Pros And Cons Of Buying A Home In Lake Chapala
Buy or rent? The age old debate. What are the factors to consider about buying a home in a foreign country? Are they any different than buying in your home country? Let's find out.
Make the changes that you want: Personalize your home perfectly to your tastes. If you find a home you like in an area that you love, it is very inexpensive to have improvements made as labor is cheap. Do you want to take out a wall? Add skylights or fireplace? Re-do the kitchen? No problem, and it will cost you less than you think. You can also furnish your home and landscape the gardens just the way you like it, and all on a budget.
Increase value for yourself instead of the landlord : As most minor repairs fall to the tenant to fix, when you own your own home, you are making an investment in it each and every time you make repairs.
Extra filtration, Etc : Want to add extra filtration for the home or make other improvements? They are yours to keep and add value to your investment.
Repairs on your schedule : Whereas you may have to wait to make repairs because you have to go through your landlord, when you own your own home you can schedule the repairs according to your timetable.
Repairs done the way you want vs what the landlord might want to spend : Major improvements or repairs needed on the home you live in? When you are the owner, you can do them the way you want. Opt for seven year roof sealant instead of three. Choose the water heater you want, not necessarily the least expensive. Purchase better paint and have it done right the first time for many years to come. Landlords will often opt for the least expensive fix rather that spending the extra.
Ability to choose location vs taking whatever is available: When house shopping, YOU get to chose where you want to live vs taking anything that is available in the rental market at the time.
Never have to move again! : Unlike renting, where you never really know from one month to the next if you can stay, when you own your own home, you are the boss
Hedge against rent increases: When you own your own property, you know your expenses. You don't need to worry that the landlord will come and jack up the rent outrageously. Remember, there are no rent controls here so landlords can take advantage of renters at their discretion.
Potential source of rental income: If you purchased a larger home or one with a casita, you have the ability to rent and earn extra income. With the huge demand on rentals currently, this is easy.
Avoid paying high rents in a high demand rental market: Due to the overwhelming number of baby boomers and snowbirds, the rental market is under high demand and rents have increased Lakeside.
That was easy! : Purchasing a home in Lake Chapala is relatively simple so long as you have available cash. Cash is wired to your reputable real estate company's bank and a government appointed notary takes care of the rest. Paperwork in Mexico for real estate transactions is minimal compared to the U.S. and Canada.
Investment: Now might be the best time to purchase a home in Lake Chapala. Inventory has shrunk to half historical levels and demand is high (see my other blog on “The State of Real Estate in Lake Chapala"
Large investment: Currently, the median priced home is around 220,000 USD. There are no mortgages in Mexico for foreigners but investors are available to help fund your home up to 50% of the value of the home. All home sales are cash so you need to come up with all the money by closing.
Responsibility: Having your own home in Mexico is fantastic but also ties you down. The responsibility for gardeners, maids, home repairs, etc, all go along with owning a home. When you want to take that bucket list trip around the world for 12 months, arrangements need to be made to care for your home while you are away. Renting your home through a property management company is one option or finding the renter yourself. If you have great staff, you may choose to leave it to them to maintain the home while you are away.
Check carefully before you buy: Good Realtors will always encourage you to get the home inspected before you buy but it is even possible for inspectors can miss things. Work closely with the inspector during the inspection process and check things yourself. A little bit of due diligence goes a long ways.
Potential for loss: There always exists the potential for loss depending on when you want to or have to sell. Not only are you dealing with the real estate market but you are also dealing with currency exchange between the peso and your home country.
No Zoning: There is no zoning in Lake Chapala, therefore the potential exists for any business or farm to move in next door if you purchased near an empty lot. Choose carefully the specific area where you decide to buy.
Maintenance and repairs: This all falls on the homeowner. Fortunately, labor is inexpensive reducing the cost of home maintenance significantly.
Up front and back end costs: The buyer pays between 3-4% in real estate transaction fees and when it comes time to sell you will be paying 7% in real estate fees.
If you thought this article was informative, please share on Facebook or with your friends. If you are still thinking of renting, please see my blog on "Advantages and Disadvantages of Renting".