Why is México secure for investment?

Real Estate investment is one of the smartest and most significant financial decisions. It’s a stable market that offers good returns and is highly useful for building wealth or leveraging credit.

However, the key factor determining the success of a property investment is its location. This affects the property’s appreciation value over the years and its demand for rental or economic potential.

Why Mexico?

Many foreigners choose Mexico for Real Estate Investment, aiming to establish a secure and profitable business. But why Mexico?

1. High tourist appeal: Mexico is a top tourist destination, offering diverse attractions such as beautiful beaches, deserts, jungles, snowy mountains, and vast forests. This tourism boom ensures a steady demand for rental properties.
2. Affordable prices: Property prices in Mexico are generally much lower compared to those in the United States and much of Europe.
3. Lower taxes: Mexico offers a favorable tax environment compared to many other countries.

Mexico ranked as one of the most visited countries in 2023, with more than 42 million visitors.

Is investing in Mexican real Estate safe for foreigners?

Absolutely, yes. Investing in Real Estate in Mexico is as safe for foreigners as it is for locals. The market is well-regulated, with the necessary legislative instruments in place to ensure legal certainty in purchase and sale transactions.

To maximize the benefits and ensure a great experience, it’s crucial to work with real estate agents collaborating with developers, builders, and other specialists in urban planning.

How to invest in Mexico as a foreigner?

Investing in Mexico is an excellent opportunity for foreigners to generate income. To create a successful and long-lasting investment model, certain legal requirements must be met.

The Mexican government allows foreigners to buy private properties in the country. This has been possible since 1993, thanks to the Foreign Investment Law and modifications to Article 27 of the Mexican Constitution, which extended property rights to foreigners

However, there are some restrictions:

• Foreigners cannot directly own land or water within 100 km of borders and 50 km of coastlines, known as the restricted zone. However, you can still invest in these areas through mechanisms like bank trusts (fideicomiso) or investment funds, allowing you to enjoy property use while the bank or developer holds the title.
• To buy property outside the restricted zone, you must obtain a permit from the Ministry of Foreign Affairs (Secretaría de Relaciones Exteriores, SRE) through the Directorate General of Legal Affairs (Dirección General de Asuntos Jurídicos). This process requires a legal representative and a special power of attorney.

Tax implications and financial considerations

In Mexico, there are no additional taxes on foreign Real Estate beyond the standard transaction taxes like ISR (Income Tax), IVA, and property sale declarations. Additionally, you should consider notarial fees, registration costs, and other associated charges. Foreigners can also apply for a mortgage through a Mexican bank or institutions like Infonavit or Fovissste if they have residency and contribute to these systems.

Maximizing returns on your investment

While all investments carry some risk, real estate in Mexico can offer higher returns compared to other investment options.

You can significantly profit by investing in pre-sale properties or income-generating properties like condos. Diversifying your investments across different markets can protect against inflation and currency fluctuations.

Understanding exchange rates is vital. For example, if the Mexican peso has depreciated significantly against the US dollar, it might be an opportune moment to invest, potentially increasing your returns due to currency value changes.

Investing in Real Estate in Mexico can be a highly rewarding financial decision, offering both stability and growth potential. With the right knowledge and partners, you can navigate this promising market confidently and successfully.

If you want to invest in property, Puerto Escondido is an ideal option. Consider working with a local real estate agent like Osan Puerto. With their experience and knowledge of the market, they can help you find the perfect property for your needs.

You might be interested in:

• How can a Puerto Escondido real estate agent secure your rental investment?
• AMPI-certified: What it means for your real estate investment in Mexico