Real Estate by Inside Mexico

Puerto Vallarta and the Riviera Nayarit, "Exploring Old Town"

Shauna — Wed, 27 May 2009 11:53:01 -0700

Puerto Vallarta and the Riviera Nayarit, "Exploring Mismaloya - South Shore"

Shauna — Wed, 27 May 2009 11:46:42 -0700

Puerto Vallarta and the Riviera Nayarit, "Exploring Punta de Mita"

Shauna — Wed, 27 May 2009 11:25:33 -0700

Puerto Vallarta, "Exploring the Marina - Hotel Zone"

Shauna — Wed, 27 May 2009 11:12:25 -0700

Puerto Vallarta and the Riviera Nayarit, "Exploring Amapas and Conchas Chinas"

Shauna — Wed, 27 May 2009 10:49:56 -0700

The life of a full-time housesitter

sue-ellen — Thu, 21 May 2009 06:36:40 -0700

Steven Miller stopped paying rent years ago, but he never lacks a comfortable place to crash. The retired U.S. Air Force officer housesits fulltime in the Lake Chapala area – and sometimes other places – and finds no shortage of homeowners looking for someone to care for their places while traveling or heading back north. A quick glance at his calendar shows no free time until November, when he plans on heading to Argentina for several months.

He broke into housesitting by accident and never advertises his services. While he seldom complains about his lifestyle, the occasional mishap – like having the refrigerator suddenly quit – can sap the joy out of an assignment. Miller spoke to Inside México about the ups and downs of housesitting and the places he’s lived.

Inside Mexico: How did you get into housesitting?

Steven Miller: About four years ago my neighbor asked me to housesit for them and move into their house while they were gone. I was renting a large home at Lakeside (the Chapala area) ... and could have just fed the two small dogs as needed, but homeowners want someone to live in the home, watch over it and the pets, and sleep there. After that, it was was all word of mouth and non-stop requests ever since.

Two reasons I’m in demand: I don’t charge and I often fix things that don’t work. I have two pensions so I’m financially secure.

IM: What are the benefits and the downside of what you do?

SM: Living in luxury homes year-round, rent free that usually include a maid, gardener, pool and spa, is an attractive lifestyle. I enjoy the pets and the change of pace, homes, and locations. But best of all, I meet the nicest people and often become good friends. “A downside is that when you need a fork it’s not in the same drawer as the last home and the light switches have moved. I had to fire a gardener once, but hired and new one that was much better. One home sprung a water leak on the roof in the middle of the night and flooded. I fixed it and the maid and I had all the clothes and such dried out, cleaned and put back so the homeowners didn’t know until they returned. There was little evidence of a mishap. It also helps to be mechanically inclined.

IM: What have been some of the best assignments you’ve received?

SM: The best ones are long term, three or four months in great locations. I’ve had many, including a large, luxury, Mexican home in San Miguel de Allende which included the use of a big, new Honda all-terrain vehicle. Housesits Lakeside often include use of a car, but ATVs are more fun.

IM: What kind of home style is most common in Ajijic/Lakeside?

SM: Most are quite large, newer, hillside lakeview homes with pool, lush gardens, and breathtaking views of Lake Chapala. Cool breezes and gorgeous sunsets are the norm. Most are quite modern with all the amenities including a gourmet kitchen, dishwasher, whole house softened and purified water, satellite TV, wireless high-speed Internet, and a large carport for my minivan.

Long term stays in Mexico City

sue-ellen — Wed, 20 May 2009 20:42:39 -0700

Somewhere between a hotel and an apartment, these long-term stay residences can be a good option for business people, students and others who are in town for a week or longer.

Platón 294, Polanco, 150 m2, 1 BR, 1.5 bath, 2 parking spaces, 24-hour security + elevator. $2,800 USD/month.

This partly furnished condominium opens to a narrow hallway of stark white walls and light formica floors. A clear plastic bookshelf - perhaps a touch of postmodern humor -- is dotted with old hardcover books, and a wall of floor-to-ceiling French windows faces the tree covered street. Rising architectural star, Andrés Mier y Terán (he's responsible for the design of restaurants Moshi Moshi and La Crepe Parisienne Bistro, among others) emphasized the apartment's industrial elements - corrugated metal ceilings, a grey brick wall in the living room - with thick plastic detailing, glass, and raw metal touches scattered throughout. This loft has plenty of style, yet minimalism is a love-it or leave-it affair. For some it is the epitome of simplicity; for others it is just lacks soul and warmth.

Suites Ejecutivas Giorgio, Río Lerma 166, Cuauhtémoc. From 75 m2 to 100 m2, from 1 - 2 BR, 1 - 2 bath, 1 parking space. 24-hour security + elevator, gym, and maid service. From $2,000-$3,300 USD/month.

The Giorgio's basic and no-frills design walks a line somewhere between a hotel room and a nomad's apartment. Plain, dark wood furnishings invoke quiet, solid practicality rather than flair and overt aesthetics. Designed with business travellers in mind, these suites come with high-speed internet in every room, a small business center with computer ports and a conference area, and hotel services such as daily cleaning and cable TV.

If you're staying in to work, you'll have a comfortable living room, a large couch, desk, work table and a well equipped kitchenette. The central location also puts you within walking distance of the Ángel de la Independencia monument. The Giorgio is less than a year old and doesn't yet have a restaurant or room service, yet Río Lerma street is a popular hang out offering sports bars and restaurants; you can cruise more eateries and bars in Zona Rosa, a 10-minute walk away.

The Red Tree House, Culiacan 6, Condesa. Apartment: 95 m2, 1 BR, 1.5 bath, roof garden Also available: three individual rooms (two share a bathroom), communal kitchen and living areas. Free wi-fi throughout the house. From $50-$150 USD/day; the apartment has discounts for week- and month-long stays.

This casa de huespedes (guest house) welcomes you with a colorful, bohemian palette, friendly hosts and a very playful Labrador. The building, which neighbors have baptized "The Red Tree House," is perched in the heart of trendy Condesa, only a short stroll from skads of neighborhood restaurants, cafes and bars. Tasteful contemporary paintings, luscious fresh flowers and potted plants decorate the house where light is the central element. Flood light mingles, to great effect, with that of floor and hanging lamps, candles and even a few oil torches.

The rooftop apartment's color scheme -- mustard yellow and crimson - along with red terracotta tiling and large windows which allow in natural light and gentle breezes, combine to give more a feeling of hacienda than city dwelling.

A very minor downside for those renting the rooftop apartment is the need to share the main entrance to the house with other guests.

It's clear that the Red Tree House has been a labor of love for its owners.

Farming the good earth

catherine — Thu, 07 May 2009 11:58:49 -0700

Inside México: How did you come to live here at Rancho San Jose?

Barbara Hoet: We were living near Malinalco, and we had some friends who knew Arturo Farias, the farm’s administrator. They thought it would be perfect for us because we could work part time and still have time for our art. We came to visit, and moved in the next day. We’ve been here for ten months.

Mike Hoet: This is a demonstration site, to show how you can have a natural place that is also close to a city.

IM: What do you grow on the farm?

BH: We have onions, lettuce, garlic, cilantro, parsley, spinach, beans, beets and corn. In the beginning, we didn’t know about planting, it was all new. It took us six months to figure it out, what we can plant and can’t plant. We had to learn what you could plant in the rainy season.

We’re still experimenting, and learning a lot.

We grow enough here to feed ourselves. What’s left over, we’ll trade with the neighbors, and some of it Arturo will take to the city to be sold in [organic supermarket] the Green Corner.

IM: What’s the history of this rancho?

MH: Four years ago it was a sheep farm, before that it was cornfields. The river [that flowed through the land] was dammed for agriculture 60 years ago. This whole area used to be a lake, and it’s finally growing back [to be wetlands again]. Now there’s water here until the end of the dry season. But it’s still fragile.

BH: We now have kestrels, cranes, herons, ducks, egrets, mallards, moor hens, and redwing blackbirds on the land. The field is full of peppermint and sage. In the summer it’s spectacular; at night the frogs make wonderful music and the field lights up with fireflies. It’s something to see! IM: How is living here different from other places you’ve lived?

BH: Unlike many organic farms, which are usually quite isolated, the neighbors are close by, we’re connected to the town [of Amanalco]. People say it looks abandoned, they don’t quite understand what’s going on. They remember how it was when it was a cornfield. [Malinalco] was very isolated.

Being that isolated is meditative: you go inside yourself and become very introverted. You store up a lot of information. Once you leave, you want to bring it forth. Here, we are close to Valle de Bravo, and we connect more with people and culture, with what’s going on.

IM: How long do you plan to stay here?

BH: We’d like to be here one more year, to experience another full growing season. We don’t know where we’ll go next, but we’ll know it when we’re ready. Doorways come open, and you make the connections you need.

MH: We’ll almost certainly stay here in North America, though. We love the nature here, the wilderness, and the vast open spaces of Canada, the United States and Mexico.

IM: How has living here influenced your work?

MH: The concept of the medicine wheel [a Native American circle of stones traditionally used for gatherings, ceremonies and healing] has been a part of our work for some time now. Being here, seeing the land heal itself, it has become even stronger.

BH: I need nature to be able to write, to get the inspiration. I love to work with the soil, to put a seed in the ground, see it grow, then harvest the plant and eat it. It is a privilege to witness this, and through writing to share it with others.

Rancho San Jose is a member of WOOF (Worldwide Opportunities on Organic Fams). To volunteer on the farm or stay in the cabins, contact Barbara and Mike at barbaramikehoet@web.de, Tel (726) 251 0090.

The Hoet’s art and poetry exhibition “The Dance of the Sun Dolfins” will be on display at the Casa de Cultura in Valle de Bravo, Sept. 8-29, 2007. They will also give a conference on the Medicine Wheel.

Homes for young professionals

catherine — Thu, 07 May 2009 11:11:14 -0700

Tonalá 131, Roma Norte
85m2, furnished 1 bedroom, 1 bath, street parking, $7,500 pesos includes utilities, wifi, cable.

Bright sunlight massages every corner of this spacious, fully renovated and tastefully furnished apartment. A long corridor illuminated by glazed windows leads from the entrance to a living/dining room with high ceilings, floor-to-ceiling windows and original wood parquet floors.

The spacious bedroom has more floor-to-ceiling windows, a ceiling fan and a deep closet with sliding doors. The galley kitchen, painted a cheerful yellow, is narrow but well-designed, modern with sufficient working space and plenty of cupboards. The bathroom, small but charming, is near the entrance.

Lafontaine 226, Polanco
65m2, 1 bedroom, 1 bath, street parking, $8,000 pesos includes maintenance, water.

With a little fresh paint and some imagination this apartment could be comfortable and cozy. Floor-to-ceiling windows in the rectangular living/dining room look out onto a green interior patio with a fountain. Decorative wood paneling and a small non-working fireplace lend warmth to the room.The bedroom is long and ample, fitted with deep closets.

Sliding glass doors give onto a two meter plot of earth, accented with potted plants set against a bright orange exterior wall. There’s also access to a tiny patio with a sink where you can wash and hang laundry. The kitchen is small but bright, with new appliances and a large window onto the building's communal patio. The bathroom has shower not a bath and some built-in closet space.

Huichapan 20, Condesa
40m2, studio with separate kitchen, 1 bath, rooftop terrace, laundry on premises, street parking, $6,500 pesos includes maintenance, gas, water.

If you emphasize aesthetics and location over size, you may love this apartment in the art-deco gem at Huichapan 20. The lobby and marbled stairwells have an elegant old world feel and are tastefully decorated with late 19th century-style paintings and sculptures. These common spaces, as well as the large tiled rooftop terrace, are immaculately maintained.

The apartment is tiny, with just a main room, separate kitchen and bathroom. Its well-designed layout and high ceilings manage to give the space a gracious air, with distinct spaces for sleeping, living and eating. The main room has two closets. The bright kitchen, though fairly narrow, has a large pantry and a door to a back stairway which leads to the rooftop terrace.

For more information on real estate in Mexico, email realestate@insidemex.com.

How a fiador works, part 2

catherine — Wed, 06 May 2009 13:22:48 -0700

So you’ve arrived charm and good luck have managed to snag a property-owning friend who is willing to act as a guarantor for the dream apartment you’ve found. Congratulations, you’ve got a fiador!

Renting with a fiador on your side is relatively straightforward. A personal fiador is someone who holds an escritura, or real estate title, and who posts their property as a guaranty that you will not default on the rent. They also agree to assume responsibility for the lease in the event of nonpayment. The legal representative of a sponsoring company or embassy can also act as fiador.

A standard rental contract generally includes a line for the renter, landlord and fiador to sign. Sometimes landlords can be convinced to accept a goodfaith signature of a “poder” instead of an actual fiador. Exceptions like these are usually only made for large multinational corporations or embassies.

Beyond signing the contract, a fiador will have to provide official identification, a copy of the escritura, and a proof of payment of property taxes (ultimo predial pagado). The landlord will then confirm the title is registered in the public records. Once cleared, the rental contract can be signed.

Unfortunately, many rental properties slip out of their hands because a renter can’t find a personal guarantor. Some landlords prefer and only accept fiadores either for safety, ease or because they want to keep the process private and in that way avoid registering the rental property and paying corresponding taxes.

In the event that you can’t produce a fiador, or just don’t feel comfortable asking a new friend to wager personal property, you can purchase a fianza, or bond contract.

Fianzas are insurance policies that assume the third party responsibility of a fiador. Contracting a fianza generally requires a 10% premium of the year’s contract. Most major insurance companies and financial institutions sell fianzas. When shopping around for an afianzadora, be wary of small outfits, as many have gained a reputation for taking your money and disappearing.

Before accepting the risk, afianzadoras require the rent contract, a formal application, official identification, income and/or bank statements and proof of current residence.* Foreign residents will be asked to provide legal migratory forms. These will be used to assess the applicant along with a credit check.

If approved, the afianzadora will bear the responsibility for the rent contract. Some policies also include ‘services’ clauses which take responsibility for utilities, structural damage and legal fees. These extra services often make fianzas more attractive to high-rent landowners.

All this can seem a bit overwhelming at the outset, but once you’re settled into your new home you’ll look around, sip your limonada, and realize it was well worth the effort.

*Requirements are specific to each insurance company and are not limited to those mentioned.

Please send comments and questions to: realestate@insidemex.com.

What does $750,000 USD buy you?

catherine — Wed, 06 May 2009 13:07:07 -0700

If you’re like us, you don’t spend much time hanging out with Mexico City’s uberwealthy. So this month we thought it’d be fun to take a peek behind the walls at how the thin upper crust lives.

Cerro de la Escondida 133, Pedregal San Francisco

800 m2, 5 bedrooms, 5 baths, 2 1/2 baths, gym, squash court, service quarters with bath, 1-bedroom apartment, 6 parking spaces, security

Right angles are rare in this multistory split-level in a leafy, gated community near Coyoacán’s center.

The circa 1980s architecture is a frenzy of pentagonal rooms, tear-drop-shaped skylights, simulated faux-classical columns and smoked mirrors etched with swirling designs. Its sheer size – with squash court, gym and steam baths on the bottom level and an apartment at the back of the garden – helps compensate for this home’s crowded feeling.

The living room/dining room features a black lacquered bar and free-standing cut-glass panels.

The spacious kitchen, with lots of shiny red cabinets, opens to the family room. One level down is a small office, a semi-enclosed conference room and a parquetfloored “party salon” which lets out onto the garden. Bedrooms on the top floor each have bath and dressing rooms, with a jacuzzi in the master suite.

Millet 50, piso 14, Insurgentes Extremadura

380m2, 3 bedrooms, 3 1/2 baths, service quarters with bath, 2 terraces, elevator, 1 parking space, valet, security, common rooftop patio

The view from this two-story, penthouse-style apartment features glass office towers, antique church steeples and the soaring Popocateptl and Ixtaccihuatl volcanoes. Below, a palette of peaceful greens is splashed with lavender from blooming jacarandas. Half a block from the din of Insurgentes, the apartment tower stands partly inside a lush, sunken green expanse in the city’s urban heart known as Parque Hundido.

Inside, the elevator opens into the foyer and a small game and bar area. Past a cozy study, a comfortable living room has a faux chimney and glass walls that maximize the dizzying vistas. A large dining room and master bedroom one floor below both have terraces. On the roof a communal entertainment center is under construction.

Bosque de Cerezos, Bosques de las Lomas

600m2, 4 bedrooms, 4 1/2 baths, garden, central gas heating, service quarters, six parking spaces, neighbourhood security patrols paid for by residents

High ceilings, tall windows and hilltop views add light and space to this conservative but elegant house in the posh Lomas district. A crystal chandelier dominates the marblefloored entrance foyer, opening into a stately living room with floor-to-ceiling windows and glossy wood floors.

