Playa Del Carmen

I recently received this email from my friend, Sharon. She just retired and she’s  doing all the smart things: She did her research. She took a short trip to Playa Del Carmen. Now she’s back and planning a longer six-month stay. Sharon’s email is insightful and she’s been kind enough to allow me to share it with you.

Hi, Barbie! I am now officially retired as of 7/01/09. I went to  to Playa Del Carmen, Mexico in November 08 after we e-mailed. My sister went with me and we had a wonderful time!We looked for a condo to rent this year and found one. We are going back 11/1/09 and want to stay until 4/30/10. I have tried to remember all the important things I need to do for a 6 month stay and wondered if you could tell me if there is a need for a Visa if we stay 6 months in addition to the passport. We also need to buy inexpensive furniture as it is not furnished.

Would you know of any places you could recommend for that?

We are planning to leave the furniture for the 6 months we return to the states and return there the following year again. I am not sure about permanent retirement there until we see how we like it this time for 6 months. We plan on going to many different places from Playa Del Carmen and checking things out. I have verified my health insurance will cover me there and resolved the prescription issues for a vacation exception to get 6 months to take with us. Any advice or info you can give me would be greatly appreciated!The other thing I was wondering about was the location of the nearest Catholic church in Playa Del Carmen.  We’ll be staying just off the other side of 307 .It’s about 10-15 min. from the shopping district. It’s a new development and it has a private beach 5 minutes from the condo.

After 61 years of Maine winters and 28 snow storms just last winter alone I am so looking forward to this. :)

Thanks again. Sharon

Rood stand

 Here is my reply to Sharon about

Playa del Carmen:

Hi Sharon:  Glad you took your sister with you!  Bet you had a ball!

You are absolutely right: you will need your passport – and make sure its valid date exceeds or meets the date you plan to return to the States.

Then, as a U.S. resident – I’m assuming – You will also need a Tourist Card (permit) and it will be good for 180 days – important – that does not mean 181 days!!!  You must enter the States before midnight on the 180th day!!! NO Excuses!!! :)

The tourist card (permit) –will be taken care of at the border crossing port of entry or on the airplane, ship, etc.  Just do as Dick and I did in my book, Retire In Luxury – follow the line or do as the airline steward or official at the port of entry instructs you to do. Remember:  Do not enter Mexico without your permit.

You will decide on:  either a Non Immigrant Permit – visit Mexico and then leave Mexico (What you’ll want) ,  or an Immigrant Permit – permanent residence in Mexico.  Either way, you do not give up your natural citizenship to receive these statuses.

For a short stay of 6 months or less you may want to consider the FMT  visa (short term non-immigrant visa for stays 6 months or less.)

Or you might want to consider a FM3 (long term non-immigrant visa for more than 6 months which gives non-immigrant temporary residency status to the holder.  In my book, I call this the “permanent visitor” permit.) Most retirees opt for the FM3.

The furniture situation – that’s a tough one – maybe try to buy some used. Or, try Gringo Furniture ( 1-866-600-1186). I have not used them, but I have heard good reports about them. Might be an easy way to accomplish a big project!

You were wondering about the nearest Catholic Church. There is one in the Colosio neighborhood in Playa del Carmen. It’s called Parroquia de Nuestra Senora de Guadalupe.  Father Bernard Quinn may still be the priest there. I believe the services are in Spanish.  The church is not air conditioned. I don’t think you’ll find many that are in Mexico, but the ventilation is good.  It’s the corner of 15th Ave and 12th Street.

Best to you, Barbie

Mexican Real Estate Fideicomiso

Think you can’t buy real estate in Mexico? Think again!

In places formerly off-limits, foreigners can now acquire irrevocable and absolute ownership rights to property through a 50-year, perpetually renewable, and transferable, real estate bank trust called a “fideicomiso”.

With a Real Estate Fideicomiso, you have the same property rights in Mexico as we do here in The States with deed. 

What is a fideicomiso? It’s a bank trust secured by the Central Bank of Mexico. It is a 100% legally-binding instrument which entitles you to deeded ownership of real property in Mexico. The real estate fideicomiso was created specifically for non-Mexico citizens to enable them to own property in the formerly restricted zones. 

You see many years ago, to protect Mexico from having the wealthy countries buy all the desirable land (near the border and coastal areas) the government of Mexico created the Fideicomiso. 

