[surfrider]

I am thinking of purchasing a home in the Ajijic area. I am a retired Realtor and do know my stuff so I have no questions about purchasing and property.

At the current time we are renting a really nice property in San Antonio that is only 550.00 usd and then the gardener and maid and expenses. I was renting a lovely place in San Cristobal de Las Casas in Chapas for 750.00 and that included everything. So actually the Chapas property turned out to be a little
cheaper. (and colder temp.).

However, a bunch of you own homes in Mexico and I am wondering if you would put your money again into property or not?

Also I am wondering how many actually live full time in just one location and live just on your retirement?

I have valued the forums input in the past and I thank you all for your past advise. I do not wish to intrude into your personal lives but I am - if you are willing to share - interested in your thoughts about this. :confused2:

 

[conklinwh]

We rented for about 4 years in San Miguel before we decided that we wanted our own place.
We wanted to be away a little with a fair amount of land so difficult to rent.
We ended up building. The base 2BR/2BA house ran just about $50US/sq.ft. By the time we added walls/fencing, brought in water & electricity, etc. it was really more like $75USD/sq.ft. The interesting thing is that once you have a house, the annual carrying costs are very low.
If I had spent enough time in Mexico to make informed decision and I had the cash available (no mortgage), I would probably build or buy.
Yes, we live full time in Mexico, minus annual friends/family holiday tour and only income is retirement-pension, SS, 401K's.

 

[TundraGreen]

I came to Guadalajara as a Peace Corps volunteer and lived in a rented apt for two years. After about one year, I knew I wanted to stay in Mexico. I was offered a job in Mexico City but it never came to fruition. I decided the world was telling me to stay in Gdl. So when the Peace Corps term ended I bought a house in the same neighborhood where I had been renting, not far from the center of Gdl. Although I have permission on my visa to work, I don't. My only income is a pension from the US. I live full-time in Mexico but travel a bit, so I am typically away for a week or two or three several times a year. I have been very happy with my choice: of Mexico, of Guadalajara, of the neighborhood I am in, and of the house I ended up with. It has been a learning experience dealing with the usual trials of home ownership. I like to do a lot of the work myself, and have become well known at the neighborhood plumbing, hardware and electrical stores. I am also developing a network of workmen that I trust. But these are all things that I enjoy doing and doing them in Spanish is more challenging and hence more fun.

 

[RVGRINGO]

We came to Ajijic and bought, 2 blocks from the plaza. Sold profitably a few years later.
Moved to Chapala (5 miles) and bought larger property, also in centro, in 2004. We've renovated & are still here in our dotage.
Dotage & declining resources & inflation become a problem, eventually, so much of your decision will depend upon your age and resources. We wouldn't do anything differently, but this very large property is now definitely our home & we're probably here forever. However, age and infirmity say, "downsize!" The pets and inertia say, "Stay put".
We have the security of a paid for home with low taxes and upkeep, but we do need the gardener and weekly maid. We're comfortable, but live on minimal SS and one tiny pension, juggling figures for INM and hoping to become 'permanente' to avoid that in the future. Inflation of their requirements could force us out if we don't do that, as others have recognized. We should have done that, or naturalization, many years ago, but they keep changing the rules and frustrating our plans.
So there; that didn't help at all, did it?

 

[FHBOY]

We came to Ajijic and bought, 2 blocks from the plaza. Sold profitably a few years later....So there; that didn't help at all, did it?

Well, not as much as it could, but we love you anyway.

I've read all the rent vs. own stuff here and in other places. We were going to buy, found the perfect house in Ajijic, but so many have convinced us to rent for a few years. If you got cash and can buy mortgage free - then yeah, of course a owned home will be better for your cash flow, but how do you know if the house you buy is the place you want to live and then what if it proves not? The other thing is that home ownership in Mexico does not come with the perks of the USA - tax deductions for interest and taxes - as someone pointed out, rather I keep my investments intact, earning interest, than take it out to buy a potential liability (based on the current housing market).

I have been a home owner most of my 40 years of marriage, and it will be a change to rent - but no argument I have heard has re-changed my mind - not at least for the first couple of years anyway.

 

[m55vette]

We bought, knowing our son loves the area and he and his sister will always have a Mexico retreat. If we didn't have children to pass the home on to we may have been happy long term renting. But we know we always have a place of our own by buying.

 

[RVGRINGO]

Perks of the US system of home ownership? Ha! There won't be any interest in Mexico because you'll pay cash for the house. Taxes? Almost nil. So, none of that applies here.
If the house isn't "the place you want to live....", don't rent it OR buy it. Obvious, no?
Now, our investments are long gone; evaporated mostly, the remainder spent in living these 14 years since retirement (remember inflation). The house is still here, solid, real, ours, secure. If we both drop dead, the maid can have it. We won't need it any more.