The terrace overlooks a wooded ravine and wraps around a corner to a patio and large garden dominated by a 20-year-old pine tree. Off the relatively small kitchen a walk-in pantry has room for an extra fridge. The sunny breakfast room, as big as many formal dining rooms, leads to a grander comedor with a built-in china cabinet.

Cedar shelves line the walls of an ample library. A wooden staircase leads down to the bedrooms, one with a glass-enclosed balcony that has been converted to a workout space. The partially enclosed roof has a bathroom and a laundry room.

For more information on real estate in Mexico, email realestate@insidemex.com.

An actress's spiritual home

catherine — Wed, 06 May 2009 12:46:04 -0700

At Roma Norte’s northern edge, just a few steps off Avenida Chapultepec is a narrow street sheltered by a canopy of green and lined by grand old homes from the early twentieth century. It’s a place where time seems to have stopped, where you can still feel the elegance that once prevailed in the heart of the city.

“The neighbours have been here many years,” says Patricia Reyes-Spindola, the award-winning Mexican actress and head of a theatre school. “The couple next door, the teachers, they’ve been here more fifty years. Across the street, forty years. On the other side, fifty years. The one next door, I think sixty years.”

At just six years of residence, Reyes-Spindola is the new kid on the block (though she does have some history here; her grandparents lived in Roma). She fell in love with the house almost immediately.

“I believe in energy good energy and bad energy. And I believe this house has good energy,” she says, her eyes sparkling. “Can you feel it?”

Maybe it’s the stately high ceilings and elegant lines of the collection of mid-century furniture, or the eclectic artwork that fills the walls, or her low sexy purr of a voice, but I think I can.

Energy is just one element of Reyes-Spindola’s spirituality, a unique mix of beliefs and traditions. In the foyer I spy a Chinese good luck symbol, and a small dish of grain and maiz, an offering to the gods, says Reyes-Spindola, who will protect everyone in the house from hunger. Then there’s the huge stained-glass angel in the window over the front door.

“I love angels. I really believe in their power,” she explains, standing at the foot of the stairs, bathed in multicolored light. “This is made from power colors [bright red, yellow, royal blue] that were chosen to suit the people who live in the house. When I come down the stairs in the morning I see the colors and they fill me with positive energy.”

The house has a quirky history that appeals to the dramatic actress in Reyes-Spindola. She tells the story with relish as we wander from room to room.

“The first owners were Italian and none of their children ever married. One became a nun, and the other two lived here with their parents for their whole lives. The nun survived the rest of the family, and when she died she gave the house to a group of nuns. But they didn’t have money to keep it up, and so they sold it to a bachelor.” She laughs. “It’s been a house for singles!”

We step from the formal dining room into an enclosed courtyard drenched with sunlight and are welcomed by a bright green parrot named Lola.

“Puuuta!” Lola squawks at me, after some prompting.

“She only says rude things,” laughs Reyes-Spindola, rewarding the bird with an orange slice. “I’ve tried to teach her to say other things, but she never learns.”

***

For a woman whose work demands a lot of creativity, I ask if there’s a part of her home that acts as a muse to her.

“Come with me,” she says. We climb three flights of stairs to the new addition, her rooftop studio with an open-air kitchen and large terrace.

In contrast to the heavy wood and dark coziness of the lower floors, it is all air, space and light. The terrace is lined with flowering plants. A fountain gurgles cheerfully. Birds sing at top volume in the trees below.

“This is my space,” says Reyes-Spindola, her face bright with pleasure. “My spiritual space. I have my plants, my music. I like to take photos, and I can do it here and work on my computer. This is where I relax.”

We stand together for a moment enjoying the tranquility of her roof top refuge.

“I want to live the rest of my life in this house,” says Reyes-Spindola. And I can certainly see why.

What does $1,000,000 pesos get you?

catherine — Wed, 06 May 2009 08:32:17 -0700

That Polanco palace is probably a pipe dream, but for a price tag of one million pesos you can turn up decent-sized apartments in good, centrally located neighborhoods.

Cuauhtémoc 1378, Santa Cruz Atoyac

68 m2, 2 bedrooms, 1 bath, 1 parking space, 24-hour security + elevator, small gym and rooftop terrace

Hunkered alongside four-lane Av. Cuauhtémoc, this one-year-old complex puts you across the street from Del Valle, a five-minute walk from Metro Zapata, and a short jaunt from Plaza Universidad. There are banks, supermarkets and a movie theatre close at hand.

The living room/dining room is compact, as is everything in this laminate-floored apartment. The natural light coming through half-frosted windows opens up the space a bit. A cuarto de servicio off the kitchen can fit a washing machine and an extra pantry. Counter and cupboard space are limited, and there is no additional storage.

The bedrooms, one slightly larger than the other, don’t come with closets. The view of the mechanic’s shop in back is not much to look at, but in the distance you see the silhouettes of mountains. An $800 peso/ month maintenance fee covers the small communal gym, which includes a treadmill, an elliptical machine, and a weight machine.

Obrero Mundial 239, Navarte

97 m2, 3 bedrooms, 1 bathroom, 1 parking space, no elevator, 4th floor

You’ll get a workout climbing to the fourth floor, but the treetop level perch is a darn good reward. Parts of Obrero Mundial are traffic-busy and not so pretty, but this block is shaded by greenery. Highlights include the living room/dining room with floor-to-ceiling windows and a balcony, and the charming kitchen with glass-paned cupboards and rustic tile work.

Arched doorways line the hallway off the dining area. The black-tiled bathroom has two entrances: one off the hallway and one from the master bedroom. Of the three apartments, it is the only one with a vanity sink instead of a stand-alone model. In the two smaller bedrooms the closets are awkward, built out of the wall instead of inset. Remodeling would fix it.

There is no cuarto de servicio, but on the roof is a common room for installing your own washer and dryer.

Nuevo León 221, Condesa

92m2, 2 bedroom, 2 bathroom, communal terrace, street parking

The 35-year-old yellow building, across Baja California from the heart of Condesa, was completely renovated in 2000, and the current owners added hardwood floors to the living room/ dining room about six months ago. They also built a bar that partitions the kitchen and living room area, an excellent set-up for entertaining.

Wall-to-wall carpet covers both bedrooms, which look onto the building’s terrace. The master bedroom (which is accompanied by its own bathroom) comfortably fits a king size bed and comes with a full wall of deep built-in closets and shelves. The second bedroom is smaller and has no closet. The full hall bathroom is little.

The kitchen is divided in two by a wall of pantries and cupboards – more storage! The cuarto de servicio, off the kitchen, fits a washer and dryer. As the only apartment on the ground floor of a nine-apartment building, it has more privacy, though less sunlight.

For more information on real estate in Mexico, email realestate@insidemex.com.

How a fiador works, part 1

catherine — Wed, 06 May 2009 08:10:30 -0700

Days, weeks or even months after scouring the classifieds, talking to realtors and touring so-called “rooms with a view” you’ve finally found the perfect rental property and you’re anxious to end the search and settle in. Sound familiar? If so, you know that the work has only just begun.

Renting property in Mexico is a civil act, regulated by each state, and in Mexico City (as well as in most other states) rental law includes a fianza or a fiador. This means that beyond the renter’s contract, and security deposit, the landlord also requires a personal guaranty contract, committing a third party to assume the obligation of the lease in the event that the renter defaults.

Essentially, someone – an individual, organization or institution– has to vouch for the renter.

Many landlords will first ask for a fiador. A fiador or guarantor, is a property owner (individual or company) who co-signs with the renter. A fiador must have real estate registered in her name. This property can be held as leverage if the renter doesn’t pay. Depending on how the contract is constructed, landowners can legally sue the fiador directly without first suing the renter.

Despite the risk incurred, it’s common practice to co-sign for the sake of a friend: “I trust the people I’ve done it for, and I’ve never had a problem. If I can help friends simplify their process, I’m happy to do so” says Cristina Garcia, who has agreed to be a fiador for numerous friends.

However, this is where many new arrivals run into problems. Many of us arrive without personal contacts or a sponsoring company. Unfortunately, we immigrants often lose out on our dream rentals because we cannot turn up a fiador. It feels a little awkward to ask someone you’ve just met to risk their personal property for your sake.

Lacking a fiador, a renter may be allowed by the landlord to purchase a fianza – bond contract – from an afinanzadora – financial institution specialized in performance bonds.

Fianzas are, essentially, landlord insurance paid by the renter; the renter pays a premium (around 10 percent of a year’s contract) so that the institution will assume liability in the event that the renter defaults.

Although small property owners often discourage this option, Phillip Hendrix of Coldwell Banker recommends fianzas to landlords because they can go directly to the afianzadora to recoup lost rent instead of suing someone.

Landlords who have had very bad experiences have been known to ask for both a fiador and a fianza, though “if you have a fiador – there is no need to spend the extra money on a fianza. One or the other should be enough,” says Patricia Hogan, of International Relocation Services.

The moral of this tale? If you are new to Mexico and need a place to live, look for close, property-owning friends while you’re scouting those apartments.

Happy hunting!

Next Month: Step-by-step advice on getting a fiador and acquiring a fianza.

City streets: Inside a Colonia Roma apartment

catherine — Tue, 05 May 2009 22:28:13 -0700

Inside México: What do you do?

Óscar Cedillo: I’m the head of the Community and Culture sections at the daily newspaper Excelsior.

IM: How did you get your start in journalism?

OC: Print journalism was never my passion; I had always wanted to work in film. But I started working at the newspaper El Financiero in ‘96-’97, after leaving school. I started writing articles, then I went from there to Reforma, where I worked in the Justice section, then to Metro (Reforma’s daily tabloid). That’s when I really fell in love with what I was doing. I love the popular aspect of the job. I love seeing the sordid side of life: the kidnappers, the thieves, the prostitutes, the gangsters… I’ve interviewed them all. In the streets I meet all kinds of people. I’m energized by the theatre of the street.

IM: Your walls are covered with art and images from film. Where did this interest come from?

OC: Actually, I’ve always been interested in film. My father is a real cinephile. Before I was even old enough to read, my dad and I would go to the movies together. We’d watch the films and eat a roast chicken. I learned everything about film and saw the great icons like El Indio Fernández. We’d go to all kinds of theatres, from the piojitos (popular cinemas) to the nicest ones. We saw classic films, Mexican films, international films, good ones, bad ones, everything. I even remember seeing these horrible Russian films.

IM: What are your favorite films?

OC: The Godfather, Scarface, and Taxi Driver. I love Martin Scorcese’s sensibility.

IM: Why did you choose to live in Colonia Roma?

OC: I lived in Condesa for a long time, before it was fashionable. It’s a great neighborhood but I got tired of the traffic and all the people. A friend of mine was living in this building, and he told me about this apartment. I’ve been here for three years now.

I grew up in [nearby Colonia] Doctores, so Roma for me is like the same old familiar barrio. It’s great to be with the people, to be in the streets, to convivir. I have a good relationship with the people around the neighborhood, like the zapatero and the señora down the street who sells quesadillas. I’m completely at home in Mexico City… I can’t get enough of the luchas, the cantinas and the popular markets. I go the beach for a few days and I get antsy to be back here.

IM: Do you think the gentrification of neighborhoods like Roma is a bad thing?

OC: I don’t think so. The neighborhoods aren’t losing something, they’re getting better. The aesthetics are improving. I can have my comfortable apartment here, and still have the life on the street. Like a lot of formerly popular areas – Escandón, Condesa, Navarte – in Roma you get the neighborhood, but now you get the services too. It’s the best of both.

Mexico is a very visual place, the language of the barrio is visual. People come from outside and find value in the popular way of life, which we ourselves don’t always do, since we’re in it every day and can’t see it.

But I’m very proud to be from the barrio. It used to annoy me when intellectuals would come here and consume the culture, but now I want them to have it and understand it. The way I see it, they can come and get inspiration and write about it, but I’ve already lived it.

Casa del Indio's legacy

catherine — Mon, 04 May 2009 20:32:29 -0700

Inside México: What do you do?

Adela Fernández: I’m a writer. When I was young, I studied music and painting but I got my start as a writer answering my father’s [Mexican film director Emilio “El Indio” Fernández] love letters. He had many girlfriends, and they’d send him letters, but he never answered, which I made me sad. I learned his handwriting and wrote back to them. Of course, this complicated his life quite a bit.

IM: Is the house a good place for writing?

AF: It’s awful! People come by all the time, unannounced. They just ring the bell. Between the interviews, the box office [for the play “Cada Quien Su Frida”, now being performed at the house] and taking care of the house there’s no time. The only time I can write is from three to six am, when it’s quiet. Right now I’m working on a novel.

IM: When was the house built?

AF: Construction started in 1947, and it was built by architect Manuel Parra, who made movie sets for my father. My father was a dreamer; he had luxurious tastes but not much money. So everything for the house came from somewhere else. They went to Puebla and found old tiles for the floors. They brought back materials from demolitions in the Centro. They built a window made of caoba wood for the set of a movie they were working on, and when it was done they installed it here. This house was born old. It was always under construction.

IM: What was it like growing up in this house?

AF: This was one of the most beautiful times in Mexican culture, the 40s and 50s. All of the artists and intellectuals of the day would meet here. I remember seeing all the gente guapa, the actresses were so glamorous and beautiful. I would see [actress] Dolores del Rio here, Frida [Kahlo], Diego [Rivera].

Among this crowd, there was a very strong sense of Mexican pride and social justice, and a great interest in our prehispanic roots. They wore traditional clothing, and muralism, a popular art, acquired new importance. There is a nahuatl word called toltecayotl, which means “meeting of artists with God in their hearts,” and that was the philosophy of the gatherings here. This house is the child of all those ideas.

My father had many gringo friends, but he didn’t want to see the Mexican culture subsumed by North American ways. So for many years, plastic things were forbidden from the house. We cooked with wood. There was no light or electricity, only candles. When eventually he decided to allow electricity into the house he said, “Thomas Edison is an adopted Mexican.”

IM: Do you still think of this as your father’s house?

AF: This house is my father… it’s made in his image. He was a very strong man, and the house is also strong. It’s a living being, with its own energy and spirit. It demands. Its diurnal side is warm and sunny, comforting. The nocturnal side is dark, a kind of underworld. Here were used to living with both the lights and the shadows.

Call (55) 5573 9391 for tickets to Cada quien su Frida.

Apartment hunting with $200,000 USD

catherine — Mon, 04 May 2009 20:17:32 -0700

Mexico City’s property market is booming. With new apartment developments going up all over the city we take a look at what $200,000 USD can buy you in different areas.

Orizaba 36, Colonia Roma

97m2, 2 BR, 2 bath, 2 parkingspaces, 24-hour security + elevator, Balcony and 20m2 roof terrace

This apartment block is a modern building with a marble and glass lobby and 39 apartments. It is located just off the Plaza Rio de Janeiro in the heart of the Colonia Roma, close to shops, bars and restaurants.

Wooden walkways with plants, metal fencing and in-floor lighting run between apartments, and the building’s power is supplied by solar panels on the roof. The apartment has light-coloured wood laminate flooring throughout, with one wooden wall and one exposed concrete wall running the length of the entrance corridor. Its high ceilings give it a sense of light and space.

The bedrooms lead off the corridor to one side and the principal bedroom has its own bathroom. At the end of the corridor is the compact living area --a combined kitchen and sitting room-- with floor-to-ceiling windows and a small balcony.

Because of its location and small living space it would probably be best suited to a couple or single young professional. There is also a wooden roof terrace with its own bathroom, reached by a staircase from the corridor.

Moras 430, Colonia del Valle

91 m2, 2 BR, 2 bath, 2 parking spaces, 24-hour security + elevator, Communal gardens

When this large development is finished it will consist of three apartment blocks sharing communal gardens. It is located on a quiet residential street and the apartment we saw is aimed more towards young families.

It is slightly smaller than the Orizaba apartment, but has a more spacious communal living area that combines kitchen, sitting room and TV room in the same space. However, its lack of corridor and box-like dimensions make it less aesthetically trendy than the first apartment and the lower ceilings make it feel smaller.

This particular block consists of 40 apartments. The walls are whitewashed and the floor is a light-coloured wood laminate. The principal bedroom has its own bathroom and there is smaller “kids’’ room as well. The bathrooms are whitetiled and both have showers.

Av. Henríquez Ureña 540, Colonia Los Reyes Coyoacán

105 m2, 2 BR, 2 bath, 2 parking spaces. 24-hour security + elevator. 70m2 private terrace, and communal gardens.

This is the largest apartment of the group, but is located in the least attractive area. Although close to Coyoacán, the colonia itself is rather rough around the edges, characterized by factories and graffiti-covered buildings.

The apartment has a spacious living area that can easily be divided up into dining room, sitting room and study. Floor-to-ceiling French windows let in plenty of light and open out on to an extensive, private wooden terrace. The living area floor is laminated with a red-wood effect that gives warmth to the space.

