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 What are the investment opportunities for a rental property?

There are opportunities to earn 5% – 10% return on investment for a rental property in Mexico. There are also development investment opportunities that can earn greater returns. Contact us for more details

 How do we rent the properties out and what are the costs?

Property managers are typically paid $60 – $100+ per month for the service, plus whatever the expenses are (replacing light bulbs, batteries, pest spraying, etc). This keeps your property well maintained.

Rental managers providing full rental services (marketing, screening, contracts, payment coordination, inventory, check in, coordinating cleanings, check out services) are typically paid a 20% commission to handle everything for you (if another agent brings a client they split that 10%/10%).

Many owners also post their properties on, kijiji, Craigslist, Facebook, and other websites, and then pay their property manager a “check in” fee.

Mexico has a hospitality tax of 2%, registering for the tax is a simple process.

Owners are responsible for declaring and paying tax on income derived in Mexico, however there is no double tax (tax paid in Mexico can be a foreign investment tax credit on your Canadian taxes). Ask us if you are American. [Note: we are not accountants, nor offering any tax advice. Any information needs to be verified if deemed important].

What are the costs we need to be aware of?

Downpayments in Mexico are typically 10% – 20% when paying cash (i.e. if you had a line of credit). However, this is usually only paid after conditions are removed, and a grace period of a week or two to give you time to make arrangements.

Costs you need to be aware of:

Closing costs in Mexico are higher than Canada or the USA, and only paid by the buyer. They are approximately 3% of the purchase price in government property transfer taxes plus about $7,000 – $8,000 dollars in set fees. These costs are in pesos, so they vary with the exchange rate and also varies per property [ex: if there is a mortgage these costs will be higher], and with law changes but this will give you a general idea of what to expect. Included in the closing costs are the legal fees, permits and registrations, appraisal, and the fees to set up your own real estate Trust for the property and also prepayment of the first years fees. The yearly fee for your Trust is around $500 USD.

Escrow services for a transaction is $800 USD (one time fee). This is optional, and strongly recommended. Lawyers, notaries, and real estate agents should not hold any escrow money. In Mexico, an entity must be specifically designated to provide escrow services. We commonly work with Stewart Title, which is one of North America’s largest escrow companies.

Furniture may be needed. If the place is unfurnished or needs some work, you will budget for these items. Pricing for furniture in Mexico is similar to Canada and the USA. For example, all furniture, appliances and electronics for a 2 bedroom condo starts at about $10,000 dollars and goes up from there depending on taste.

Insurance is not mandatory. If you will be renting your property out, liability insurance is strongly recommended.

If your property is new construction there may be some utility hookup fees.

Would you want a property manager to look after it for you when you are away? (Prices starting at $60 USD per month)

What do I do for insurance?

Homeowners insurance is typically $500 dollars per year for basic coverage and up to $50,000 in contents. Beachfront properties will pay more. If it is a condo they also usually have building insurance included in the price of the monthly Home Owners fees.
Car insurance is 1/3 of the price of BC, same price as Alberta. It varies per vehicle, but to give you an example a 2006 SUV is the equivalent of $350 USD per year for collision, comprehensive and theft.

Health insurance is available through major companies (ex: a 60 year old non smoker with a Mexico residence as their primary residence may pay about $1500 USD per year for major medical coverage in Mexico, USA and Canada), or you can get extraction insurance starting at a few hundred dollars a year (stabilize and take you back to Canada for treatment). You can just ‘pay as you go’ (doctors visit runs about $30).

As us about options on insurance providers.

 What does property tax look like there?

Property taxes in our area are 0.05% of the estimated value recorded in the deed, so most owners pay the equivalent of less than $300 dollars a year in property taxes (paid in pesos in January). You can pay property taxes online, via your property manager and have them send you the receipt, or in person.

What Property Management Services are Available?