 

[sparks]

I rented for five years but bought two adjoining lots after two ... and slowly started building. Finally moved in last October. Exhausted much of my savings which wasn't much but now have no rent and yearly expenses are minimal. A number of projects to go but will be piece-meal. And I have a garden that I can do anything I want with .... love a tropical garden !!

Nobody in my family has an interest in Mexico so they might not even bother to claim it and sell it after I'm gone. Oh well, I'm happy

 

[Detailman]

Perks of the US system of home ownership? Ha! There won't be any interest in Mexico because you'll pay cash for the house. Taxes? Almost nil. So, none of that applies here.
If the house isn't "the place you want to live....", don't rent it OR buy it. Obvious, no?
Now, our investments are long gone; evaporated mostly, the remainder spent in living these 14 years since retirement (remember inflation). The house is still here, solid, real, ours, secure. If we both drop dead, the maid can have it. We won't need it any more.

RVGringo,

I could give you a "like" too for your post but there is one part I do not like.

It is the fact that your investments are long gone.

When our older generation that worked so hard, contributed highly to the system, paid taxes, pension contributions, etc. have to spend all their investments during their retirement years simply to live a good, simple life (and that in a country that is very inexpensive to live in) and yet not have it last to life's end then I feel something is wrong with the system.

Some of those investments should last to life's end so that they can be passed on (perhaps in your case that is not important) to offspring etc. as was common in past generations or at least to give you additional security for whatever might happen throughout rest of a person's life.

Now, according to numerous posts on this site it is almost impossible to retire comfortably in Canada or the US unless one has sizeable investments. Without those they are faced with a retirement that will lack quality and security, if they remain in their home country. How sad!

The only good news is that it forces many to look to places like Mexico to retire and hopefully find happiness in the more relaxed and simpler lifestyle that will not rob them of them of the little extras that make life more pleasant.

All the best to you RVGriingo as you keep marching along! You are a trooper!

And all the best to others on this forum that are planning and working towards making the move that will enable you to live a more pleasant life.

 

[RVGRINGO]

Sparks and I share a very similar attitude. What little family we have, have never visited or shown any interest; even though they could use the money, but they won't even bother to come down. So ........ they get 'nada'.

 

[Detailman]

Sparks and I share a very similar attitude. What little family we have, have never visited or shown any interest; even though they could use the money, but they won't even bother to come down. So ........ they get 'nada'.

In a situation like yours I totally agree as my will is similar for associated reasons.

 

[FHBOY]

Maybe it is just because I am a young 62 that I haven't developed the cynical attitude towards my family I have seen here. Look, I don't know your situation and I am not being judgmental - we all have our reasons and if they make sense to us, that is all that matters. But, like my grandfather and my father, I do want to leave a legacy of some sort to my sons. With the economy the way it is, that may be a challenge. And another maybe: maybe when we move there they too won't visit and I'll change my mind, But for now, I feel very lucky that our family relationship is as tight as it is.

:focus:

So, I'm getting a very mixed message here - I agree that when you own something it is a good thing, unless it loses value. And to partially or totally liquidate an investment in a house is still a bit too risky to me. I do not want to end up worrying in my last years that I may not have the cash flow to live. So I will rent...

As to RV's comment (to which I am sorry I do take umbridge): "If the house isn't "the place you want to live....", don't rent it OR buy it. Obvious, no?" sounded most condescending and I'm sure that is not what he meant to convey.

I am looking forward to meeting RV face-to-face in a couple of weeks. And like I have said before, I am glad that we can be civil even in this type of discourse.

 

[TundraGreen]

Sparks and I share a very similar attitude. What little family we have, have never visited or shown any interest; even though they could use the money, but they won't even bother to come down. So ........ they get 'nada'.

Every family is different and people have different reasons for what they do. I have two kids. In the five years I have lived in Mexico, my daughter has been here twice for weeks at a time. My son came for three days for the first time a few months ago. But I don't hold it against him, nor take it personally. It is just a difference between the two kids. One likes to travel and does so. The other doesn't travel anywhere very much and feels impediments in his life that prevent him from traveling much. I feel close to both of them even though my interaction with the two of them is very different. I have a Mexican will that leaves the house equally to both of them, but with the distance and lack of spanish, it is not obvious to me that either will go to the trouble of selling it. Maybe, with inertia it will just be abandoned. There seem to be a few of those around. There is a large house a couple of doors down from me that appears abandoned. There is no electrical supply and no one ever goes in or out, although advertisements taped to the door do disappear. I don't know what goes on with it. I should ask my neighbors I guess.