The kitchen is separate from the living area and a corridor leads to the bedrooms. The principal bedroom has an en suite bathroom. The apartment is most likely suited to a family, with the extensive living space, terrace and communal garden ideal for kids, as well as entertaining.

The first tower of two towers in this development is scheduled to be completed in September.

Reader Response: How will swine flu affect Mexico´s Real Estate market?

aran — Mon, 04 May 2009 16:03:52 -0700

This is an unscientific survey of our reader´s thoughts on Mexico´s real estate market post-AH1N1.

Some are saying that it is only about the economy and swine flu will have no impact.

Others say that this scare has damaged Mexico´s image abroad and people will think twice before buying here.

What do you think?

Please comment below. (You need to register to comment.)

Thank you!

Insidemex.com

Creative corner

catherine — Sun, 03 May 2009 19:37:10 -0700

Adrian Aguirre is a graphic designer and photographer who owns a small design company called Pulpa Diseño that produces hand silk-screened collectible notebooks, posters, flyers and other products.

Inside México: How long have you lived in this apartment?

Adrián Aguirre: Three years. This apartment is small, but doesn't appear small and is a perfect photography and design studio. The ceilings are 5 meters high which helps when hanging a photo backdrop and for creating additional storage space. I found this place by walking the streets.

The building is about 150 years old. It appears in one of the original paintings in the Casa de los Azulejos [at 5 de Mayo and Madero, Centro].

IM: Tell us about all these movie posters on the wall.

AA: I have a huge collection of movie posters that were given to me by my grandpa, who had a movie theater in Coahuila. They are original posters from the 40s and 50s, the golden era of Mexican and foreign cinema. It's very inspiring as a designer to have such posters on the wall...I also have photos on the walls, simple things that visually enhance the space for me and make it livable.

The booming canal city

sue-ellen — Wed, 29 Apr 2009 17:30:52 -0700

“It’s like Miami, but cheaper, and more people speak English!” is often heard about Panama City. Coupled with Panama’s dollar economy, it’s no wonder that US retirees are a driving force behind a property boom.

Planned canal expansion and Panama’s aim to become a regional commercial and banking center are having a powerful impact on its property market. Economic growth was estimated at 9.2 percent for 2007, and more than 30,000 units, worth around $5.7 billion USD, came on the market last year.

“Property prices have doubled in the last two years, but are still a bargain… especially for Europeans with their strong currency,” says Steven Rich, a Canadian born in the former US Panama Canal Zone and marketing manager at Panama Offshore Legal Services.

The market has captured international interest: Donald Trump’s condo project, the Ocean Club Panama, is under construction, but there are more than high-rises. Panama City’s UNESCO-recognized historic quarter, the Casco Viejo, is seeing restoration and renovation of colonial buildings. Patrizia Pinzon, president of Arco Properties, specializing in real estate there, adds: “The bulk of our clients are North Americans, but we have also had French, Italian, German, and Dutch clients.” Luxury properties in the historic quarter typically go for $2,300 USD per square meter; condos in Trump’s development start at $356,000 USD.

Cherie Flagg, general director of the Metal Construction Technologies Company in Panama City, moved from the US with her family just over a year ago: “We like the Latin culture and lifestyle, and the Casco Viejo was a real draw for us too. [It] is a very interesting area to buy and live in, but...it is still a jewel in the rough.”

According to New World Real Estate, incentives for foreign buyers in Panama include no taxes on foreign-earned income; no property tax for retirees until a home is sold; and a twenty-year tax holiday on new homes. Simple residency laws help: retirees need only show a foreign pension providing at least $500 USD of monthly income, and also receive discounts on mortgage rates.

Closings in Panama can be handled remotely through powers of attorney and wire transfers, or locally with a notary and certified check. A reputable, Spanish-speaking attorney is always a must, and a licensed real estate professional is recommended.

Cosmopolitan Panama City’s tropical climate and proximity to beaches and mountains are attractive for those seeking to spend the winter months or relocate permanently, but snarled traffic remains a disadvantage and the city’s infrastructure is falling behind demand. Abject poverty also exists around the shiny new developments.

As ever, caveat emptor: in the past year some projects have been cancelled, and prices are being raised by speculation, some rumored to involve drug money. The bubble could burst if expected demand does not materialize, and latecomers to the market are likely to feel the sharp end of a correction.“Beware of buying…if you have to rely on the rental income to be able to afford it,” advises Flagg. “There are a lot of properties whose rents are climbing now, but very soon many buildings will be finished and the market will fall as there will be a flood of available apartments.

Real estate: San Miguel de Allende

sue-ellen — Wed, 29 Apr 2009 06:03:03 -0700

INSIDE MÉXICO: What percentage of your clients are Americans? Canadians?

SHARON DES JARDINS: 60% Americans; 30% Canadians.

IM: Are they buying second homes, or a primary place of residence?

SDJ: Both. Many are buying a second home and will live here full-time when they retire. The rental market is very good in San Miguel, so those who rent out their homes when they aren’t here make a good return on their investment.

IM: What price range are they looking in?

SDJ: From $200,000 USD to one million plus.

IM: What kind of amenities are they requesting?

SDJ: Outdoor space, walking distance to the center of town, and a view of town. Some want a pool.

IM: What draws your clients to San Miguel de Allende? What distinguishes the area from other retirement communities in Mexico and the US?

SDJ: The climate and the [big expat] community draw clients to SMA. There is also a lot of culture and social events, as well as the beauty of the town. It’s very easy to meet people and make new friends. Many of the clients who move here become involved in non-profi t agencies such as Feed the Hungry, Pro Niños, and Amigos de Animales. They enjoy living here and want to give back to the community.

IM: Do your clients feel like they’re moving to a foreign country? Or is there a strong English-speaking presence that makes them feel more “at home”?

SDJ: No, they don’t really feel like they are moving to a foreign county due to the expat community.

IM: Is access to medical care a consideration in their decision to move to San Miguel de Allende? If so, how?

SDJ: There is good medical care as well as assisted living communities. The cost of medical care is very affordable and there is an excellent hospital just 45 minutes from San Miguel. There are good doctors in San Miguel as well. However, that doesn’t seem to be a big consideration for clients deciding to move to San Miguel.

IM: What other major lifestyle considerations do your clients take into account when purchasing in San Miguel de Allende?

SDJ: The cost of living, including having a full-time housekeeper and cook. The idea of indoor/outdoor living. Art classes, sculpture classes, language classes, cultural events.

IM: Has the San Miguel de Allende market been affected by the real estate turmoil in the US? If so, how, and what should be done to reverse this?

SDJ: Yes, towards the end of 2007, sales were down. However, our business has picked up considerably since the month of February.

IM: What is your 2008 forecast for home prices in San Miguel de Allende and in Mexico in general?

SDJ: I believe prices will stay the same for 2008. Some properties that have been overpriced are starting to come down.

IM: Is there any particular area in San Miguel de Allende that you think represents a “bargain” for buyers from the US looking to buy there?

SDJ: Los Frailes, Independencia, and Vista Antigua.

IM: Why San Miguel de Allende over US communities like Santa Fe, New Mexico?

SDJ: In terms of cost of living, San Miguel is more affordable than Santa Fe. It is also steeped in culture and history, which is one of the reasons people come here. The weather is also wonderful year-round. It’s a very safe place to live, even for single women. Parents can let their children go out alone without worrying about them.

Sharon Des Jardins is the broker/owner of Mexico Luxury Homes in San Miguel de Allende. The company’s website is: www.mexicoluxuryhomes.com.

Shooting for the top of the market

sue-ellen — Tue, 28 Apr 2009 23:16:28 -0700

Henri Giscard d’Estaing is the CEO of Club Méditerranée, the all-inclusive resort company better known as Club Med. Once a favored hot spot of singles around the globe, Club Med has repositioned itself as an upscale vacation option for couples and families, a strategy it hopes will prove successful in today’s highly competitive tourism industry.

We spoke with Mr. Giscard d’Estaing in the Club Med offices on Avenida Masaryk in Mexico City, where he had just arrived from launching the company’s latest resort in Ixtapa, on Mexico’s Pacific coast.

INSIDE MÉXICO: Could you tell us about Club Med’s history?

HENRI GISCARD D’ESTAING: Club Med was founded in the 1950s as a non-profit camp in Mallorca with the motto “Happiness through sports and nature.” …The concept was to offer all-inclusive vacations on the Mediterranean, the most wonderful sea, the origin of European civilization. As the company grew internationally, it became something of a symbol… The advertising slogan was “The Antidote for Civilization”, and the Club became identified with… freedom and sexual liberation.

IM: The tourist industry has changed dramatically since the founding of Club Med. How has Club Med fared in a more competitive industry?

HGE: We were the first to offer the all-inclusive concept, and since then, we have been copied over and over. When you are copied and you don’t move sufficiently fast, you get into a difficult position, and that’s what happened to us. And, like the rest of the industry, we were also hit hard by the attacks of September 11th. Americans didn’t travel for a while after that. We started to evaluate our resorts. We were offering everything from basic services to very upscale… but the reality of the market today is you either have to be the best or the cheapest, but not the middle. So what we decided was to be the best. We have eighty-two resorts worldwide in the best places. In Cancún, we have the best beach. We have the best spot in Ixtapa. More than three years ago, we decided to upgrade. We spent €1 billion euros [$1.46 billion US dollars] to renovate seventy resorts; we opened twenty new ones, and we closed sixty-five. We spent €25 million euros [$36 million USD] in Cancún and Ixtapa to bring them up to the very best worldwide standards.

IM: Who are Club Med’s core customers today?

HGE: In the old days, we had two targets: singles and families. Now, our clients are primarily couples and families. Our staff is happy to look after children; if the children don’t have a good time, the parents won’t. In 2006 two-thirds [of the clientele at our Cancún village] were families.

IM: What is the mix of international versus Mexican clients in the Club Med resorts in Cancún and Ixtapa?

HGE: Right now, the guests are mostly international, but our objective is to attract [more] Mexican clientele. Club Med is an ideal format for Mexican families.

IM: Does Club Med plan to get into the booming Mexican market for second or vacation homes, condos, or time shares?

HGE: In our Mauritius resort, we are taking a slightly different approach to that business. This is a super luxury resort; we are investing more than $70 million USD. There will be forty villas sold… each person will have use of their villa for six weeks of the year, [with] all the Club Med amenities included. The rest of the year, they rent their villa to Club Med. We think this will be very attractive for both the North American and European markets.

IM: What is Club Med’s commitment to the environment?

HGE: Respect for the environment is in our roots. First of all, we have never and will never build high-density places. We are the only green spot in Cancún! In Ixtapa, the only low-rise hotel is Club Med. Secondly, we are implementing ways to lower our environmental impact. In Mauritius, we’re experimenting with filtering gardens [to remove impurities from gray water], rather than mechanical systems.

IM: What are Club Med’s annual revenues?

HGE: Our revenues are €1.7 billion euros. We service 1.3 million guests worldwide per year. We are not the biggest tourism company, and we do not want to be… Our mission is to be the worldwide leader in all-inclusive, upscale, friendly, multicultural holidays. We estimate that there are 60 million potential customers worldwide for this strategy. We are establishing our position, and will spend the rest of 2008 upgrading the villages. Then we will open five new resorts before the end of 2009.

IM: What are the factors that make Club Med different from the competition?

HGE: First, we are a real all-inclusive vacation, no hidden costs. All activities are included in your price. Next, [our staff] are professionally trained to help you make the most of your vacation. Finally, we are the best place for families, and we are concerned with the happiness of all the family members on their vacation.

IM: Your father, Valery Giscard d’Estaing, was a very infl uential President of France. Do you see politics in your future?

HGE: I have already been a politician. I was the country’s youngest elected official, at age 22. My brother currently serves in the French parliament. But this is my work. I really enjoy my job. Happiness is our business, and that’s quite motivating.

Real estate: Puerto Escondido

sue-ellen — Sun, 26 Apr 2009 20:10:10 -0700

INSIDE MÉXICO: Who are your clients and what are they buying?

VICKI COLE: The majority of our clients are Americans, then Mexicans, Europeans, Canadians, and others, in that order. Most purchase second homes or property with the intention of building after retirement.

IM: What price range is available?

VC: Lots range from $35,000 USD to $200,000 USD and homes range from $110,000 USD to $500,000 USD.

IM: What kind of amenities are they requesting: pool, gated property, ocean view?

VC: Most of our clients would love oceanfront but will settle for ocean view, walking distance to a beach, proximity to the actual town of Puerto Escondido, and perhaps a pool on property. They don’t seem to be interested in gated properties: most of our clients want to live within a regular Mexican community.

IM: What draws your clients to Puerto Escondido?

VC: Puerto Escondido has a mystique that’s hard to explain. Like a diamond in the rough, it still needs a lot of polishing, but the generous people, spectacular scenery, mountains, major waves, and the laid-back way of life make it special. It’s not for everyone, but draws a unique type of individual who can just relax and hang. It was first “discovered” by surfers who came here in the early sixties for its world class waves, and the community of foreigners slowly grew by word of mouth. The area doesn’t offer the amenities of planned resorts like Huatulco, Cancún, and Cozumel, but that’s what makes Puerto so special.

IM: Is there a strong English-speaking presence that makes your clients feel “at home”?

VC: Our clients definitely feel like they’re moving to a foreign country, and one does need to learn some Spanish to function here. There is not a strong English-speaking presence, but enough for a newcomer to feel comfortable.

IM: Is access to medical care a consideration for your clients?

VC: Most of our clients are younger -- late thirties to early forties -- and in relatively good health. Clients should consider that there is no hospital here. Puerto has only basic clinics, so air evacuation is necessary for serious medical emergencies.

IM: What other considerations should buyers take into account?

VC: Because it is still a relatively young town, we don’t have conveniences like malls, movie theaters, or boutiques, and phone and Internet service is lacking. If you need to do serious shopping, you have to drive six hours to Acapulco. Also, things happen slowly here and you need a lot of patience.

IM: What is your forecast for home prices in Puerto Escondido?

VC: We’ve been in business for six years, and prices rise every year. More and more people are discovering Puerto and purchasing property: I think word is getting out and we’re at the edge of a big real estate explosion. We’re just seeing the beginning.

IM: Is there any particular area in Puerto Escondido that you think represents a “bargain” for buyers from the US?

VC: Compared to prices in other beach resort areas of Mexico, everything in Puerto looks like a bargain.

VISTA EL FARO SUITES

$490,000 USD. 200 m2 of construction on a 600 m2 oceanfront lot - spectacular views of Marinero and Zicatela Bays. Private parking, fully furnished, jacuzzi, lap pool. The property includes two one-bedroom apts., one two-bedroom apt., and separate maid’s quarters or additional small one-bedroom unit.bargain!

CASA MANZANITA
$85,000 USD. The entire property includes two one-bedroom furnished apartments, and a third floor rooftop deck with good ocean view. Older neighborhood, ten minute walk to beach.

Vicki Cole and Richard Courtney are co-owners of ZICATELA PROPERTIES, 954-582-2495 or 954-582-1673, www.zicatelaproperties.com, zicatela_properties@yahoo.com.

Astrid Hadad: performer

sue-ellen — Sun, 26 Apr 2009 20:02:43 -0700

Astrid Hadad’s Roma Norte home in Mexico City is like an overflowing dress-up chest. “I’m baroque in my work, and in my house,” says the cabaret star, waving a dancer’s hand at the bright walls, cluttered floor-to-ceiling with her collections. Hammered-tin hearts from all over Mexico fill an orange wall, and papier-mâché puppets from a past show hang above a window. Woven cows and crocodiles from Chiapas dangle above the stove in the kitchen, joining racks of carved wooden spoons, stacks of baskets, and hand-painted cabinets. Other rooms are home to grinning ceramic dolls and colorful dioramas of traditional rural scenes, and in one, paintings lean three-deep against the walls. A crown and wand, resting on a spangled pillow near an enormous mirrored crystal ball, complete the sense of being backstage before an elaborate show.

“It’s mostly all gifts, from friends and from designers of my costumes. I tell them it’s enough, but they keep bringing things!”

The problem comes with Hadad’s popularity. The dueña of this three story haven on Calle Córdoba—part of a grand, Art Nouveau town house with a baby blue facade and a great curlicued wrought-iron gate—has earned international fame for her alternative cabaret. Her reinterpretations of classical Mexican ranchera and bolero songs celebrate the tradition while poking fun at the macho language. Mixing song, dance, theater, and art, the show gently teases what Hadad calls Mexico’s “great appetite for kitsch,” and employs sharp irony to take on national myths.

Perhaps it’s her verve more than her voice that’s made her name, admits José Mario, program director at La Bodega in Colonia Condesa, where Hadad has packed houses for over a decade. Crowds also come for her far-out outfits, stitched references to Mexican iconography: Tequila, pyramids, cempazúchil flowers, Frida, Lucha Reyes, and the Virgin of Guadalupe have all featured in her costumes.