Full services are available from reliable English speaking property managers that can completely look after your property (pay bills, repair items, conduct pest spraying periodically, check the property after summer storms, air it out when not in use, and more). Property management is available from $60+ dollars a month for basic services and varies on the size of the property and what services you require (pool cleaning etc). Most people prefer to buy in a gated community (condo association) because they look after most things for you – it can be easier than owning a single-family house here but there are also good people for pool cleaning, gardening and maintenance that are reasonably priced.

How much are the condo fees typically?

Monthly Home Owners Association fees range widely from $30 a month to over $1,000 dollars a month (see each property for details of what is included). Most fees cover common area maintenance, pool cleaning, garbage pick up, sewer, administration, staff, and building insurance. Some also include gas and water. Others include all utilities, cable tv, internet, and optional cleaning services (rare, but some resort style full service ownership exists). For a 2 bedroom 1400 sq ft ocean view condo $300 USD per month is typical. Prices vary per development, amenities, what is included, and size of property. HOA fees are usually due in pesos, so it depends on the exchange rate as well. Many foreign owners pay the entire year HOA fees at the same time.

What financing options are available?

You can get a mortgage in Mexico, however they typically want you to come up with 40% of the purchase price cash plus the cosing costs, and will finance 60% of the sale. Interest rates are 8.9%+ depending on credit score. New programs are just becoming available that may have costs of 3.5%. There is lots of paperwork to apply, and application fees in the range of 3% of the total purchase price. A Mexican mortgage is a viable option for some.
Canadian and American banks typically will not give you a mortgage for Mexico since they can’t foreclose on it if you stop making payments. They need to secure an asset in order to give you money.

There are different types of mortgages, some which have no prepayment penalties so if you get a chunk of money you can pay it down.

Some private sellers and developers will provide owner financing with a large down payment (typically 40% – 50%) and carry the property 1 to 2 years (in some cases up to 7 years). The property would typically be deeded into your name with a mortgage registered on the title in favor of the seller. With this potential option, you will not get the best “cash” price since you are asking for a vendor take back mortgage.

The most cost-effective option usually is to get a home equity line of credit from your home country if possible, however you may want to speak with a mortgage professional in Mexico to discuss your personal situation. Contact us for more details.

 Is financing available for a home in Mexico?

Many people dream of a home in Mexico, but paying for it completely may be out of reach for them.  Financing  is currently available for them, although at somewhat higher rates than in the US or Canada.  Some people prefer to have a loan against their property here, however, instead of purchasing it with a home equity line of credit on their permanent home in another country. There are now many loan brokerage firms in the Puerto Vallarta area that are making these people’s dreams a reality.

What is the meaning of the “fideicomiso” or bank trust, and how does it affect me?

Properties within 100 km’s of the borders and 50 km’s of the beaches must use a real estate Trust (in Spanish it’s called Fideicomiso) if being purchased by non-Mexicans. What does this mean? Your name goes on the deed, a Trust is created with you as the beneficiary that holds the title to the property. You have all the same rights to enjoy your property, and your kids can inherit the property. This is a safe, reliable method of ownership that over a million Canadians and Americans have been using for decades to own property in Mexico. Family Trusts or Real Estate Trusts are used by many people in Canada, USA, and Mexico as an asset protection and wealth management tool. For this you pay a yearly fee of about $500 USD, and is administered by a bank of your choosing in Mexico. It is not an asset of the bank, and they are legally obligated to follow your instructions as long as it is within the bounds of the law.

Some Mexican nationals also own property through a Trust, as it has 3 big benefits: no probate, no death taxes, and it is creditor protected.

 What about Capital Gains taxes? How could they affect me ?

Typically sellers are responsible for any capital gains taxes. Mexico currently has created three levels of capital gains taxes: total exemption, partial exemption, and no-exemption.  As within any other country, Mexico levies these taxes and also continually changes these tax codes, and always will.  It is important that you discuss with your Global Team member your specific property and qualifications in order to understand where these types of taxes may directly affect you.  But, in a nutshell and for a general understanding, here is an overview of the current types of capital gains taxes here in Mexico.