In 1997, Mexico joined the International Banking Standards community — and thus a real estate fideicomiso permits non-Mexican residents to own property in Mexico. (You might be interested to know that  Most banks in Mexico are now owned by various international banks, such as Citi Bank and Chase Manhattan — so that’s one of the reasons why Mexico had to adopt the International Banking Standards.) 

A “trust” is a “trust” just about every where you go and it works the same way here. For citizens of other countries, title will transfer to a Mexican bank, which acts as trustee of YOUR interests (making you the beneficiary.) There are specific banks that have been authorized by the Mexican government and are allowed to hold a Fideicomiso. 

In a nutshell, here’s how a Real Estate Fideicomiso works: 

• The land is put in a trust issued by the federal Mexican government.
• The trust owns the land.
• You own the trust.
• The bank administers the trust. The bank has no ownership rights to the trust.  They cannot “take it back”.
• Trusts are now for the duration of 50 years, with the right to renew for 50 more years at the expiration date.

What are the basic requirements of a Real Estate Fideicomiso? It’s simple.

1) You must have a valid passport. 

2) You must have a valid credit card (the bank trust charges are charged to this credit card). 

3) And if you are in Mexico, you must have the tourist visa issued by the Mexican government when you entered the country. You have to possess an FM-3 Resident Immigrant Visa. An FM-3 costs approximately $98.00 US per year, per person, and is renewed annually. It allows you to keep a US plated vehicle in Mexico, to leave and return at will, open and maintain a Mexican bank account, and can exempt you from capital gains tax when selling and allows you to purchase property in Mexico. 

Building a home

When you purchase a home in Mexico, you will pay: 

1) The Negotiated Price of the Property — This amount we know, as it is fixed at your agreed on purchase price.

2) The Bank Trust (Fideocomiso) — This charge can vary depending on the bank you choose, but be prepared for approximately $2,250 US.

A portion of that fee is for the bank, but the bulk is paid by the bank to the federal Mexican government. This fee covers all the trust documents, permits and the first year’s administration fee. 

And don’t forget real estate closing costs which include:

Title search to ensure the person selling the property is actually the owner or has the legal power to sell the property.
Lien search to make sure there is not a hidden claim on the property.
Appraisal to set the tax value.
A new plot plan showing the lot dimensions.
A new deed, verifying all taxes, phone bills, water bills, and electric bills, etc.
Registration of the new deed once everything is complete and all fees have been paid.
The acquisition tax, paid by the buyer in Mexico. This is fixed at 2.2% of the purchase price.
So, what are the actual costs?  This again is a variable. An approximation is: for a $150K to $200K property, about 4 to 5%, and it drops correspondingly for higher values.But…about all the charges you’ve heard rumored you’re going to be hit with… don’t get scared…they aren’t nearly as bad as you thought they would be.

A sale becomes registered (final) when it is witnessed and recorded by a Notary Public (Notorio Publico in Mexico).

At that point, title passes to the designated Bank to be held in Fideicomiso (Trust). The specific Banks authorized by the Mexican government designated to hold the Fideicomiso must pass diligent Mexican government inspection. The chosen Bank reviews all paperwork of the current owner/developer to ensure the documents are complete and legal. There are a number of Banks in Mexico who have been authorized by the Mexican government to hold the Real Estate Fideicomiso.

Title is delivered to the Bank who has been authorized to act as the Trustee.  The Bank reviews all paperwork of the owner/developer to ensure the documents are complete and legal.  The buyer is designated the Beneficiary of the Trust. The Beneficiary retains the use and control of the property and makes all the investment decisions.

It’s really a pretty simple process as long as you have someone you can rely on, like my friends in Mazatlan, who know how the process works.  I can put you in touch with them easily, they are contractor/realtors and have a very capable staff.

Just Some Good Old Common Sense Hints:

When looking at used homes, bring a small appliance with you – a hairdryer would work. Use it to check the electrical outlets – just to make sure the plugs work and that there’s actually an electric wire attached to the plug. Ask to look at the owner’s most recent water bills.  This is the easiest way to detect leaks in the plumbing.

Okay, having your dream home in  Mexico is totally possible now, legally. Please, please, don’t try getting around the legalities in Mexico. Quite differently from the
United States, they don’t put up with that! And…good for them!

The Fideicomiso also protects your beneficial rights under guidelines provided by the Mexican government and their constitution, basically gives the owner of a property full control of that property. The sole concern of the bank is to manage the property for the benefit of the owner of the trust. Trusts are established for initial 50-year periods and are in perpetuity renewable. You, the beneficiary, may build upon, tear down, add to, improve, mortgage, sell & will, etc. You can transfer or assign you interests to any person and keep the profits from sale of the property, subject to applicable tax laws and expenses.