INSIDE MÉXICO: Is your home another theater set?

ASTRID HADAD: More than another set, it’s a pleasure. Here I can create my own worlds, and give a rest to my head, which never stops! I’ve often had ideas for my next production while moving things from here to there or rearranging a certain corner. It’s my meditation.

IM: Do you ever long for a bare, minimalist room?

AH: I stay in hotels all the time on my travels, and they’re all bare and empty. I love to arrive back to this place so full of life, and of love. These are gifts from all over Mexico, from all over the world. So it’s about friendship.

IM: Is this a social place, or your private sanctuary?

AH: People are always coming by. I love to cook, and my friends tend to gather in my kitchen (or “kitsch-en” as she jokes). How many people would you say fit around this table, five? We’ve had more than ten, many times! I try to keep them in the sitting room, but they end up in here. The kitchen is the warmest part of the house.

Especially this one: Hadad believes electric heaters are bad for her voice, so in winter leaves the rest of the house cold. “I cart in my computer and all my piles of books and photos to the kitchen, and work in here.”

As the tour continues, I begin to understand that these brimming rooms are as much an anthropologist’s archive as a personal collection: each artifact has a social history. Hadad shows a ceramic sculpture from Ocotlán de Morelos, explaining the tradition of the craft. A wall of ornamental hearts is presented as an important symbol in both Catholicism and pre-Columbian religions. “It’s a very syncretic icon … Plus, there’s a saying: in Mexico, the only value that never falls is love.”

As for Mexico’s “great appetite for kitsch”, Hadad glances at metallic campesino dolls dancing on a shelf near a swooning saint in a bulb-bright shrine: “Of course my point of view is a bit critical, but it’s also loving.”

Permaculture in Playa Viva

catherine — Wed, 22 Apr 2009 12:03:01 -0700

This article accompanies the story Walking a greener path: Challenges and advantages of building and developing green.

One of the key aspects of sustainable living as practiced at Playa Viva, a coastal development in the state of Guerrero, is the concept of permaculture, the practice of examining all aspects of an ecosystem and applying long-term solutions to its improvement. The project's Permaculture Developer Odin Ruz defines it as a "system to organize knowledge in order to apply it, taking into account all the elements that make a sustainable development." Builders should not only try to affect the surrounding environment as little as possible, but should actively try to improve it by regenerating natural systems.

Ruz grew up in the Huehuecoyotl community at Tepoztlan, Morelos, established in 1982 by a group of modern-day nomads (that included his parents) who had spent fourteen years travelling and learning about communal and sustainable living. Settling in Tepoztlan, they were able to put into practice all they had learned from Kibbutzim in Israel, ashrams in India, and communities all over Europe and the US. Today Huehuecoyotl also serves as a school, fomenting sustainable living throughout Mexico. Ruz calls it "a nest for movement, thinking, teaching, and spreading the word."

An important tenet of permaculture is observation. Before the first earth was turned at Playa Viva, Ruz spent a year studying the site to see how it changed through the seasons. Many developers, he says, make basic errors like building in floodplains or areas that are susceptible to wildfire. By observing the different ecosystems in the area--humid estuary lands, dry deciduous forest, and sand dunes--he was able to make recommendations that enabled Playa Viva to have as low an impact as possible.

One example Ruz gives was the site of a proposed greenhouse: he noticed one day that thousands of small crabs had emerged from the soil there, and the greenhouse was duly relocated to avoid both damaging this habitat and exposing the nursery plants to the depredations of the crustaceans.

Permaculture's holistic approach is especially critical for Playa Viva due to their location at the mouth of an estuary: everything that takes place upstream has an effect on them. Playa Viva has taught its neighbors sustainable agriculture: Ruz found many locals receptive to organic farming, natural pesticides, and moving away from monoculture.

As they put these methods into practice and found that their costs were lower and the prices they received for organic produce higher, interest spread throughout the community.

As Ruz puts it, "if you want your system to be strong... you have to empower people around you."

For more information on Playa Viva and permaculture, visit playaviva.com and permaculture.org.

Loreto Bay: The sustainable golf course conundrum

catherine — Wed, 22 Apr 2009 11:17:42 -0700

With over 150 courses nationwide, and more being planned and built by the world's top course designers, it's no surprise that Mexico is the second-most popular golfing destination for Americans (right behind Hawaii). For retirement and resort communities and towns with big expat populations, eighteen holes designed by Jack Nicklaus or Tom Weiskopf seem to be a requisite detail: even artsy San Miguel de Allende has a nine-hole course.

The problem, of course, is that golf courses may look green, but have a justly deserved reputation for ecological devastation. Swaths of natural habitat get bulldozed. Manicured fairways and greens are treated with tons of pesticides and fertilizer and are watered constantly to maintain their lush, verdant appearances, even in desert environments like the Baja peninsula.

The Loreto Bay development inherited this dilemma from FONATUR's abortive attempt to develop the area in the late 1970s. Sustainability Director Peter Clark was ambivalent about the idea of including a golf course in a project billing itself as "green", but given that there was already one on site, not to mention the need to attract golfer-buyers from North America, he decided to make the best of it.

His first step was to pull up and compost the existing Bermuda grass, a water-intensive species, and replace it with lower-maintenance and salt-resistant Paspalum. This change enabled the installation of a recycled waste-water irrigation system, which the Bermuda grass couldn't handle: Clark boasts that not a single drop of potable water is used to water the course.

The combination of a new grass type and a move to hand-weeding of the course allowed Loreto Bay to eliminate the use of herbicides and fertilizers, and a program to construct houses to attract bats and insect-eating birds is aimed at ending the need for insecticides. The course was also re-landscaped to include riparian and wildlife corridors, and planted with sequentially-flowering plants to maintain its aesthetic appeal year-round.

Clark's vision is for the course to double as a nature education site, with signs describing the various species of plants and trees and explaining their roles in the pre-existing ecosystem. His efforts have paid off; the course has been certified by Audubon International as having "minimal environmental impact."

The Loreto Bay development's website is: loretobay.com.

Walking a greener path

catherine — Tue, 21 Apr 2009 16:50:46 -0700

At a place called Playa Viva near Juluchuca, Guerrero, about thirty minutes south of Ixtapa-Zihuatanejo International Airport, a new resort has opened that takes sustainable development seriously.

The Playa Viva project is the brainchild of husband and wife team David Leventhal and Sandra Kahn, who purchased eighty hectares of land, including a 1.2 kilometer beach, and began planning a resort community with a different business model.

They were inspired by a talk given by Bill Reed of the Regenesis Group, a Santa Fe, New Mexico-based consultancy that specializes in "Regenerative Development." According to Leventhal, "Building green is doing less damage; building sustainable is net neutral, building in a regenerative manner is making [your environment] better."

This philosophy has prompted Playa Viva to work to revive coastal forests and wetlands on their property; preserve and restore a nearby archeological site along with INAH (Mexico's national anthropology and history institute); and work with the local community to try to spread sustainable practices (see Permaculture sidebar).

An early challenge Leventhal and Kahn faced was how to build on beaches and dunes without destroying the subterranean plants that hold the sand in place and prevent catastrophic erosion. Together with master designer Ayrie Cunliffe, they settled on a solution that is at once radical and simple: mature living palms were transplanted into position on the beach to serve as structural anchors, and the development's casita residences were built treehouse-style among them. The trees' root system shores up the sand against erosion, and as a building material they are entirely renewable.

Treehouse expert Michael Garnier of Oregon was brought in to help with the design of the units-floors are a few feet above ground level, and the structures have been successfully tested to support nearly five tons of weight, more than enough for even the large three-bedroom units. The palapa-style cabins are well ventilated by ocean breezes, eliminating the need for air conditioning.

But don't get the wrong impression: these aren't rustic accommodations for backpackers looking to hang out on the cheap. Playa Viva is riding out real estate troubles in the US by focusing its marketing on hotel guests instead of fractional buyers, and is fully booked. Even in the heat of summer, guests are lining up to pay $285 USD per night for the luxury casitas.

It turns out that building green can be smart business.

The Famous Baby Boomers

In popular retirement destinations like Los Cabos, Baja California Sur; Ajijic, Jalisco; and San Miguel de Allende, Guanajuato, an influx of Baby Boomers in recent years has radically altered the communities, often for the better. Many Boomers choose Mexico because the cost of living is significantly lower than in the US or Canada, but nonetheless they inject lots of money into the local economy. Many of these newcomers also participate in volunteer projects that improve the community for all residents, locals and expats alike.

However, the arrival of North American Boomers is threatening Mexico´s environment. A common way of measuring an individual's impact on the planet is the "ecological footprint," a calculation of the resources needed to produce the goods consumed by one person, and to absorb that person's waste. According to the Global Footprint Network, the average Mexican uses 2.6 hectares, while Canadians and Americans need 7.6 and 9.6 hectares respectively to sustain their lifestyles.

Boomers heading south often seek all the comforts of home in their new surroundings: air conditioning, swimming pools, two-car garages, and golf courses. Development catering to norteamericanos is having major environmental impact everywhere from Baja to the Yucatan, and as the number of Americans and Canadians moving to Mexico rises, there is a real threat to many of the ecosystems and unspoiled landscapes that help make Mexico so attractive to begin with.

Fortunately, the Boomer generation is by and large conscious of these issues: a survey conducted in the US in December 2007 for the AARP revealed that 70 percent "feel a sense of responsibility to make the world a better place."

This responsibility manifests itself in many ways: driving more efficient cars, seeking out locally-produced goods, and buying organic food. For most people, though, the most important purchase they make is their home, whether primary residence or winter getaway.

Scale and Context

Developers, builders, and environmental systems experts working on sustainable projects all agree that sustainability can't be achieved by simply opening your checkbook. In order to make a real commitment to reducing one's footprint on the planet and in the immediate environment, it is necessary to make fundamental changes to one's lifestyle.

Affluent North Americans have become accustomed to living in very large homes-the average size of a single family home jumped from 1,500 square feet in 1970 to nearly 2,300 square feet in 2000. With this increase comes a greater draw on resources, as more materials are used in construction; more energy is needed to heat and cool the larger interior space; and the sprawl initiated by the construction of large homes leads to greater reliance on automobiles for transportation.

Ecological systems designer Art Ludwig of Oasis Designs in Santa Barbara (oasisdesign.net), California, has done extensive consulting for the Pomara Indian village of Maruata on the Michoacan Coast and the Huehuecoyotl Eco Village near Tepoztlán, Morelos. He says that "a 2,000 square foot house with completely conventional construction would have a lower ecological impact than a 4,000 square foot straw bale house that employed every ecological feature."

It's not just size that matters: a key aspect of building a sustainable home is siting and orientation. Bioclimatic design, as this concept is known, relies on good design rather than expensive and complex technological solutions to create a comfortable home with less impact on the environment.

As architect Michel Lewis puts it, "Without an intelligent design that understands the site, the climate, the materials... and the local culture, nothing can be properly attained." Working in Mexico since 1985, he designs homes that take advantage of the sun's winter path, creating passive solar heating without the need for expensive solar panels, and reducing the amount of artificial lighting required. Summertime cooling is accomplished through natural shading, and ventilation in ceilings or rooftop cupolas that draw out hot air as it rises.

Natural building materials like adobe, rammed earth, or cob-a mix of mud, sand, and straw in use in parts of Britain for millennia-are breathable, insulating, and weatherproof, keeping homes cool in summertime and warm in the winter. They have the further advantage of being locally available, renewable, and free from the potentially harmful chemicals present in many artificial building materials.

A key benefit of this approach to sustainable design is that it helps to keep costs down. While it is still something to consider for your existing home, adding green technology after the fact, especially solar power, represents a large up-front investment in specialized equipment that may need to be imported from the United States. Simply designing and building a home (or hotel) to take advantage of the site and climate need not cost a premium, and should lead to savings in the long run.

This approach also permits architects and owners to employ local labor: in many cases more traditional building methods are used, and even a relatively complex water system, such as one Ludwig designed for a home near Tepoztlán, Morelos, uses mostly conventional plumbing materials (see "Learning to live green"). While local contractors may have the ability to work on sustainable projects, it will often be unfamiliar territory. As Michel Lewis says, "Directions or guidance from an architect or anybody who understands the whole process is necessary, as detail is the most important issue when building green."

A Sustainable Retirement Town

For many North Americans who are looking for their place in the sun, buying into a retirement or resort development is the simplest way to go. Increasingly, builders are looking to attract buyers who want to enjoy all the diversions and beauty Mexico has to offer, but also want to know that they are not hurting the environment.

Fulfilling both demands represents a challenge for developers: they need to offer the amenities that buyers have come to expect, while also demonstrating their commitment to the surrounding ecosystem. Due to the larger scale of these projects, however, they have an opportunity to make a big impact-by making a smaller one.

The Loreto Bay development, located in Baja California Sur on the Sea of Cortés, has taken the small footprint ideal to heart. Sustainability Director Peter Clark explains that "New Urbanism" planning principles were employed to minimize the overall footprint of the projected 6000-home development. Increased housing density reduces sprawl and creates a more livable, pedestrian-friendly community with surrounding green space. In fact, homes at Loreto Bay are not accessible by car at all: drivers park along the main paseo and continue home by bicycle, electric cart, or on foot through the narrow streets separating the complexes.

Homes are built in the classic colonial style, which for centuries offered inhabitants the benefits of natural cooling. Many of the houses feature ventilated cupolas which allow hot air to escape and be replaced with air cooled by the shade of the interior courtyards.

The homes themselves have small footprints: the largest floorplans (selling for over $900,000 USD) are about 3,100 square feet, 700 of which are open courtyard. The smallest (at over $300,000 USD) are just 796 square feet, and the average for the development is 1,600.

The first 400 homes were built using rammed earth, which is renewable, locally available, non-toxic, and offers excellent insulation. Subsequent construction has been with inflated form concrete, filled with 100 percent post-consumer recycled styrofoam from a Sony factory in Mexicali. Peter Clark explained that this switch reduced the need for migrant laborers from other parts of Mexico who were having a negative impact on the local community: "Sustainability isn't just about the environment, you have to have social and economic sustainability too."

The Loreto Bay development's scale means that they are able to extend their vision of sustainability beyond the buildings themselves and undertake projects outside the scope of what is possible for individual homeowners. Chief among these is the restoration of the local estuary system, which was filled in by FONATUR in the 1970s during an effort to develop the area into the new Cancún. Nurseries at Loreto Bay cultivate mangroves used to replant the area. Attempts are being made to restore ground cover throughout the 8,000-acre property (5,000 of which are reserved as green space), which will slow rain runoff and help to recharge the local aquifer, providing both the new development and its neighbors with an improved supply of drinking water.

Eventually, the Loreto Bay development will be powered by a twenty megawatt wind farm, to be built on land leased from the local ejido. The installation expense means that power will initially be costlier than electricity sourced from the local grid, which is primarily generated by diesel plants. Clark explains that in the long run, with diesel prices expected to keep rising, wind-generated power will become the less expensive option, and power will also be sold to the community at cost.

Not only does the Loreto Bay development exhibit a commitment to environmental standards, adhering to many-although not all-of the US Green Building Council's certification standards, they are encouraging other developments to follow suit. As a founding member of the Mexican Green Building Council, they have participated in that body's efforts to introduce a set of standards similar to those set by the USGBC, and they are also working with the state of Baja California Sur to develop guidelines for coastal development there. As Peter Clark puts it, "we want to replicate ourselves."

Getting Started

Building or buying a sustainable home in Mexico requires first and foremost a commitment to doing things differently--and better. Just as important, however, is finding the expertise to help. Architect Michel Lewis cautions that "there are a lot of professionals interested but also a lot of bad information available, lots of books and publications offering bad solutions. It is important to check the experience of the people you hire and see how their buildings are working."

One resource to start with is the Mexico Green Building Council. This organization, a founding member of the World Green Building Council, offers a list of members including developers, architects, and suppliers, and also hosts workshops around Mexico covering various aspects of sustainable building. The Council is also developing a voluntary rating system, SICES, which builders can employ to demonstrate compliance with standards of sustainability.

The US Green Building Council already has a set of standards in place, called LEED (Leadership in Energy and Environmental Design), which has in itself become the standard in this field, and is beginning to be followed by builders in Mexico. So far only one structure in the country has received LEED Gold certification, the HSBC tower at 347 Paseo de La Reforma in Mexico City.

When it comes to buying into a resort or retirement community, it's important to take a close look at what's on offer: developers know that green is the current "in" color. Michel Lewis believes "the simple fact that a lot of developments are billing themselves as ecologic shows the increased interest in going in the right direction, but unfortunately most of them are fake or give a very short step forward."

Buyers should do their research and ask for copies of a development's sustainability plan, such as the ones drawn up by Peter Clark at Loreto Bay and David Leventhal at Playa Viva.

