Pitfalls To Avoid While Buying Property In Mexico
ByAniruddha Badola
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Matt Hudson and three of his buddies were drinking in a bar one night and had the brilliant idea of driving their quads across the border and setting up a business in Mexico renting them. So one Friday they drove across, parked their vehicles on the beach, and put up a sign saying, “Rentals $25/HOUR”. Business was a little slow at first, so two of them decide to take a ride down the beach. Unfortunately they had been drinking a lot of beer and were not very steady drivers. They rolled over the quads, putting both the vehicles and themselves out of commission. While they were being treated, Matt rented another quad to a guy on the beach, who took off and never came back. The fourth quad was confiscated because Matt and his friends had no corporation and hence no legal status to do business in Mexico. There are several attitudes that cause problems for Americans who are trying to do business or buy Real Estate in Mexico:
1. Party mentality. It should be possible to go on vacation in Mexico and make some money on the side. Not likely. Matt and his friends made the mistake of trying to mix vacation with business. This is an (only slightly) exaggerated situation, but I have met many, many Americans who seem to feel that they are on vacation as soon as they cross the border. This greatly hinders their ability to conduct any sort of business transaction.
2. Greed. Great bargains in Mexico can be picked up likes shells on the beach. Not true. They can be found, but it takes times and effort to make a sound investment. Sara and Jenny had rented a beachfront condo in Mexico for several years. They decide if they could buy one. The owner of the one next door happened to be there one weekend when they were and told them he'd like to sell. The price was right, and they agreed to buy it. Jenny asked when they could meet with a notario to close the transaction. The owner said “Oh, we don't have to do that. It cost too much. Just give me the money and I'll have over the title. That's how is done in Mexico. Three months later Sara and Jenny Returned and found their condo occupied by another family who claimed to have bought it from the same owner. He had to return to the U.S and could not be located.
3. Ignorance. That's the way it's done in Mexico. Not if it's done right. People who say this are usually trying to cut corners. Buyers should always check the details of proposed transactions or engage a reputable person to check for them. Sara and Jenny gave money for the purchase of property to a complete stranger without an office or an established business. They allowed their greed to overcome their business sense and failed to follow proper procedure or even to find out what to proper procedure was.
Buying property in Mexico.
If you are an American or Canadian wanting to buy property in Mexico, here are some tips for you.
1. When you arrive in Mexico, turn off your vacation attitude and turn on your business brain. You will do better if you aren't distracted by margaritas and fun.
2. When buying property, do it right. In Mexico foreign individuals can purchase residential property with a bank trust. A Mexican corporation can own property outright, but only for business purpose. These are the only two legal ways of doing it.
3. Get a professional real estate agent to represent you, preferably a member of the Mexican Association of RealEstate Agents.
Author: Aniruddha Badola
MexicoSummer.com offers personalized assistance with Cancun Real Estate, Playa del Carmen Real Estate- in Mexico. The #1 Mexico Real Estate site offers a full range of Real Estate sevices for luxury vacation Villas, Condominiums in Mexico. If you are looking for any property in Mexico, just contact us!
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