yourself fall in love with Puerto Vallarta and this marvelous tropical corner of the world. It’s easier than ever.