Mexican Government Encourages Sustainable Homebuilding

It's not just homebuilders and developers who are looking at sustainable development. The Mexican government, as part of a broad effort to both reduce carbon emissions and conserve increasingly scarce resources, has launched a green mortgage program (Hipotecas Verdes) through the Instituto del Fondo Nacional para la Vivienda de los Trabajadores (Infonavit).

A pilot project in several states in late 2007 demonstrated the viability of the program, and as of March 2008 it has been available to qualified homebuyers throughout Mexico. Expats from the US and Canada may qualify if they are employed in Mexico by a Mexican company, and can check their eligibility at the institute's website.

Developers can register with Infonavit, indicating which technologies-everything from compact fluorescent lightbulbs to solar hot water heaters-have been incorporated in the homes they are offering. Infonavit offers additional credit to homebuyers, up to $16,000 pesos, based on the recognition that these technologies reduce the consumption of energy and water. This results in lower monthly utility bills, allowing the buyer to pay off the higher loan amount over the life of the mortgage.

For now this incentive is only available to buyers of approved new-construction homes, but Infonavit plans to expand the program to cover those homeowners who wish to retrofit existing houses or build a home on their own property. The eventual goal is to issue 800,000 of these green mortgages as part of the Calderón administration's National Climate Change Strategy.

We have all been drawn to Mexico for different reasons: the food, the culture, the people, but the natural environment plays a key role in how we all enjoy the country. Whether you are a chilango longing for cleaner air, the proprietor of beachfront property on the Mayan Riviera anxious about hurricanes, or a transplanted bajacaliforniano wondering when the meagre seasonal rains will start, the climate plays a major role in our day-to-day lives. But we can make a difference, and when it comes to mitigating the effects our lifestyles have on the environment, there's no place to start like home.

Writer Veronica French contributed to this report.

Jonathan Jucker is an editor and freelance writer based in Tucson, Arizona.

Download Inside México Real Estate: Greener by the square meter

catherine — Tue, 21 Apr 2009 15:56:20 -0700

Miniature vegetables snuggled in a protective bubble of plastic packaging, sealed with that white and green "organic" label, are on the shelves at Superama grocery stores; bamboo-fiber bed linens are available in this season's hottest colors in Mexico's swankiest boutiques.

It's taken some time, but the green boom is trickling down to Mexico.

As public awareness of climate change, pollution, and dwindling natural resources grows, the world's biggest companies-- and a new crop of smaller ones-are determined to direct this newfound green consumer consciousness toward their ever-growing selection of products.

The result can be dizzying.

Instead of feeling empowered as consumers, we are often left feeling more confused. If we vote with our wallets, are we expressing our values or getting duped by a new fad and savvy marketing?

Now take the conundrum a step further, to the biggest purchase most of us ever make: our homes. Suddenly the stakes get higher, both in terms of environmental impact and monetary value.

Our most direct chance to make positive change is in our immediate environment. But despite our best intentions, home purchases usually tug at the heartstrings, not the moral compass. Environmental considerations get drowned out by the lure of extra square footage and panoramic views.

Finding or building a green home in Mexico can be even more daunting. Organic textiles might be all the rage, but there is currently only one building in the entire country that is LEED certified (the gold standard for green construction). Green building might be gaining momentum, but it is hardly widespread and still very much in the domain of innovators.

In this issue of Inside México Real Estate, we've asked writer and editor Jonathan Jucker to sort through the details of buying and building green in Mexico. Hopefully you'll find that living green doesn't mean forfeiting the comforts of modern life and taking off to the woods (though if the thought of living in a treehouse has always enticed you, you'll love our main article). Most of all, we hope that after reading it you will feel empowered to make informed decisions that reflect your values, even if you might not have all the answers.

Also in this issue, you'll find the same great practical information you've come to expect from Inside México. We believe that by demystifying real estate transactions, we can give our readers the confidence of knowledge. Don't miss Pedro Perichart's explanation on how the US escrow process is being implemented in
Mexico. And Carlos Alatorre shares tips on how to ensure your appraisal value is as accurate as possible.

Finally, it's input from readers like you that drives this publication. We'd like to hear what kind of information you'd like more of, as well as your opinion on the articles in this issue. Drop us a line at realestate@insidemex.com.

It can be easy being green!

Download the Inside México Real Estate Summer 2008 edition!

Tip sheet: Building your dream home in Mexico

catherine — Tue, 21 Apr 2009 08:01:21 -0700

See the full story, Building your dream home in Mexico, on how Jamie and Mariana Rosen customized their house from start to finish.

How much will it cost to build your dream home in Mexico?

First, decide how big it will be, and what level of finishings you envision. To translate your budget to Mexico, estimate how much it would cost to build the same house in the US and then halve that number. This is because materials on average cost about the same as in the US, but labor can be 75% less.

In the US, construction budgets are typically two-thirds labor and one-third materials; in Mexico, it's the other way around. Once you've come up with a number, add a 25-50% cushion for contingencies. Especially in Mexico, you'll need it.

Before you drive around with brokers...

Figure out how much you can spend on land. Take your estimate of construction costs, add closing costs (which are higher than in the US), furnishings, and travel and lodging while you're overseeing the project. Subtract all that from your total budget and what's left is what you can comfortably spend on land.

Land-shopping checklist:

- View

- Orientation to the sun

- Zoning restrictions (ask about the certificate of occupancy)

- The possibility of someone blocking your view

- Noise and traffic patterns at different times of the day/week/year

- Services like water, sewage, and power

- Climate and the need for heating and/or air-conditioning

- Potential title issues

Before you start working with an architect...

Think about how you will use your new home. Will you use it to entertain? To work? Do you want "marketable" features so that you can more easily rent it when you're not there, and eventually sell it, or do you want something personal and unique? Is it important to you to be eco- or child-friendly? Write it down so you can clearly communicate your priorities to your architect.

Have your contractor lock up materials ahead of time.

You don't want to be a commodity speculator while building your house, especially in a highly volatile commodities market. We locked in prices by negotiating a bulk purchase up front for all the steel, cement, and lumber that we needed. We had to tie up some capital with down payments but we saved thousands of dollars when the price of steel spiked 100% during the course of our project.

You can also hedge against exchange rate fluctuations.

A simple way is to keep some of your budget in pesos and some in dollars. We kept one third in pesos to correspond to the labor component of the project, and two thirds in dollars to correspond to materials. Our rationale was that wages—approximately a third of our construction budget—are paid in pesos and don’t change if the peso goes up or down a bit. Materials costs, however, can respond quickly to exchange rate fluctuations. If you keep all your construction funds in pesos and the peso falls, you will end up paying more for anything on the global market, from PVC to marble. On the other hand, if you keep everything in dollars and the peso goes up (which it did during our project—about 5%), your payroll costs will increase.

Building your dream home in Mexico

catherine — Tue, 21 Apr 2009 07:33:56 -0700

Ever consider having a cave in your house for your wine collection? How about a fire pole to go from your bedroom to your dining room?, Perhaps an office in a treehouse? If you have eccentric tastes--or if you just want something different for your house, like an extra large chef's kitchen or an isolated bedroom for your mother-in-law--you may want to design and build one yourself. Although you might entertain building a house from scratch back home, tackling a project like this in Mexico may seem daunting.

For me, the build versus buy decision was settled the day I married a Mexican architect. But you don't need an architect in the family. If you have a clear idea of what you want and are willing to roll up your sleeves and find yourself a good architect and builder, you can turn your dream into your dream home. We did--and it ended up being a lot of fun.

Here are some tips from the two years my wife and I spent building our home in Mexico.

I. Finding the land

Where should you buy? Mexico has 5800 miles of coastline and lots of charming towns. If you're not already sure where you want to build, consider convenience. You may find a beautiful spot on a remote beach, but if getting there involves changing planes and a long drive, you may find yourself using your new house less than you think, especially if it's a vacation home.

Major airlines have been adding new routes and flights to Mexico, so if you're looking for a good deal, explore areas that are receiving more international flights. Not only will more flights make getting there easier and cheaper over time, it's also a good sign for rising property values and your ability to rent your house when you're not using it.

Once you find a piece of land that you like, check out the area at different times of day and on different days of the week (in Valle de Bravo, where we built our house, it's usually deserted during the week and packed on weekends). Inquire about the weather: is there a rainy season? Does it ever get hot and humid? Will you need to put in heat or air-conditioning? Valle de Bravo's mild climate is economical, and most people get by with neither--in our house, we have just fans and fireplaces.

Get a feel for the vibe, both for locals and expats. How are the schools, parks, restaurants, and supermarkets? Don't forget the hospital--where would you go if you had a medical emergency? We didn't find this out until later but Valle de Bravo doesn't even have a modern ambulance (a group of residents are pooling money to buy one now).

Consider environmental hazards. Is the land in a seismic zone? Is it vulnerable to storms? What will happen if sea levels rise? Unfortunately, Mexico has its share of earthquakes, hurricanes, and flooding. Don't be put off by problems. Problems are good--at least fixable ones. They scare off other buyers and bring down the price. And in solving problems you create value. In our case, the land had been used for years as an unofficial garbage dump and had mountains of trash. The land was also 15 feet below the level of the road on a steep hillside, making it a challenge to build on. But raw land almost always needs work. This is where you get to squint and imagine the possibilities that other people can't see. Remember that the view from your second-story deck will usually be better than what you can see on foot, so ask your broker to pack a ladder.

Do your due diligence on the local real estate market. Pick up old classifieds and see if the same properties have been listed continuously for months. If things are slow, you'll have more bargaining power. On the flip side, if the market is hot, consider subsidizing your project (if you can afford to) by buying a double-size lot and building two homes, one for you and one to sell. There are huge economies of scale in the building
process and you can engineer a great deal this way--you might even get your home for free!

Be sure to inquire what services come with the land, like water, sewage, power, and access roads. Raw land can be alluringly inexpensive but beware of the time and money needed to improve the infrastructure. But as with other fixable problems, the absence of services can be an opportunity, too. Many people have been building in remote areas in Baja where beachfront land is still dirt cheap. The opportunity here is to build your home in an eco-friendly way--with solar power, desalinization facilities, and waste treatment systems. You will have a cool, self-sustaining home and save money on utilities to boot.

Before buying land, invest a few hundred dollars to test the soil and do a topographical survey. We were pleasantly surprised to find that our land was larger than the seller had advertised. Had we found that the lot was smaller, we might have been able to negotiate a lower price. We also did a soil test but unfortunately it did not alert us to some rock hard subsoil. Excavating that subsoil to lay the foundation required more time and money than we anticipated. Had we done a better test, we could have at least budgeted for it.

Once you've found your dream land, get yourself a good notario. Notaries in Mexico are not like the clerks in the US who stamp signatures; they are lawyers sanctioned by the government to process transactions. Among other responsibilities, they verify that there are no liens or title disputes with your land. They can also set up your fideicomiso, the trust instrument that foreigners need to buy land near Mexico's coasts and borders. Although notarios are licensed to act on behalf of the government, their fees can vary greatly. Solicit recommendations and interview at least three before choosing.

Consider getting title insurance, which costs about 0.7% of the total. I've heard horror stories about Americans who bought land in Mexico only to find that the seller did not have the right to sell them the land in the first place. This is particularly true of ejido land--communally owned land that is especially tricky to buy and sell. Two American title companies have recently become active in underwriting title insurance policies in Mexico. This has paved the way for US lenders to issue mortgages in dollars, collateralized by Mexican property. In the past, foreign buyers either had to pay in cash, borrow against their property back home, or get an expensive mortgage in pesos from a Mexican bank.

II. Finding a great architect and builder

A good architect can make or break your experience. If you can't marry one, take the time to find someone that's right for you. Drive around the neighborhood, pick out homes you like, and inquire about the architect. This lets you start with someone whose design style you like and who has experience in your area. Materials and building methods are very different in Mexico than in the US and Canada, so beware of using an architect that doesn't have local experience.

As important as a good architect is a rock-solid general contractor. Fortunately for us, Mariana has worked with the same builder for years, Ramon Calzada, who has a deserved reputation for always being on time and on budget. If you don't know a local builder, you will once again need to do some research. Ask everyone--your architect, your future neighbors, your realtor. Check references and visit other homes he's built to inspect the quality and to find out if the owners were happy working with him.

Some contractors will offer to "throw in" the architecture if you hire them to build your house. If you care for aesthetics, pass. Architects are not expensive in Mexico (generally 5% or less of construction costs) and contractors, if unchecked, will build your house in a way that's the fastest and most profitable for them. Indeed, a good architect can police your builder, which is especially important if you aren't around to
do this yourself. It will cost a bit extra to have your architect perform this supervisory role but it's worth it to ensure that everything is going according to plan.

Make sure to implement a pricing structure with your contractor that suits your interests. When we hired Ramon, we gave him the architectural designs and specifications and had him tally up the quantity and cost of every element, down to the last nail--a full binder's worth of numbers. Mariana then reviewed this with him. We ended up with a detailed estimate of how much the house was going to cost. Based on that, we negotiated a fixed percentage as Ramon's fee. Once we were all happy with this, we stopped being on opposite sides of the negotiating table. Ramon was free to cut costs without the perverse incentives that exist when contractors earn more by spending more (i.e., the common "cost-plus" arrangement). This worked beautifully for us. Ramon built the house as if it were his own--saving money at every turn by being creative and by negotiating tooth-and-nail on our behalf with every vendor.

III. Building and finishing your dream home

Visit the job site frequently. It's a lot of fun to see your dream house come to life: I took lots of pictures and made a scrapbook documenting the effort. Midway through the process, I printed 40 copies of the book (using a digital book printing company called Blurb) and we gave them out as gifts to the construction workers, which they all appreciated.

The risk in being on site a lot is that you will be tempted to make changes on the fly. In the US, this is frowned upon. In Mexico, however, while changes can be expensive and demoralizing to the workers, they are tolerated. We ended up making lots of last-minute modifications-moving columns when we saw they were blocking a view, extending a roof when we saw that we needed more shade. No matter how thorough your architect is, some design decisions are hard to make in the abstract; your house will be better if you're around to make improvements as you watch it going up. Indeed, one of the perks of building your own house is getting it precisely the way you want it. My only advice is to be prudent about what you change and how late in the game it is. Budget accordingly.

To save money, consider buying certain finishings in the US. Jamie traveled back and forth to the US on business and brought back all kinds of hardware, lamps, ceiling fans, electronics, etc. Many home furnishings are cheaper and better in the US. For example, we found brass doorknobs on sale at Expo Design Center for a fraction of the cost of comparable ones in Mexico. If you happen to be going back and forth regularly, consider sourcing certain things back home. It's worth the puzzled looks you'll get going through customs with a garment bag full of doorknobs.

Monitor your progress. We have friends who were nearly bankrupted when the cost of their house veered out of control. Ask your contractor for a detailed master schedule up front, and get weekly reports to track your progress. You can minimize surprises by staying on top of everything. If you can't do this yourself, hire your architect to do it for you.

Finally, make sure your builder guarantees your house for a period of time after completion. He may not like this arrangement, but you should negotiate a small holdback for a few months. When you move in, keep a list of everything that needs fine tuning. The holdback will give you some leverage to do what might otherwise be impossible: get him to return within an agreed-upon warranty period and fix whatever is not working properly. It will also be an extra incentive for him to get everything right the first time.

Jamie and Mariana are the founders of RedGuide.com, a new website to help foreigners buy property in Mexico. They also rent their home in Valle. Contact them at vallerental@gmail.com.

Download the Spring 2008 edition of Inside México Real Estate

catherine — Mon, 20 Apr 2009 12:42:50 -0700

There is something special about having an item tailor-made to your size and tastes. Whether it's clothing, a piece of furniture, or even a home, it's inspiring just knowing that it was made especially to suit you.

The package deal in Mexico certainly has its allures, and there are many all-inclusive resorts and villa developments that cater to those who want to lay down the cash and dodge the details. If you have the time and the fortitude, though, planning your own vacation and even building your own home in Mexico can be very rewarding experiences.

Our second issue of Inside México Real Estate, Building your Dream Home in Mexico, offers inspiration, insight, and practical tips on building a home that accommodates your dimensions and caters to your whims. You'll also find the same helpful information that you've come to expect from Inside México. We hope this and every issue serves as a guide and gives you the confidence to make real estate transactions as an educated consumer.

In our feature article, Jamie and Mariana Rosen share their experiences building in Valle de Bravo, Estado de México. With solid architectural vision and a lot of patience, they watched their dream home go up one brick at a time. Their narrative account chronicles important decisions every property owner should consider, and shares the fun they had along the way.

The sub-prime mortgage crisis let the air out of the US housing bubble last year. Subsequently, many professionals have been concerned about the domino effect tumbling south to Mexico. In a special opinion piece, real estate appraiser and consultant Bruce Greenberg addresses the American economy and the opportunity for real estate developers working in Mexico.