 

[mickisue1]

I don't know the situations that any of you came from, or are coming from.

But for me, the opportunity to buy a home for under $150K, that will cost less than 10% of what it costs to maintain my current home--power, water, property taxes, insurance, etc, and know that it's there for my kids in the future is huge.

Who knows what the future will bring for rental costs? For the value of property? I remember, 12 years ago when we were building our current home, a financial advisor telling us that it's good to have a mortgage when your income is earned, and good not have one, when it's from investments or pensions/SS.

With a few modifications--I'd not be tempted, ever, to mortgage greater than 80% of the value of a home in the US, with the wide swings we've seen in value--I think that's still good advice.

When we move, we'll probably rent for a bit. But the goal will be to own a home. Nothing fancy, probably NOT in a ****** enclave, but on the economy, so we can feel as though we really do live in a foreign country. With, of course, at least two extra bedrooms.

Most of the time, they'll be utterly useless. When the kids, and eventual grandkids, come to visit, they'll be priceless.

 

[Detailman]

Maybe it is just because I am a young 62 that I haven't developed the cynical attitude towards my family I have seen here. Look, I don't know your situation and I am not being judgmental - we all have our reasons and if they make sense to us, that is all that matters. But, like my grandfather and my father, I do want to leave a legacy of some sort to my sons. With the economy the way it is, that may be a challenge. And another maybe: maybe when we move there they too won't visit and I'll change my mind, But for now, I feel very lucky that our family relationship is as tight as it is.

:focus:

So, I'm getting a very mixed message here - I agree that when you own something it is a good thing, unless it loses value. And to partially or totally liquidate an investment in a house is still a bit too risky to me. I do not want to end up worrying in my last years that I may not have the cash flow to live. So I will rent...

As to RV's comment (to which I am sorry I do take umbridge): "If the house isn't "the place you want to live....", don't rent it OR buy it. Obvious, no?" sounded most condescending and I'm sure that is not what he meant to convey.

I am looking forward to meeting RV face-to-face in a couple of weeks. And like I have said before, I am glad that we can be civil even in this type of discourse.

As you will see from a careful reading of my post I too believe that there should be an inheritance to be able to pass along. My comment is that with the current scenarios in some countries there will be little to pass along, EXCEPT if the person has sizeable assets.

Too many today, if they stayed in the US or Canada, would not have a "pot to pee in" to leave to their descendants. So they are "forced" to consider relocating to somewhere else like Mexico. Staying in their home country is not a viable option if they want to have any meaningful retirement, let alone an inheritance.

I don't think Sparks and RVGringo are being cynical. That just happens to be their situation and circumstances apparently lead them to make certain decisions. I agree with that. It is their choice and I do not find any fault with it.

As for myself my current decision is to leave my inheritance to relatives (have no children). I simply will not leave anything to some because of the lack of closeness and attitude problems. Those that have manifest interest and maintained family closeness will benefit. Simple and straight forward.

On a different matter I too agree that there is a big difference between buying and renting. My observations to date indicate that after buying in Ajijic or adjacent areas, if you find that you made a mistake and don't want to live there, you will find that it takes considerable time to unload the property unless you want to discount it considerably. Some people have their homes for sale for a LONG time.

If you rent and make a mistake it is much easier to correct the mistake. You simply move to another place. You can keep that up until you find the area that is right and then look for a home to buy in that area. It is true that you might have to live out the remainder of the rental lease term. Big deal. You lose nothing moneywise! You just have to put up with the situation for additional months until the lease expires. In the worst case scenario you could pay out the lease term and walk away completely free. That cost wouldn't even come close to possible losses in owning a home that you want to dispose of. It would probably be less than the sales commission on a house.

So unless we have runaway inflation - rent first before buying. That is rule #1 according to the majority of expats. Rule #2 - Don't get carried away by emotion and forget Rule #1.

 

[FHBOY]

As you will see from a careful reading of my post I too believe that there should be an inheritance to be able to pass along. ...So unless we have runaway inflation - rent first before buying. That is rule #1 according to the majority of expats. Rule #2 - Don't get carried away by emotion and forget Rule #1.

With your first point we are in full agreement. The amount of cash flow I can expect for the next 25 years would not be enough and eventually anything that has been saved up "for the future" (the corpus) would be gone if we stay in the USA, assuming there was some place in the USA we wanted to retire to (and there isn't any place we have found for that).

As to the buy/rent thing - I'll stick with our decision at this point. It has nothing to do with our resolve to retire in Mexico and to live in Lakeside, that has already been decided, it is just a question of where. I have a house to sell here in the US, I know it is an uphill battle to get what I want/need out of it, so I don't want to put us in a similar situation in Mexico. That could change, but meanwhile why risk it?