No Exemption:  Basically, if you do not qualify for either of the other types of capital gains taxes, you pay 35% of the net gain minus deductions that include brokerage fees, capital improvements that are verified with “facturas” (official receipts) or an independent appraisal, and an allowance for inflation.

Total Exemption: If you reside in the property for 5 years or more, have a Permanent or Temporary Visa (formerly FM2 or FM3), working status with an RFC number, an escritura and receipts of electricity (CFE) or telephone bills, you could qualify for total exemption on an unlimited amount of gain on the sale of your property.  This exemption is intended to be for residents and the requirements for it are meant to prove to the Notario and to Hacienda, Mexico’s taxing authority, that you are indeed a resident of Mexico.

Partial Exemption:  Under this classification, only a portion of the gain is taxable under a very complex calculation that must be determined by a Notario since the factors of it change almost daily.  The same requirements apply as with the Total Exemption, but the property can be help for a little as 6 months or more.  Because of the intricacy of the calculations, it is important to work closely with your Global agent to ensure that the process is complete and that you receive the most exemption that you can qualify for.

What if the property I like is “ejido” property?

Ejido property is basically property that was given by the Mexican government to the people of an area as communal, co-op farm land, many years ago.  It is not “regularized” property, or property that has a legal title and deed, but is communally owned by the group of indigenous people of that community.  A non-Mexican person cannot own such property unless it goes thru an extensive and expensive process in the government of the state to become regularized.  Basically, unless the ejido, or tribal council, approves it, the title would never be in your name, and therefore, there would always be a chance, even if a remote one, that the ejido or some member of it, would reclaim the property at some future time.

There are many, many properties of all types available in every area of Mexico that are not ejido properties.  We will be glad to help you find the perfect place that you will be able to own with the confidence and security that you will want to have now and for generations to come.

 Is it legal for me, a non-Mexican, to own property in Mexico?


You will see that it is not only legal to own property here, but also a relatively painless process to purchase your dream vacation getaway or retirement home in Mexico.  At Global we make sure that you not only understand every step of the transaction, we also make sure that all of it is completed in a professional and thorough manner to help it be a smooth process for you. Have questions? We are here for you. 

What will a Global Agent do for you as your realtor?

Understanding what your realtor does is important.  At Global  we go “the extra mile” for each and every one of our clients.  If you are looking for a property to buy, we will provide you with information to make sure you have all the facts to make a good decision.  If you are selling your property, we will do extensive research into comparable properties, the minute aspects of the market in the area, and into many other areas in order to help price your property at a price that is both attractive to buyers and advantageous for you.  With extensive advertising, both locally and internationally, you can be sure that your property will be marketed professionally and completely.

 Does he know the area that you are interested in and have a working knowledge of the benefits and challenges of each area and developments in that area?

At Global Real Estate Vallarta, our agents live and work in the area and understand not only the benefits of each development, but we delve into the deeper aspects of them so that we can effectively communicate this information to help make your choices easier.

Are they a member of a professional real estate association like AMPI?

Fred Ayotte is Global Real Estate Group Managing Broker. Fred is a fully licensed AMPI Broker Associate meeting all the licensing guidelines from AMPI the Accredited Real Estate Association that governs licensing for Mexico.

As a member of AMPI, our Team will work within the guidelines of the association and perform both ethically and legally in all manners.  The realtors at Global pride themselves on being members of AMPI and on being completely professional, understanding the laws and regulations that may affect your transactions in Mexico.

Fred Ayotte in addition holds the position of Vice President of AMPI Compostela Real Estate Board.
He is currently an active Member of Multiple Listing Service Committee and Compliance Board of Realtors.

He also an active member in good standing on the following boards and services committees for AMPI and AMPI.

  • AMPI MLS Compliance Board of Realtors ( 2013-2015 Active) 
  • AMPI MLS Education Committee Board of Realtors (2014-2015 Active) 
  • AMPI Honour and Justice Committee Board of Realtors (2014 -2015 Active) 
  • NAR, International Member (U.S. National Association of Realtors) (2011-2015) Active


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