I love that IVA (value added tax) is already added to the sticker price in Mexico: it doesn't leave room for that surprise moment at the register. Unfortunately, taxes and fees surrounding real estate transactions tend to be weighty little items that are too often overlooked. To help you budget for these costs, we asked lawyers Jorge Santistevan and Gustavo González to put together a comprehensive tax and fee calculator.

Yes, the thought of building in Mexico can be a bit overwhelming, but it is also a great adventure. Whether you are interested in building or not, we think you'll enjoy the charming and engaging excerpt we've published from Barry Golson's book, Gringos in Paradise: An American Couple Builds their Retirement Dream House in a Seaside Village in Mexico (Scribner, 2006).

We hope this issue broadens your perspective on the range of possibilities available to homeowners in Mexico. As always we welcome your thoughts and suggestions: if you'd like to comment on an article in this issue, or if you have a question you'd like us to address in a future article, please write to us.

Now I invite you to kick back with this issue and start.

Download Inside México Real Estate: Building Your Dream Home in Mexico.

Email us: realestate@insidemex.com.

Buying Real Estate in Mexico City

margot — Sat, 11 Apr 2009 18:14:01 -0700

The New York Times published an article on buying real estate in Mexico City, and featured a $1.2 million USD, 500 sq meter hacienda in Coyoacan. Check it out here:

http://www.nytimes.com/2009/04/08/greathomesanddestinations/08gh-sale.html

Mitch Creekmore of Stewart Title and Jose Bernando Gonzalez of Tu Casa Real Estate speak about some of the factors making Mexican real estate attractive to foreigners these days, including the recent devaluation of the peso.

Playa del Carmen: Oceanfront property, please

catherine — Thu, 02 Apr 2009 16:03:38 -0700

Inside México: What percentage of your clients are Americans? Canadians? Europeans?

Judi Shaw: Typically our foreign clients are 50 percent American, 40 percent Canadian, and the balance Europeans. Although lately I would say that Canadians are leading the pack with the current [economic] situation in the States. Mexicans are very active clients in this area.

IM: Are they buying second homes, or a primary place of residence?

JS: Canadians and Americans are driving the second home market and Europeans are looking more as a permanent move.

IM: What price range are they looking in? How much space, and how many bedrooms and bathrooms can they expect to find in that price range?

JS: Second home owners interested in condos [look] for anything from $150,000 to $800,000 USD: the higher the price, the closer to the beach. Lately the sweet spot has been 200-350k , which is down from last year when the average property interest level was between 400- 600k.

Property inquiries for houses have remained constant, in the $1 to $3 million USD range, usually on the beach. Typically in this range a three-bedroom, three-bath house will have between 2000 and 4000 square feet.

IM: What kind of amenities are they requesting? (Pool, gated property, ocean view)?

JS: The most requested amenity is oceanfront or ocean view. Pools are highly desirable, as are gated communities and golf. A unique amenity in Playa del Carmen is the pedestrian-only section of downtown called 5th Avenue, which parallels the beach. People can walk securely and freely here, enjoying outdoor cafes and eclectic shops and restaurants, which drives the value of downtown real estate nearby.

IM: What draws your clients to Playa del Carmen? What distinguishes the area from other coastal communities in Mexico-especially nearby Cancún and Tulum?

JS: Besides the fabulously clear blue Caribbean ocean front, I often hear people use the word "authentic experience." Playa differs from Cancún visually because buildings are restricted to three or four stories.

The multiculturalism is a big draw. Many foreigners have set up shop, so it is easy to eat Swedish, Italian, East Indian, German, or Japanese food prepared by restaurant owners from those countries.

Unlike Cancún and Tulum, accommodation is walking distance from both downtown and the beach: no car is needed if not wanted. On the beach there are the hip beach clubs, while downtown 5th Avenue has smaller nightclubs and pubs, often used for social events and community fundraisers.

There is a [wide variety of properties]: very high-end homes and condos, beachfront communities, downtown lifestyles for the hip nightclub seekers, golf communities, middle-class working communities, and young family communities. Nearby jungle communities offer an "off grid" lifestyle.

IM: Do your clients feel like they're moving to a foreign country? Or is there a strong English-speaking presence that makes them feel more "at home"?

JS: Clearly the feeling of living in a foreign country exists, but everyone speaks English (and maybe also Italian or another language) so it is easy to fit in and find a sense of belonging. I think Americans or Canadians or other foreigners who are drawn to live, retire, play, and invest in Mexico get energized by the different cultural experience, otherwise they would choose someplace like Florida.

IM: Is access to medical care a consideration in their decision to move to Playa del Carmen? If so, how?

JS: It is a consideration, with the baby-boomers especially. In the past, good health care meant a trip to Cancún, but not any longer. The recently-completed hospital, with operating rooms and new state-of-the-art machinery for diagnostics and treatments, has attracted the best, brightest medical minds to its fully bilingual staff. It is now less of a concern for people to move here when they understand the quality of health care available. In fact, the medical tourism business in Mexico is flourishing because we can get elective treatments at half or a third the cost of back home.

IM: What other major lifestyle considerations do your clients take into account when purchasing in Playa del Carmen?

JS: Ease of airport access and air service to the area by major carriers, so that returning to their homeland is fairly easy and family and friends can visit with ease. That is a huge benefit to our region, as Cancún Airport is an hour away and has quick and easy service by many major carriers to all over the world. For families of young children there are English-language schools and great private schools here.

IM: Has the Playa del Carmen market been affected by the real estate turmoil in the US?

JS: We see less American buyers. It also means that foreigners needing to liquidate properties in Playa have incentive to sell at great prices. It makes for good bargain shopping for those able to purchase.

IM: What is your forecast for home prices in Playa del Carmen for the rest of 2009?

JS: While I think we may see a softening of prices, we won't see the same kind of bloodbath as in the USA. Until two years ago, most purchases here were all cash: there was no financing available for foreigners here in Mexico so ownership is solid. There is also a great rental market for many owners of second homes. Tourism is up, and where there is healthy tourism there is healthy real estate. I have several properties for sale where the rental income on the property covers all expenses and puts money in the owner's pockets over and above: a positive cash flow on a property makes it worth hanging on to.

IM: Is there any particular area in Playa del Carmen that you think represents a "bargain" for buyers from the US looking to buy there?

JS: There are pockets of opportunities as they arise with the needs of individual owners. However, a bargain is relative to each individual. A personal consultation is the best way to determine the needs and wants of people looking to invest in the area, and then they can go out and find that bargain!

Judi Shaw is a licensed realtor with Resorts Real Estate in Playa del Carmen. Their website is resorts-real-estate.com.

Puerto Peñasco Rocky Point: a stone's throw from the US

sue-ellen — Tue, 31 Mar 2009 15:12:51 -0700

Heidi Wosak is the director general and designated broker for Century 21 Sun & Sand in Puerto Peñasco.

Inside México: What percentage of your clients are Americans, Mexicans, Canadians, and Europeans?

Heidi Wosak: Approximately 75, 10, 10, and 5 % [respectively].

IM: Are they buying second homes, or a primary place of residence?

HW: Secondary homes.

IM: What price range are they looking in?

HW: $200,000 - $800,000.

IM: What kind of amenities are they requesting?

HW: Pools, ocean views, property management, and parking, specifically garages.

IM: What draws your clients to Puerto Peñasco?

HW: Ease of access driving from the USA. [It’s] only 3.5 hours from Tucson or Phoenix. Many Americans live here full time, and many locals speak English.

IM: What distinguishes the area from other coastal communities in Mexico?

HW : [It’s the] newest tourist destination in Mexico, and the Fonatur Marina (part of the Nautical Ladder of the Sea of Cortez) is in place. [It offers] clean beaches and proximity to the USA. A new international airport is due to open in early 2009 The new coastal highway starting from El Golfo de Santa Clara (located on the northeastern edge of the Sea of Cortez) and connecting all the way to Guaymas is under construction and nearing completion in the northern stretches, from El Golfo to Puerto Lobos.

IM: Do your clients feel like they’re moving to a foreign country? Or is there a strong English-speaking presence that makes them feel more “at home”?

HW: [It’s] close to the USA with many English speaking residents, Mexican and foreign.

IM: Is access to medical care a consideration in their decision to move to Puerto Peñasco?

HW: Yes, especially for retirees. New private hospitals are investing here. A new “One Stop Medical Clinic” is in operation, offering health service packages starting as low as $700 for the year for unlimited consultations. They have an in-house pharmacy and some of the newest equipment available to treat or diagnose.

IM: What other major lifestyle considerations do your clients take into account when purchasing in Puerto Peñasco?

HW: What is there to do? We have three golf courses, two of which are Jack Nicklaus-designed. [There are] fishing charters, scuba, and snorkeling, [as well as] active groups in the community [such as] the Red Hat Society for ladies and the South of the Border Singles Group. The American Legion has Post #15 here and meets monthly.

IM: Has the Puerto Peñasco market been affected by the real estate turmoil in the US?

HW: Yes. Last year it dropped 49 %.

IM: What is your forecast for home prices in Puerto Peñasco for the rest of 2008?

HW: Prices here have leveled off to what we feel will be the lowest ever. During 2003-2005 properties here appreciated from 15-100%.

IM: Is there any particular area in Puerto Peñasco that you think represents a “bargain” for buyers from the US looking to buy there?

HW: Sandy Beach and Las Conchas are the two areas that experienced phenomenal growth over the past eight years, both in construction and appreciation. [They] differ in that one is a resort beach while the other is a residential community. These are the two preferred areas and as such, most of the growth and construction has occurred there. With increased inventory available on the market today this is where you will find sellers more motivated to move the property off the market and recoup their investment.

Lower Priced:

Los Claveles is a patio home community consisting of thirty-three houses, each with its own two-car garage. The houses come complete with A/C and heat, and stove, refrigerator, microwave, dishwasher, and washer/dryer. Prices start in the low $100,000s and developer financing is available. 2 or 3 bedroom options, with a second floor option on select units.

Middle Priced:

1) Lindavista Ocean View Condominiums. Lindavista is an ocean view gated condominium complex, located within Las Conchas Resort Development offering 1 and 2 bedroom condos for sale or rent, delivering during summer 2008. Complex features ample parking, a grand pool with palapa, swim up “Aqua bar’, BBQ area, fitness center, and wireless Internet. Facilities for on-site property management and 24-hour security are available, as well as individual storage units that are large enough for an SUV. Interior amenities include ceramic tile, granite countertops, stainless sinks, imported marble features, doubleglazed windows, sliding doors, solid wood doors, Moen fixtures, and prewiring for phone, Internet, and cable. Prices start at $163,900 for a 1 bedroom and $249,900 for a 2 bedroom.

2) Bella Vista Homes. Sandy Beach’s newest residential community, offers well-appointed homes and condominiums, affordably priced from $139,000 to $269,000. This gated and secure residential community surrounds a glistening pool, fitness and fun center, large patio adorned with a palapa, sitting area, BBQ, and beautiful ocean and golf course views. Featured home and condominiums include 2-4 bedroom floor plans and 2-3 bedroom condominium models. The respected local builder knows what you want in a home or condominium: quality, functionality, and affordability. Bella Vista offers just that with close proximity to beaches, shopping, and restaurants. Golf is right across the street.

Higher-priced:

Luna Blanca is an oceanfront luxury condominium resort and is located along the La Pinta Estuary and Playa Miramar Beach of Puerto Peñasco. Delivered during 2007 this resort has it all. With only 7 units left for sale, now is the time to purchase here. Luna Blanca offers 2br/2.5ba condominiums, 3br/3ba villas & 4br+ penthouses, starting at $680,000. Interior features include oversized marble tiles, high quality stainless steel appliances, and granite kitchen. Resort amenities include 11,000+sf infinity edge pool, lounges, day beds, cabanas, and Jacuzzis. Concierge and Internet onsite. Ownership here includes a Lifetime Golf Package!

Email Heidi Wosak at heidiwosak@century21penasco.com.

Lakeside in Ajijic: a wealth of options within walking distance

sue-ellen — Tue, 24 Mar 2009 08:07:19 -0700

Inside México: What percentage of your clients are Americans? Canadians? Mexicans? Europeans?

Jaime Niembro: American: 50 percent; Canadian: 40 percent; Mexican: 7 percent; European: 3 percent.

IM : Are they buying second homes, or a primary place of residence? JN: About 80 percent are buying a primary place of residence. Others only live here part of the year. IM : What price range are they looking in?

JN: The average price range is approximately $275,000 USD.

IM : What kind of amenities are they requesting?

JN: Many wish to have a garden area and view of Lake Chapala. A small number wish to have a swimming pool and be in a gated community. Most want at least two bedrooms and two baths. Many wish to be in a central village along the lake, rather than isolated in open space not yet built up. The most popular area is in the village so they can walk to restaurants, shops, bank, plaza, etc.

IM: What draws your clients to Ajijic? What distinguishes the area from other communities in Mexico?

JN: Many like the year-round spring-like climate and the cool summers during our rainy season. Some come for the tranquility, safety, and low crime rate. We are thirty minutes from an International airport (Miguel Hidalgo in Guadalajara) and fifty minutes from a large city (Guadalajara, with a population of six million); there are many clubs, charities, and other activities to keep them occupied, and it is a four-to-six hour drive to beaches. A car is not needed for daily living, as most places in the villages are walking distance. The warmth of the people is also a draw: they are very understanding when there is a language barrier, and go out of their way to help the transition to a new environment and include visitors in their activities. Many expatriates also become involved with the charities in the area, such as the School for the Deaf, orphanages, Red Cross, Humane Society, and scholarship groups.

IM: Do your clients feel like they’re moving to a foreign country? Or is there a strong English-speaking presence that makes them feel more “at home”?

JN: This area has a large English-speaking community so most feel very comfortable when English is their only language.

IM: Is access to medical care a consideration in their decision to move to Ajijic? If so, how?

JN: Medical care is superb and low-cost. A doctor visit is approximately $15 USD. Some emergency room visits are as low as $20 USD. A specialist will cost approximately $25 USD per consultation. If a family joins the Mexican Social Security system, the approximate annual cost, depending on age, is $500 USD per family. Private health care is available through insurance companies. There are quite a few clinics, doctors, dentists, spas, etc. in the area, with major hospitals in nearby Guadalajara if additional equipment or facilities are needed.

IM: What other major lifestyle considerations do your clients take into account when purchasing in Ajijic?

JN: We have more than fifty English-language clubs in the area, such as the Lakeside Little Theatre, Culinary Club, Computer Club, sewing groups, garden clubs, Bridge clubs, writers club, the American Legion, Daughters of the American Revolution, and Sons of the American Revolution. There is a fabulous assortment of fresh fruits and vegetables available year-round at low cost. Restaurants are abundant and the food is good and reasonable, and you never feel rushed; even with just a cup of coffee, no one seems to mind if you sit and chat for hours.

IM: Has the Ajijic market been affected by the real estate turmoil in the US?

JN: Not noticeably as yet. Probably more wish to purchase than are able to, being at present unable to sell in the US in order to purchase here. Once a property is bought, the cost of living is much lower, since most are purchased in full with no mortgage. Property taxes are extremely low compared to the US, and utilities are moderate. Maintenance and upkeep are easy to obtain and relatively inexpensive.

IM: What is your forecast for home prices in Ajijic for the rest of 2008?

JN: Homes are a major investment and will most likely remain stable...and possibly rise as more Baby Boomers retire.

IM: Is there any particular area in Ajijic that you think represents a “bargain” for buyers from the US looking to buy there?

JN: Most villages and areas have homes in all price ranges, no specific “bargain” area.

Jaime Niembro is the founder and broker of Ajijic Real Estate: www.ajijic.com and (376) 766 2077. His email is jaime@ajijic.com.

Market value

catherine — Sun, 15 Mar 2009 20:17:53 -0700

Property appraisals made by experts and certified appraisers can differ by as much as 200 percent, depending on assumptions and methods used for coming up with an economic value for the property in question.

Obviously, it's to everyone's advantage-real estate buyers and sellers, bankers and investors-to minimize discrepancies and ensure that the appraisal is always as close as possible to market value, since so many other terms of the deal are based on the appraised price.

At the end of the day, every deal should happen at market value-the price agreed upon when both buyer and seller are well advised, have access to the same information, and act according to their mutual interests.

What's the best way to come to a reliable and objective price?

The value of a property is naturally linked to its optimal use. First, walk through the following steps and note the characteristics of your property:

1. Identify zoning. Zoning laws have a direct impact on the value of the land. An appraiser may discount a property if she thinks that there may be a conflict with the local zoning board. Land that has already been zoned for the use you are seeking may cost more, but the risk of local anti-development protests or denial of rezoning applications by local governments is minimized. Traditionally, cities with lots of development underway are more likely to resist rezoning, because they need to respect existing urban plans and abide by construction rules and regulations.

