5 Things to Consider Before Buying a Vacation Home in Mexico

If you’re planning to buy a vacation home in Mexico, you need to have a solid plan in place. After all, there are many factors to consider before purchasing a vacation home in Mexico.

New data from Caribe Luxury Homes reveals 75,500 people search for homes in Mexico each month on Google.

North Americans (US, Canada, and Mexico) make up for 52.4% of the people searching for Mexico Real Estate in the world.

“We’re getting an increase of people interested in vacation homes.” Says Zulema, co-founder, and director of Caribe Luxury Homes, a real estate advisory and agency aimed to help people buy property in Mexico.

Zulema says that in recent years, “there has been a huge push for the second home in the Mexican market.”

This is due to the growth of freelance and other professional work-from-home jobs choosing to vacation and work in Mexico.

Before you buy a vacation home, be sure to do consider the following:

1. Weigh the Pros and Cons

Even if you’ve decided to buy a vacation home in Mexico, it’s still a good idea to consider the benefits and drawbacks.

The benefits of buying a vacation in Mexico:

A vacation home is an investment. As a primary home, a vacation home is an investment. Especially in popular areas near beaches in Mexico. With a Mexican vacation home, you are able to sell for more than you paid for it.

You can earn money by renting it out. You can earn money by renting out your Mexican vacation home to guests. If you don’t plan on living in the home throughout the year, make it available to other vacationers.

You’ll save on vacations to Mexico. You can save money on vacations to Mexico. For example, if the vacation home is in Cancun, you’ll have to fly down. But otherwise, you’ll already have a place to stay.

You can enjoy longer vacations in Mexico. Owning a vacation home in Mexico makes it possible to enjoy vacations of a long duration. For example, you might stay at a hotel in Tulum for five or six nights and then cut your vacation short because your work has piled up. But if it’s your vacation home, you don’t have to worry about that. And if you work remotely, you are able to work from your vacation home, even if it is a small one.

Boost your quality of life. A vacation home in Mexico could help improve the quality of life. It isn’t all about money. You’ll have a place to recharge and relax, and you may be able to bring family members or friends along with you.

The drawbacks of buying a vacation in Mexico:

More expense. The costs of owning a vacation home in Mexico are inexpensive compared to other areas in North America. But, you do have to pay your property taxes, fees, and utilities as you do at your primary house.

You might want a change of scenery. If you travel to Mexico for a vacation, you’ll want to take advantage of that change of scenery. And if the novelty of your Mexican vacation home has worn off a little, it’s time to plan a trip somewhere else.

2. Make the Numbers

“It’s important to keep in mind extra costs. These might not immediately spring to your mind when buying a Mexican vacation home.”

Say’s Oscar, lead real estate agent of Caribe Luxury Homes, who helps Canadians and Americans find a vacation home in Riviera Maya Mexico.

Don’t forget to account for such things as homeowners association fees. But Oscar warns of the costs that come with maintaining a vacation home in Mexico.

Surprise bills that real estate agents might not mention upfront. It’s important to choose the right real estate agent who can clear all this up with you.

Renting out a Mexican vacation home or beach house can also carry certain risks. For instance, if you’re not careful about who you rent to, you might end up with people who damage your property or steal its contents.

Hiring a professional manager or buying a vacation home that’s fully managed can be a great option. Be sure to check this with your real estate agent in Mexico. Get all the numbers straight before making the decision.

3. Consider the Down Payment

Be sure to have your second home financing well in place before you shop or sign any binding offers.

When you’re ready to buy, think about getting a high down payment. Banks might be reluctant to offer second home loans on a property in Mexico.

If you are financing a vacation home in Mexico, be prepared to pay at least 25% to 35% or even 50% down.

The down payment on your vacation home in Mexico will be larger than the down payment on your primary house.

4. Understand Rental Income Options in Mexico

Consider renting out your Mexican rental home, if you want to make some extra money. It will offset the cost of your vacation home.

You don’t have to rent it for the entire year. But the more days you rent it out, the more money you can make.

You can deduct many of your expenses associated with renting out your vacation home. If the home is more of a business venture than a place to getaway.

Get advice from a professional, such as a real estate agent, to find out more about tax laws.

If you plan to rent out your Mexican vacation home, you’ll need to report the rental income on your taxes.

But you get to keep it tax-free if you only rent it out for under 15 days. If you do a mix of renting and vacationing, things get more tricky with your taxes.

But if your vacation home is more or less a side business, you can deduct a lot of the expenses that go with maintaining your rental.

Again, consult our real estate agent professionals.

5. Getting Started

Buying a vacation home in Mexico can be a lot of fun, but there are a few things you should know upfront to get started.

Find a Real Estate Agent in Mexico

When you’re looking to buy a vacation home in Mexico, it isn’t always easy to find the perfect real estate agent.

Do you want one that can speak Spanish? Or English would suit you better. Are you looking for an agent who’s used to dealing with clients from different states and countries?

If you are looking for a qualified and trained real estate agent in Mexico then contact our real estate agents.

They will help find your vacation property in Mexico at no obligation and at no cost.

Click here to contact them today.