Property held under a trust may be passed on to future generations, and the person to whom the bequest is made is not burdened with inheritance tax.Investors should contact a contractor/realtor who has a qualified attorney who can walk you through each step.

The Bank will not issue a developer the right to apply for and form a Fideicomiso on their lots until they are satisfied with all documents and satisfied that the subdivision process has been completed. When title to your property is in a bank trust, there will be annual administrative fees set by that bank.

From the first, when I started researching the possibility of retiring to Mexico as a U.S. citizen, I heard that foreigners can not own property in Mexico. Then after learning that was a misconception, I still heard…Yes, but you can’t own near the coast… Wrong again!

Mexican law now allows foreigners to own real estate where once it was forbidden. Ownership of land within 50 kilometers (approx. 30 miles) of the coast is made possible by setting up a Bank Trust.

There are laws governing foreign ownership of land within 50 kilometers of the coast or 100 kilometers (62 miles) of the border. To ‘buy’ property in these areas, it’s very simple – you need to use a “Bank Trust” a Fideicomiso — that legal, government-sanctioned System.

Just remember: Buying real estate in Mexico is easy. All you need is a fideicomiso — and you can feel safe and secure because  you have the same rights in Mexico with a Fideicomiso as we do here in the States through a deed. Yes, it’s that simple!

Real Estate, fideicomiso article by Barbie

Ajijic, Mexico

If you’ve been thinking that perhaps escaping South of the Border may be the way to make your $’s stretch, read this selection of my emails! 

These are but a small sample of the emails I’ve received from some very happy, fortunate retirees, who now are calling Mexico their home – at least a part of the year. 

When you begin thinking of retirement in Mexico, you will have no need to feel you are like the “Lone Ranger” – heading off into the neverlands – you will be just one more lucky person heading into the sunset to enjoy the best part of your life! 

I do want you to make sure you read all the free information I have offered on this site – the newsletters, plus the blogs and articles I’ve included in my Mexico Information Center.  Read the Real Estate Report I have offered too – If you truly don’t want contacted – just select the drop down menu and click that …and I can guarantee no one will bother you – but read my report anyway! 

I say, over and over again – you can never have too much information when you’re making major decisions about your life!  Now, relax, and enjoy these few email from people who will welcome you when you head south:

This is from Charlie, in the Ajijic area:

” Don’t waste your money on a paid tour of the Ajijic area.  Well, I think I have read almost all there is to read on moving to Mexico and I have to say your information has been extremely helpful. Every area of the country (Mexico) is as different as the circumstances of each person who contemplates the move. Hot weather is not my thing but the beautiful country, the friendly people and the economy can’t be beat. Having lived in Florida, I learned to really dislike snowbirds & loud Gringos.

 ”I have rented a three bedroom , two bath home, with a maid’s casita and bath, garage, patio and nice yard about 30 miles south of Ajijic  on the other side of Lake Chapala for $200 a month. I lived in Ajijic while looking for a permanent place and paid the Ajijic prices for everything and out here it is about half. Even the food, and pharmacies are cheaper because it seems that here everything is priced for the economy of the town. A few months with the Gringos in Ajijic and it was an easy decision. I couldn’t be happier. It wasn’t an economic move but being away from the Gringos who do drive the prices up where ever they go it certainly turned out that way.

“I’m sure you remember the article in AARP magazine that offered Lake Chapala/Ajijic at $800 a month. Well the Gringos drove it up to an easy $1200 to $1400 a month. (Insert by Barbie:  Still one heck of a cost of living!! ) Well, I am here to tell you that if you don’t desire the hubbub of the crowd and you don’t mind a 25 or 30 minute drive to the larger towns tell your folks that $800 a month is a breeze.

 ”You know the climate & beauty here, the people in the country, like in the U.S., are more friendly and helpful than city folks and the only thing we don’t have out here is the noise of the city.

 ”My advice to a prospective person coming to Mexico is to rent for a few months and look around for what fits their economic and social desires. There is something here for every one. In my community I don’t spend or act like a Gringo and I am accepted as a member of the community.

“Glad to help, Barbie.  I expect a couple here I think the 22nd, who you had referred to me who are coming for a week to visit the area.

Charlie

I have sent a few people to Charlie – Charlie is just a retiree who I happened to have contact with. He’s not a realtor, tour guide, nor anything, other than another retiree, enjoying the savings that can be realized in Mexico.

Ajijic article by Barbie.