2. Validate physical feasibility. What are the physical limitations of the property? Crunch these two numbers:

Plot ratio: The actual square footage of the proposed site.
Construction ratio: The maximum buildable area (vertical as well as horizontal) permitted on the site.

3. Analyze financial performance. How much will it cost you to develop the property (from acquisition through construction, completion, leasing, or sale), and how much can you expect to earn? How long will each of these phases take?

4. Choose the property that offers the best financial performance. There are many metrics used to determine how successful a project might be: Internal Rate of Return (IRR), loan-to-value ratios, and debt service coverage ratios are just a few numbers that any real estate investors worth their salt need to understand. Analyzing these numbers based on different development and market scenarios will help you choose the right property for you, its right use, and its ultimate value.

Other factors may determine the appraisal value of the property as well as its intrinsic worth to you. Demolition costs, ownership by community groups such as ejidos, time required to obtain necessary building permits, local crime rates, and even local labor costs all need to be taken into consideration.

What are the most common appraisal methods?

Comparative appraisal: How does your property compare to similar properties that have recently sold? No two properties are identical, but sale prices of properties like yours are relevant data points for what yours is worth.

Advantages: Easy and fast.
Disadvantages: Reliable information about market transactions is not always available.

Residual appraisal: This technique subtracts the building costs and profits of a proposed development to arrive at the net land value associated with the expected financial benefits of a development.

Advantages: This technique doesn't require finding comparable transactions, and it links the maximum value of a lot to the financial expectations of the project
Disadvantages: Small changes in individual parameters or assumptions can generate significant changes in the result of the appraisal, so you'll want to model numerous scenarios to understand the impact of different variables.

OK...so where do I go from here?

Now that you know a bit about how the appraisal process works, here are some pointers for increasing the likelihood that you get the most accurate appraisal for your property:

1. Find or commission a market study that examines the feasibility of the project you want to develop, including forecasts of costs and income.

2. Make sure that your estimated construction budget is consistent with reality. For example, labor costs are about 30 percent higher in Cabo San Lucas than in Mexico City, so the same construction will cost more in Los Cabos than in Las Lomas.

3. Set the appraisal cost at the beginning. In many cases, professional appraisers charge clients as a percentage of the appraised property value, creating a conflict of interest and possibly skewing the objectivity of the appraiser.

4. Apply more than one methodology. Each appraisal methodology has its advantages and drawbacks; I recommend using more than one method so that you can compare the results and come up with the most reasonable estimate of what your property is worth.

As the escrow flies south

catherine — Sun, 15 Mar 2009 20:05:45 -0700

Ask most Mexican homeowners "What is an escrow account?" and they might not know what you're talking about. That's because in Mexico, real estate transactions are closed at the Notary Public's office, when the public deed for a deal is signed, and the buyer delivers a check to the seller for the purchase price. All payments are done directly from buyer to seller.

In the US and Canada, on the other hand, buyers are used to paying for property indirectly, through a neutral third party escrow account: an initial deposit is made when the purchase agreement is signed; more funds are transferred when certain conditions are met (for example, when the roof of the house is finished, or when title insurance is issued); and the final deposit is made when the home is complete and delivered. All funds are deposited into the account of an escrow agent, in accordance with the provisions of an agreement signed by the parties. This escrow agreement dictates the timing and conditions required for each deposit made. Escrow agents charge a fee (usually $500-750 USD) for opening, administering, and releasing the funds according to the agreed-upon terms.

Foreigners who purchase second homes or land in Mexico often want to incorporate the US escrow process into their Mexican real estate transaction. This tends to be easier in areas where foreigners have a strong presence, and in "restricted zones" where the closing process is more complicated. For example, in Los Cabos, where most buyers are foreigners, escrow is common and used by most attorneys and closing agents.

Here are a few tips for using an escrow account in Mexico:

1. ALWAYS use a US-based escrow agent. The most respected and knowledgeable about the Mexican market are First American, Stewart Title, and Fidelity. Even if Mexican banks have products similar to an "escrow account" (like a custodial account or deposit account), none are based on a mutually agreed escrow agreement; additionally, their processes can be slower moving than the US institutions'. Plus, they are not very dynamic.

2. AVOID depositing more than 30 percent of the purchase price directly to the seller/developer's bank account. The concept of escrow is gradually being accepted in Mexico but many still see the purchaser's down payment as a way to finance construction.

3. NEVER deposit funds directly into a real estate agent's bank account, no matter how good a reputation the agent has, or what they call their account (ie. "trust", "escrow", "good-faith", etc.). Doing so is risky and creates confusion during the closing process.

4. BE AWARE that many developers are using escrow accounts as a marketing tool, but a close look at their purchase agreements shows that they have authorized themselves to release the funds in their (the developer's) favor. This mechanism nullifies the entire purpose of the account, which is to safeguard the purchaser's money until the transfer of ownership takes place.

5. RESEARCH the different options available to you. Some developers have special deals with US escrow agents, and there are some special agreements for transactions involving financing. You might also want to open an "interest-bearing" escrow account if your money will sit there for a long period of time.

6. LOOK FOR the best escrow fee. You can save as much as a couple of hundred dollars by shopping around.

7. ASK your local attorney/closing agent to explain the advantages and disadvantages of each particular escrow agent. Each is suitable for different purposes.

If you're planning to buy in Mexico, the ideal situation would be to deposit 100 percent of the purchase price in an escrow account. If your seller or developer pushes back on this, then you should try to negotiate a combination of giving a direct down payment to the developer, and putting the balance of the purchase price into an escrow account. This will protect you against abuse and will guarantee your purchase.

Pedro Perichart is a founding partner of P&H Closing Services in Cabo San Lucas, BCS. He is a former associate in Solcargo Real Estate and Corporate Law Practice Group where he specialized in real estate cross-border transactions, closing services and international contracting. phcs.com.mx

Puerto Vallarta

sue-ellen — Sat, 14 Mar 2009 02:20:32 -0700

*All prices in US dollars

Inside México: What percentage of your clients are Americans? Canadians? Mexicans?

Darryl Bowie: Mexicans and Americans are about 40 percent each; 20 percent are Canadian.

IM: Are they buying second homes, or primary residence?

DB: The majority are looking at second homes. Those looking for retirement are seeing more products and we expect higher numbers in the future. One thing to remember is the “Dream”—a place in the sun where family and friends can reunite and rejuvenate, and this dream is not going away; it is simply on hold.

IM: What price range are they looking in?

DB: Those wanting it all under $250,000 find prices are much higher. The market under $400,000 is strong. The soft range is $500,000-$1 million: choices are fantastic but a ‘wait-and-see’ mentality is affecting this sector. This is where the best deals can be made. After $1 million we see sophisticated investors looking long-term.

IM: What kind of amenities are they requesting?

DB: Condo buyers want it all: concierge services, spa, business center, restaurant, water sports, children’s area, and more. Properties are branding themselves in unique ways. ICON Vallarta has the brand power of Philippe Starck. San Pancho bills itself as a cultural center, while Tahemia and Sensara, with on-site medical concierge, target active retirees. Luma is adults-only. Home buyers want colonial architecture; high-end condos are going modular, with separate living, sleeping, and entertaining areas.

IM: What distinguishes the area from other coastal communities in Mexico?

DB: People are friendly, helpful, and happy. Arts and music are a vibrant part of the community; the variety of dining is world-class. The climate is consistently pleasant. The annual whale migration is a major tourist attraction. All the golf gurus are building here; Nicklaus, Weiskopf, Norman. It is accessible from every major airport in North America within a four-hour flight time.

IM: Do your clients feel like they’re moving to a foreign country?

DB: This is a foreign country and you feel it, you like it, you want to understand it, yet there are enough English-speaking nationals to make yourself understood. Folks here are very accommodating.

IM: Is access to medical care a consideration?

DB: Puerto Vallarta has some of the best [care] in Mexico. There is the San Javier Marine Hospital and a new AmeriMed hospital under construction, and a new oncology facility. North Americans come for dental work and elective surgery: it’s faster, better, and costs less. Not to mention a very nice place to recover

IM: What other major lifestyle considerations do your clients take into account?

DB: Activities: [residents can] golf, hike, fish, surf, sail, dive, and more. The other question is ‘How can I contribute to the community?’ Expats are very active in the community with volunteer work and philanthropy.

IM: Has the market been affected by the real estate turmoil in the US?

DB: [Buyers] are more cautious, shopping for the perfect property and in some categories we are seeing prices drop, but it is not a wholesale reaction to the US situation, and Canadians are buying.

IM: What is your forecast for home prices in Puerto Vallarta for the rest of 2008?

DB: [Prices] remained mostly flat for the past six months and are now trending downward. Once another winter hits the North and the election has been decided, we believe the market will tick upwards slightly in the first quarter [of 2009].

IM: Which area do you think represents a “bargain” for buyers from the US?

DB: New condo construction that has recently come to market, with an owner/speculator leveraged in the $500,000-$700,000 range. The other area is single-family homes in good neighborhoods in the low- to mid- $400,000 range. Anything oceanfront around $1.5 million is primed for price reduction. These areas are Conchas Chinas/Amapas, Old Town, Las Glorias, and Nuevo Vallarta.

Darryl K. Bowie is the assistant general manager of Coldwell Banker, La Costa Realty: www.cblacosta.com.

Cancún: Gateway & Getaway

sue-ellen — Thu, 05 Mar 2009 18:04:12 -0800

Ricardo Barraza is broker/owner of Ricardo Barraza & Asociados Real Estate Broker Group in Cancún.

Inside México: What percentage of your clients are Americans? Canadians? Europeans?

Ricardo Barraza: It depends on the market; low-priced ($30k - $180k) is 90 percent Mexican and 10 percent expat retirees. Medium priced($190k - $400K) is 60 percent Mexican, 20 percent American, 10 percent Canadian, and 10 percent European. The high-priced market ($450k - $1.5M) is 40 percent Mexican, 30 percent American, 20 percent European, and 10 percent Canadian.

IM: Are they buying second homes, or a primary place of residence?

RB: Within the low-priced market it’s primary, in the medium- and high-priced markets it’s more often for second homes.

IM: What kind of amenities are they requesting?

RB : Most want gated communities but any other amenities really depend on the price range they are looking in.

IM: What draws your clients to Cancún? What distinguishes the area from other coastal communities in Mexico?

RB: Cancún is a gateway to many cities worldwide with inexpensive non-stop flights. Cancún has one of the most beautiful beaches in the world, first-class medical care, and a very good school system. It is also the largest city in Quintana Roo, with the best services and infrastructure in the state.

IM: Do your clients feel like they’re moving to a foreign country? Or is there a strong English-speaking presence that makes them feel more “at home”?

RB: One thing that draws people to Cancún is the Mexican culture, food, and way of life. But at the same time, Cancún has many international restaurants, shops, and cinemas, and English is widely spoken. In addition, there are many business owners from all over the world and many international clubs for people from various parts of the globe.

IM: Is access to medical care a consideration in their decision to move to Cancún? If so, how?

RB: Mostly with people of retirement age: as I mentioned earlier, Cancún has first-class medical services.

IM: What other major lifestyle considerations do your clients take into account when purchasing in Cancún?

RB: For many people who relocate to Cancún or purchase their second home here, it is a place to come and relax. Although Cancún is growing, it is still a very laid-back town. I believe the beaches, world-class golf courses, nearby colonial towns, and the simple charm and beauty of this area are all a big consideration for my clients when making the decision to purchase here.

IM: Has the Cancún market been affected by the real estate turmoil in the US?

RB: Yes. We are not seeing the number of low- and medium-priced market buyers that we normally do from the States.

IM: What is your forecast for home prices in Cancún for the rest of 2008?

RB: There is a lot of construction and new development going on right now so I forecast that prices will remain steady within the various price ranges.

IM: Is there any particular area in Cancún that you think represents a “bargain” for buyers from the US looking to buy there?

RB: All over Cancún there are developments offering low-interest financing, from 5 to 6.5 percent, with 30 percent down. This includes residential, commercial, and industrial realestate.

Contact: www.ricardobarraza.com;email: information@ricardobarraza.com; telephone (toll-free): 1 866 587 2481.

Celestun, Yucatan: Sharing the dream

catherine — Mon, 02 Mar 2009 22:11:08 -0800

Karen Strass and her husband Kenn hail from Saskatchewan, Canada. They moved to Celestún, Yucatán on the Gulf coast, a spot famed for its flamingo population, where they built a beachfront guesthouse called Casa de Celeste Vida (Home of Heavenly Life). Three guest suites make up the ground floor, and their living space is upstairs.

Inside México: How did you choose Celestún?

Karen Strass: For years I dreamt of running a guesthouse on a beautiful beach, but I never thought it would really happen! It had to be Mexico: I love this country. We chose Celestún because of the beautiful secluded beach, location away from hurricane paths, affordability of the land, and because Mexico is still close enough to home.

IM: What distinguishes Celestún from other areas of Mexico that you're familiar with? How would you describe it to an outsider?

KS: It is still a very real Mexican village. The people are wonderful, friendly, and welcoming. We have been included in weddings and birthdays. Good friends of ours recently had a baby and named her after me-truly an honor.

IM: Do you feel like you're living in a foreign country, or is there a strong English-speaking presence that makes you feel more "at home"? Who are your neighbors?

KS: When we sometimes struggle with legal issues or find our Spanish isn't good enough, then of course we feel like foreigners. But for the most part we are at home here. We mingle with the people in the town and see them as our friends. This is their country and it is we that need to adapt-we feel it is a privilege to be here.

Many of the neighbors are English-speaking, mostly from Canada or the US. Some speak better Spanish than we do but we get better day by day. Some live here full-time, some just for short stays. In the spring when the foreigners leave it can get very quiet and even a bit lonely. When you have a day like that it's time to hop in the car and go discover what the Yucatán has to offer.

IM: How did you develop the architecture, floor plan, and "feel" of the house?

KS: We chose a guesthouse instead of a B & B. We wanted guests to have utmost control over their vacation time here and not be tied into a breakfast-time schedule, so all three suites needed kitchen areas. We thought where to place windows for the best air flow, and how to best withstand a hurricane. We gave guests areas to mingle and visit, areas to relax, and provide them all with privacy. It had to look both good, like it belonged on the beach, and welcoming, so guests would remember their holiday and maybe even come back again. I drew up the plan over a two-week period: I have no training but I know what I like and what makes a home functional, and I think I have a good eye for details. Once I was satisfied, my cousin set it to architectural block form with just a couple of very small changes. Celeste Vida was built from the ground up by a Mayan crew who are the stone masters of Mexico.

Having the suites downstairs works great: the rooms are accessible and bringing luggage is so much easier with the rooms on the ground floor.

IM: What amenities did you want guests to have? What amenities did you want to have yourself?

KS: All the comforts of home. Self-catering and separate entrances, to give everyone separate spaces, and comfy beds were very important. Available maid service. Beautiful views from every room. A very quiet atmosphere. Of course we are happy to socialize if guests like: we want them to feel at home.

For us, privacy when we need some. Our home is functional but comfortable and when we sometimes invite guests upstairs we want them to feel at home. We live fairly simply but we are very happy!

IM: How long did it take to get the house in the shape you wanted?

KS: The first sand was turned on April 1, 2006 and we welcomed our first guests on December 27 of that same year. Two years later we are enjoying the yard as it matures and are still making improvements. We have plans for an outdoor patio/BBQ area for guests to enjoy, and possibly a pool, but that is still a few years away.

IM: What kind of daily, weekly, and/or monthly maintenance work goes into the upkeep?

KS: The reality of running a business like this means working almost every day. We rise early to open the gate, check the water cistern, water the yard, tidy the house, do laundry, and set up on the beach. Then we head upstairs to do our own chores. We check with guests to see if there is anything they need, like clean towels or maybe a lift into town. When we are very busy or when Kenn is working in Canada (at least four months each year) we hire a local lady to help out. The salt is hard on the building, which we clean by spraying twice a year, and we always seem to be painting something and performing maintenance. Two years in we are getting better at taking time for ourselves, and we do relax more than we used to. We moved here to have a wonderful life and more time together, and we do.

IM: How have you marketed Celeste Vida? Where do your guests come from, and how have they heard about you?

KS: We have designed a website, celestevida.ca, and we also advertise on other vacation rental websites. We have brochures and business cards to hand out when people stop in as they drive along the road, and word of mouth helps. Most guests come from Canada, but also from the USA, Europe, and Central America: all wonderful people and we feel so fortunate to share our dream with them.

Celeste Vida floor plans, photos, and rates are available on the website celestevida.ca. Karen and Kenn Strass can be reached by email at celestevida@sasktel.net, and by telephone at 988 916 2536.

Learning to live green

catherine — Thu, 26 Feb 2009 23:24:55 -0800

When Beatrice Briggs decided to build a house and yoga studio near Tepoztlán, Morelos, she wanted a home that would reflect her "own ecological values, [and her] desire to make something that would be beautiful, comfortable to live in, and could serve as an inspiration to others."

