People gasp when they see the view from our glass walled living room here in Ensenada, Baja California. To the West are the Todos Santos Islands, one of the World's most challenging surfing spots. Directly below is the whitewater of San Miguel beach, one of the Pacific Coast's most popular places for mere mortal surfers. Look south to the mountains of Punta Banda peninsula and it's majestic point. They guard Todos Santos Bay. Eastward is more whitewater, the harbor of Ensenada and more mountains that ring the city. The home itself is a comfortable 2,500 square foot contemporary built in the style of Luis Baregon and Ricardo Legorreta, two of Mexico's world-
renowned architects. On the Southern California coastline, a comparable house and view would cost $2,000,000 or more. Here in Mexico, we bought the land and built the house – including a completely self-sufficient solar electric system -- for less that $300,000.
If you have the stomach and stamina for it, building is the best way to go. For some reason unbeknownst to us, a completed house on the market is $100,000 to $200,000 more than if you had it built. Even so, you can find comfortable homes with ocean views for as little as $150,000. Its obvious real estate prices are a prime attraction here where the climate and the scenery are some of the best in the world.
The living in Ensenada is good. And cheap.
The City, who issued and signed off on our building permit, has not caught up on its paperwork, we suspect. We believe we’re paying property taxes only on the land we purchased for $93,000. In any event, this January we paid $16.00. Last year we let the deadline slip by (they don’t send out bills, you just have to remember to pay). We had to shell out for a fine as well: $18.00 total. We had expected to pay about $150.00 per year.
At least once a week, we enjoy a leisurely lunch out for $27.00 or less for the two of us. Dinner with a bottle of wine in one of the city’s finest restaurants rarely exceeds $60.00. It’s possible, though, to eat well for far less. Superb fish or beef tacos (two each plus two soft drinks) cost less than $5.00.
The major grocery chains in Mexico now resemble their US counterparts – except for prices. For example, Soriana, Commercial Mexicana and Calimax supermarkets sell choice beef for less than $3.00 per pound. Catch of the day at the dockside fish market (including lobster, oysters, clams, red snapper and sole) are equally cheap.
Many expats use the Mexican healthcare insurance (about $240.00 a year) as catastrophic insurance, then self-insure themselves for routine care by paying out of pocket. Office visits with a doctor – even specialists – cost $25.00. Unless you have extraordinary health issues, you can budget $70.00 per month for perfectly fine healthcare.
Many name brand prescription drugs are readily available in Mexico without a prescription, and they cost far less. For example, you pay about $80.00 for a month’s supply of Advair in the U.S. Here it costs $35.00
All of the above are reasons why more US citizens live in Mexico than in any other country. Northern Baja, due to its proximity to the U.S., makes it particularly popular, but you’ll find plenty of U.S. ex-pats throughout the country. 3 hours from Ensenada is San Felipe on the Sea of Cortez. Beautiful San Miguel de Allende is in Mexico’s highlands. To the South are Mazatlan, Cuernavaca, Puerto Vallarta, Oaxaca, Cancun, La Paz and the Costa Maya to name a few. You’ll find a wealth of information about them on the Internet before your first inspection tour.
Once you’ve decided where in Mexico you want to live, how do you start the buying and building process? More endless hours on the Internet. There are no multiple listing services in Mexico and not all realtors like to share their listings with others. You must do a lot of digging to discover what is actually on the market.
But then, can you actually own coastal property in Mexico? The answer is: in essence, yes. The Mexican constitution forbids foreigners from owning land within 50 kilometers (about 31 miles) of the beach. But, in 1973, the Mexican government saw the benefits of foreign investment on their expansive coastlines. Changing the constitution, however, was nearly impossible. And so they established the “fideicomiso”, or bank trust. The trust, a Mexican entity, owns the property outright. Yet you, the foreigner, have complete control of the trust. It’s been a proven, reliable system since it’s inception. You need an FM-3 (permanent visitor visa) to qualify.
There are, however, other things you need to be cautious about: realtors, for instance. There’s no such thing as a licensed one here. There are, however, many freelancers with varying levels of competence. Major U.S. brokerages such as Coldwell Banker, Re-Max, Century 21, etc. have offices throughout the country and are good places to start, but you still need to carefully scrutinize the individual’s background and experience. Due diligence is up to you and no one else. You must verify road access and available utilities for example. First American Title and Stewart Title and Guarantee Company offer title insurance. Make sure they have checked ownership on a property before you put money down.
Beware Ejido land. Post Revolution reform gave land to local Indian tribes These Ejido territories are similar to U.S. Indian reservations. You’ll find plenty of Ejido land for sale or for lease. Sellers all insist they have clear title, but it’s best you walk away. At the very least, make sure a title company, after a thorough search, is still willing to guarantee title and back you up in court. Buying or building a home on leased land is dangerous, though many ex-pats have done so. A few, unfortunately, have lost what they thought was to be their permanent retirement home.
Mexican real estate transactions do not go through escrow, so you need to find a qualified lawyer who speaks English. Whatever you do, do not use the seller’s attorney. He or she prepares all the documents, gets signatures all around and submits them to a “Notario”. Unlike U.S. notaries, a Mexican notary public is a senior lawyer carefully qualified by the federal government. He searches and verifies the title, and registers your deed with the land registry office. Then it goes to a qualified bank to form the “Fideicomiso.” Total cost to the buyer is less than typical closing costs In the U.S.
Many real estate developments offer design and build services, which relieve much of the stress. But if you are brave enough to buy an independent lot, you’ll need to carefully search for a reliable contractor. The Internet, personal interviews, and inspections of his completed work are in order. Construction contracts in Mexico are different, with the contractor expecting 30% to 50% up front. Be sure to insist on a performance contract. Once ground is broken, expect the usual delays and frustrations you’d experience in the U.S. No better; no worse.
Bear in mind that Mexican architects are licensed by each city. They’re not only the designer and civil engineer, but the building inspector for the city as well. His or her license is on the line when signing off on a project, so you are reasonably sure it conforms to local building codes.
Somewhere during the process you’ll think you made a terrible mistake. But once it’s completed, you’ll know you made the right choice.
Mexico is more than a beautiful and charming place to live. It’s an alternative lifestyle that does wonders for your retirement budget. Last fall we spent 3 weeks in Italy. This spring we’re off to Beijing and Shanghai. Next fall it’s Oaxaca and Southern Mexico or perhaps Buenos Aires.
If we still lived in the U.S we couldn’t afford it.
GETTING STARTED
Google and Yahoo are perfect places to start. Simply try “Ensenada Real Estate” or “Mazatlan Real Estate”, etc. Here are a few websites you’ll find helpful for more information.
www.enjoyensenada.com
IN COMFORT – IN AFFORDABLE MEXICO