She sought out architect Michel Lewis, a team of solar experts, and water systems designer Art Ludwig. Together, they built a large (4000+ square feet) structure that, in spite of its dimensions, has a minimal impact on its environment.

Her home, named Huehuetortuga (Nahuatl for the "old, old turtle"), exemplifies the opportunities-and occasional compromises-involved in sustainable building. The house is situated on the southern slope of a hill: this exposure, along with the region's mild climate (ranging from 24 to 32 degrees Celsius) makes heating systems unnecessary: skylights allow solar energy to enter and be absorbed in adobe walls, which release heat at night.

In addition to locally-made adobe bricks, construction materials included stone found on-site, recycled red roof tile, and non-endangered hardwoods sealed with linseed oil. Slate from Taxco was used for the terrace. The natural building supplies mean that Briggs's home is free of chemicals found in synthetic materials.

Electricity is provided by twelve photovoltaic solar panels on the roof. The energy is stored in batteries, and supplemented during the June-October rainy season by a water turbine, which has "kept the lights on during two weeks of cloudy weather," according to Briggs. The state power grid and a gasoline-powered generator exist as seldom-used backup systems.

Water was a major concern. This part of central Mexico averages 1,400 millimeters of rain per year, but most falls during the four month rainy season: drought conditions prevail the rest of the year. Water designer Ludwig created a system of two cisterns: a 50 cubic meter tank behind the house fills with rainwater and is fed by a nearby seasonal waterfall. It supplies the solar hot water heaters and the cold-water faucets in the house. A secondary 25 cubic meter unit is replenished by runoff from the roof, and feeds the kitchen and laundry areas.

Water is conserved through the use of low-flow fixtures and a composting toilet (there are six-liter low-flush toilets available as well). Because bathrooms and the kitchen are far from the hot water tank, Ludwig designed a system of pumps to circulate the water as it heats, avoiding waste and time spent waiting for it to warm up. Wastewater from the flush toilets is treated and eventually ends up in a constructed wetland, while gray water is used to irrigate fruit trees and plants.

Bea Briggs is proud of her home. It is very comfortable, though she admits that the finished result isn't perfect. Nonetheless, the systems at Huehuetortuga have served as examples for people seeking a more sustainable way to live. Briggs will see "some efficiencies and economies over the long run," but "the main return on the investment is the (on-going) learning process and the ability to show what is possible."

You can contact Beatrice Briggs at bbriggs@iifac.org.

To learn more about her house and sustainable development classes visit the website: huehuecoyotl.net

An urban oasis in Colonia Juárez

margot — Sun, 22 Feb 2009 17:44:06 -0800

Inside México: What do you do?

Rowena Morales: I'm a jewelry designer and part of Colectivo 7, a group of designers with a store in la Condesa. I've been working with jewelry since the 1970s, when I studied at the Central Saint Martin's College of Art and Design.

IM: How long have you lived in this apartment?

RM: I've lived here for seven years. I was looking for an apartment to buy, and a friend came along with me to look at this place. It was in total ruins! My friend thought I was crazy, but I fell in love with the apartment's lovely original details. I could see what a special place it was.

The floors were covered with this fake-marble linoleum. The walls were all stucco. The door hinges were covered with layers of paint,butI took the doors off and cleaned them and they were marvelous. I opened the closet and found that underneath the linoleum were wood floors and gorgeous tiles. The apartment was in a horrible state but the details were all original. Nowadays, people don't appreciate these things, they don't take care of them.

IM: How long did it take you to renovate?

RM: Eight months. I did a lot of the work myself! I'd be down in my studio working, and the guys renovating the house would be up here. I'd come up and see what they were doing, then take the tools myself and say, do it like this, do it this way. I did so much with my own hands. I worked side by side with them.

It was like jewelry... jewelry is construction, it's architectural, the techniques I'd learned in jewelry making applied for construction as well. You have to have a logic about it as you work, you have to be very methodical.

IM: How long do you think you'll live here?

RM: Well, I've been spending a lot of time in Valle de Bravo lately. I'm thinking of opening a store there, the change and the quiet are good for me. I'm actually looking for someone to rent the apartment now, but I'm in no rush, I want to find the right person.

IM: Why is this building called Buen Tono?

RM: These apartments were built in the early 20th centuryby a man named Ernesto Pugibet, a very wealthy businessman who owned a cigar company called Buen Tono. The three Buen Tono buildings, Ideal, Mascota and Gardenia were named for the three different brands of cigars the company sold.

There was a lady who used to live here, she was in her 90s and died three or four years ago. Her parents came to live here as newlyweds. She said that at that time, Buen Tono was the pinnacle of modernity, it was one of first really luxurious buildings where you could rent, not buy. They had a team of carpenters and handymen keeping the place in top shape.

IM: What's your favorite room in the house?

RM: The studio. I spend so much time working that having a comfortable space is important. The light is wonderful. You can hear the birds singing and the children playing downstairs. Here, we're right in the middle of the city. There's so much traffic and noise and all the people, it's so urban. Then you come inside and it's quiet, and there's a real sense of peace. It's incredible to have those two things so close together.

Riding out the storm

sue-ellen — Mon, 16 Feb 2009 01:26:43 -0800

Connie Hearn is the founder of Dallas-based Advanced Mortgage, one of the first US-based brokers to specialize in mortgages for the Mexican market. Inside México talked with Connie about what to expect in the Mexican real estate market in 2009.

Inside México: How is the current economic situation affecting the Mexican real estate market?

Connie Hearn: People are buying in Mexico not in spite of, but because of the economic difficulties. We’re seeing more Americans and Canadians financing in Mexico. There are two basic segments: first, people who see long-term value in retiring here and are looking for a way to stretch their savings. Then there’s the second home market, which has tended to purchase with cash, often based on the equity of their homes in the US. Now that home values are much lower, there’s less equity, and they have to turn to financing. But they still want to buy; that hasn’t changed.

IM: So you’re not expecting a dip?

CH: I believe the Mexican market will have healthy sales in 2009. I don’t think we’ll see as much construction; for a while, construction projects were sprouting up everywhere, all over Mexico. Some of those have been funded, some have been put on hold. But from what we see there is a healthy stream of people looking to buy in 2009, and they’re taking the steps they need to get qualified for financing. When we talk to other friends and colleagues in the business, they’re seeing the same thing. This market is not going to stop. Being a lender in the US right now—now that’s a challenge! But Mexico has always had strict underwriting standards; it hasn’t had the same kind of credit quality problems. I talked to the folks at GE Money and they have not had one single loan default since they introduced the Mexican mortgage product three years ago.

IM: Are there particular local markets that you see moving one way or the other in 2009?

CH: Well, Los Cabos was so hot for so long, there was no way it could do anything but go down a little, and that’s what we saw in 2008. But there are markets that are growing, where prices are still very good: Mazatlan is one of them, and we’re also seeing growth in Puerto Aventuras [on the Mayan Riviera]. The Mexican government is investing a lot in the infrastructure of Tulum, which makes it attractive.

IM: Do your clients fit a particular profile?

CH: A good percentage of our Mexican mortgage clients are self-employed; we don’t see a lot of “W-2” people. They are entrepreneurs who have successful businesses in the States and are willing to invest in Mexico over the long term. Most of them currently use the Mexican house as a second home, but once they’re retired plan to spend most or all of their time there. We’re also seeing more cash-out loans for people who had already bought a house in Mexico for cash. They want to take liquidity out of the house, maybe to reinvest in the US stock market. Some of them just want to have cash on hand. One gentleman took a large sum out, 50 percent, and used it to buy his house in the US. I’ve been telling clients about it for a long time, that they had this option to access the equity in their Mexican home, but it’s only in the last three or four months that we’re really seeing them take advantage.

IM: What advice do you give to people who want to buy in Mexico?

CH: First of all, educate yourself on the process, and get familiar with the way things are done in Mexico, including the fideicomiso structure. Once you’re comfortable, find a reputable realtor and seller. Understand that there is no verbal agreement in Mexico; the contract is exactly what’s on paper, so make sure you get absolutely everything in writing. If you need financing, get a good mortgage broker with experience in Mexico. Ask them how many Mexican loans they’ve closed. Also, realize that this is a time-consuming process. In the US, you can buy a home in two or three weeks; in Mexico, it could take several months.

Taking stock of the downturn

catherine — Wed, 11 Feb 2009 18:47:37 -0800

Eugene Towle is the founder and Managing Partner of Mexico City-based Softec S.C., a research and consulting firm specializing in the Mexican real estate market. Inside México spoke with Mr. Towle to get his thoughts on trends in the market for foreigners in Mexico.

Inside México: Can you give us a perspective on how the Mexican real estate market has been impacted by the recent financial downturn?

Eugene Towle:By mid 2007, construction lending had tightened in Mexico. Fortunately, there was very little inventory overhang in Mexico, at most six months; here, for the most part, things were being bought as they were built. Tightening credit made the market healthier.

In contrast, the US had two years of inventory; Spain had four.

Also, Mexico did not have as abrupt a drop in interest rates as the rest of the world did. Mortgage rates here have been stable between 10 and 12 percent. This is as opposed to Europe and the US, where extremely low levels of interest rates enabled people who could pay a $1,000 USD a month to go from being able to afford a $100,000 USD house, to buying, say, a half-million dollar house. Here, the $1,000 USD monthly payment still bought you the same $100,000 USD house. The drop in interest rates in the US and Europe increased purchasing power on the part of consumers much faster than new homes could be produced. This of course sent home prices much higher, and people started speculating and buying houses just to sell them at a profit.

Here we didn’t have that. This was and continues to be a user market, as opposed to an investor market.

IM: How has this affected the second home market for foreigners?

ET: Sales to foreigners really started to blossom with the drop in interest rates in 2005; that’s when this market reached a critical mass. Today, the market for foreigners is about 10,000-12,000 new homes sold, and about 10,000-12,000 existing homes sold.

The NAR [National Association of Realtors] in the US did a survey that showed that in 2007, Americans bought one million second and vacation homes. Europeans bought another 600,000 units. So Mexico contributed just about 1 percent of that total: the current penetration is very low. Now, the Mexican market has grown rapidly; it’s gone from 5,000 units a year to 20,000 in four years, but when you compare it to a market like Miami, which in spite of the downturn is still selling 40,000 units, you see we have a ways to go.

Mexico offers tremendous value for the foreign second home buyer: in Florida, the Bahamas, California, you can pay $1,000 USD a square foot for good beachfront property; in Mexico, it’s $200-$400 USD a square foot. Yes, real estate prices have increased here, you see it in places like Punta Mita; on the other hand, the recent 20-30 percent devaluation of the Mexican peso works strongly in favor of the international buyer.

The other thing that becomes fascinating for the Baby Boomer or retiree is the fact that health services and everyday expenses also cost less. For example, my father lives in Mérida, and he recently punctured his lung. The cost of his treatment at the hospital in Merida was $8,000 USD; here in Mexico City, it would have cost $25-$30,000 USD; in the US, $80,000 USD. The quality of health care is excellent: most of the doctors have been trained in the US and Europe, and most public hospitals are teaching hospitals, so these doctors share their time between private practice and the public hospitals.

IM: What can we expect to see in 2009 and beyond?

ET: When the US goes into a recession, Americans who would otherwise go to Europe or other places come to Mexico, so we see more high-income tourists. Banco de México (the Mexican Central Bank) has extensive data on these visitors, and what the numbers show is that in the 1991 recession, the amount of time spent in the country by these visitors remains more or less steady, but money spent per visitor rises 40-50 percent. The past is only so good in predicting the future, but we know Americans are going to continue to come to Mexico.

What the current downturn is telling us is you can’t keep spending 4-5 percent more than you’re earning; we’re going to need a couple of years of belt tightening. But the underlying trends for the market are positive. I think we could see the Mexican market increase to 50,000 units sold per year to foreigners. The limiting factor won’t be demand, but the ability to build the infrastructure required to support that many people coming to live in these areas.

You can learn more about Softec at softecsc.com.

Mazatlán, hidden pearl of the Pacific

catherine — Wed, 11 Feb 2009 18:21:28 -0800

Inside México: What percentage of your clients are Americans? Canadians? Europeans?

Jim Hopkins: It depends on which side of the sales equation. With respect to buying, I would say that the percentage of Americans and Canadians is roughly equal, about 49 percent each. The remaining 2 percent would probably encompass Europeans and local Mexicans. If you are talking about selling, I would say that we are 50-50, North Americans and Mexicans.

IM: Are they buying second homes, or a primary place of residence?

JH: Some come to us looking for a primary home but the majority of our clients are looking for a second or vacation home. Many of these have the long term goal of retiring in Mexico and living here full time at some point in the future.

IM: What price range are they looking in?

JH: The price points seem to break out into three general areas; around $100K USD or under, mid $200's USD and $400 - $500K USD and above.

IM: What kind of amenities are they requesting?

JH: The more money the client has, the more amenities they are looking for. All clients are looking for the most their money can buy but as they spend more, they are looking for pools, ocean views, security, etcetera. Those with less money in their budgets realize that they may have to make some concessions in the area of amenities.

IM: What draws your clients to Mazatlán? What distinguishes the area from other coastal communities in Mexico?

JH: Most of our clients are specifically drawn to Mazatlán because there is shrimp for about $8 USD per kilo here. But seriously, there are several principal reasons: the cost of real estate, as well as the cost of living, in Mazatlán is significantly less than in other Mexican Pacific coast cities andeven some towns in the interior. Mazatlán is a working town, not totally dependent on tourism, so it has a Mexican middle class and culture that is not dependent exclusively on North American influence. It is relatively close to the US border, so it is easy to travel to by car, which many expats want. Mazatlán has the resources these clients are used to as well: state-of-the-art medicalcare and hospital facilities, major retailers (Sam's Club, Home Depot,Wal-Mart, Office Depot), and plenty to do – everything from a professional baseball team, to multiplex cinemas with first-run Hollywood releases in English, to a full-blown cultural season. And finally, Mazatlán has a central historic district. You can step out of a brand new US-style shopping center fresh from buying accessories for your iPod and into the historic district of Old Mazatlán, traveling back about 150 years in history in about ten minutes’ time. Many of our clients have purchased the unique homes in this district,which date from the mid 1800's, and restored them to their impressive status. Theyhave the best of both worlds: the charm of old colonial Mexico combined with the convenience of the modern world.

IM: Do your clients feel like they're moving to aforeign country? Or is there a strong English-speaking presence that makesthem feel more "at home"?

JH: I would say both. Mexico is definitely a foreign country. Its history, language, customs, and culture are all different from the rest of North America. There is, however, an expat community here of 5,000 plus. It isactive, visible, and provides a strong “North American” subculture here forexpats to take advantage of.

IM: Is access to medical care a consideration in their decision to move to Mazatlán? If so, how?

JH: The rise in the cost of living in the US in general is a strong motivator in the decision for people to move to Mexico. Access to medical care is very definitely one of those factors, as is the cost of housing, utilities, taxes,and food. Mazatlán has excellent medical facilities, doctors (the majority of which speak English), and hospitals. That, combined with its proximity to the US, serves to create great security when it comes to medical care issues.

IM: What other major lifestyle considerations do yourc lients take into account when purchasing in Mazatlán?

JH: For the most part, I would say that our clients feel that the more relaxed pace of Mexico in general holds great appeal for them. AlthoughMazatlán moves at a good clip, faster than some other Mexican cities, it still offers a great opportunity to slow down and enjoy daily life.

IM: Has the Mazatlán market been affected bythe real estate turmoil in the US?

JH: Yes, most definitely. Our market is principally a cash one, so whenthere is a tightening of the market and less cash available, the market heretends to slow down.

IM: What is your forecast for home prices in Mazatlánfor the rest of 2009?

JH: I would say that in general, prices will hold. Since property for themost part is owned outright here, there are few mortgages. The generalphilosophy is therefore to wait until the market is able to meet one’s price,since the economic pressures to sell are fewer. However, there are those people who for whatever reason do not wish to wait to sell, and because of this we areseeing bargains pop up with more frequency.

IM: Is there any particular area in Mazatlán that youthink represents a bargain for buyers from the US looking to buy there?

JH: In general, if you are looking for anything other than brand new, youare more likely to find a bargain, regardless of the area of town. At thispoint in time, the most value to be had seems to be in the outer areas of thecentral historic district. Here there are older, smaller homes that arevalue-priced. Clients purchase them, renovate them, and are able to create a comfortablehome with classic old-world Mexican touches.

Jim Hopkins is a principal of Mi Casa Mazatlán, micasamazatlan.com. He can be reached by email at buyandsellrejh@yahoo.com, and at the following phone numbers:

Office in Mexico: 669 985 3351

From US/Canada: 904 236 6757

Cell in Mexico: 044 669 120 9355