You know, you can choose your friends, you can't choose your family and all of them are different. Do I know if my sons and their wives and kids will visit us a lot in Mexico? Of course not - like us they have lives of their own. Fortunately with the internet, careful budgeting and the like, I do not expect to lose touch - and affection. When my son gets married later this year, we expect to be back in the USA for their first kid in about two years - now if we lived in Tuscon, or LA or moved to (God forbid) God's Waiting Room: Florida, we'd have to worry more about having the money to make the flights, hotels, etc. With a lower COL in Mexico, that seems to be a more attainable goal by living simply.

Now...what was this thread all about again? Oh yeah, own or rent? Good night all.

 

[Detailman]

With your first point we are in full agreement. The amount of cash flow I can expect for the next 25 years would not be enough and eventually anything that has been saved up "for the future" (the corpus) would be gone if we stay in the USA, assuming there was some place in the USA we wanted to retire to (and there isn't any place we have found for that).

My spreadsheets show me the same thing for Canada over a 25 year period. If inflation increases agressively, which I feel it will, or there are large unforseen occurrences (which according to Murphy's law - will happen) my resources will be depleted.

A move to Mexico, on the other hand, show that I should be able to live on my pensions (gov't - as I have no company pensions) and investment income without ever touching the principal. Big difference! That is why so many consider moves to places like Mexico. The benefits, other than financial, are another story altogether. And I agree that if you are moving for financial reasons alone you might not make the transition to Mexican life.

Have a good sleep tonight FHBoy.

 

[terrybahena]

I guess we are very lucky. We fell in love with the house we are moving to in Mexico and we able to buy it for cash. We own our house in Ca (no mortgage) and so for us the right move is to rent it out. Our luck continues as we are renting to a close and trusted retired couple, and we will (should) be able to live on the rental income and pay prop txs & ins for the Ca house.
I'm not old enough for SS yet (55) and don't know if it will be around when I get there, and mi esposo is Mexican and so doesn't get SS, so I don't know if there will be anything left to leave my kids...except for the 2 houses I guess. But one daughter is excited to come and the other, at this point will see us when we come back to visit.
But like my parents (both deceased), I want to enjoy my life, I know we can live simply in Mexico, but I also want to keep traveling, and if anything is left, of course they can have it, but my kids are smart and able, and I expect them to take care of themselves, same as us. Maybe that sounds cold, but we earned ours and they can earns theirs...
my 2 cents...oh so I guess my opinion on rent vs buy is: follow your heart!

 

[makaloco]

Wow, not sure where to begin. First, I've always considered renting to be throwing money away with no hope of recovery. IMO, the ability to cut and run is the only strong argument in favor of it, and only if you can afford it. I broke "Rule #1" and bought a house on my second visit, though I'd already been an expat for 28 years and wasn't worried about adapting. Also, I retired early on a shoestring, and no way could I have spent even a few months bouncing around trying to decide where I wanted to live. If I'd done that, I wouldn't have had enough left to buy a home when I did make a decision.

The idea that renting preserves your other investments seems to work only if those investments earn more than you're paying in rent. Maybe that's the case for some, but it was never going to happen for me even before the crash, so I used part of my retirement savings to buy and remodel my home. Now five years into retirement, I'd do things the same way. I don't have much, but with a paid-for house, paid-for car, and zero debt, I feel a lot better off than many folks.

I'm not sure why people think they'll need their money more later than they do now. I figure I'll need *less* as I age. Already at 65 I care little about "stuff" and activities that cost money, and at life's end, I doubt I'll be doing much beyond eating and sleeping. What I have left in retirement funds is unlikely to last long even in Mexico, but that was a risk well worth taking for the joy of retiring early. Retirement savings are, after all, for retirement. If the money runs out, I can limp to the US, and throw myself on the mercy of the social services I've paid for during 45 years or so of working. I have no desire to live there, but the older I get, the less strongly I'll probably feel about that, too.

I'm not particularly worried about selling my house if it comes to that. I don't see how a house can be a liability, unless it's the type that can only be sold to other foreigners. In my area, the mainstream real estate market for Mexicans seems to be pretty stable.

I have no kids, and my siblings are near my age. My hope when the time comes is to move on to that big sandy beach in the sky with a minimum of fuss and expense, so as not to inconvenience anybody. If I do end up inconveniencing somebody, that person will get whatever is left.

 

[Mainecoons]

We bought 5 years ago but if we had to do it over, would probably rent now. Five years ago, the selection of rentals in the area we wanted to live in was very poor. And we hadn't been torpedoed on many of our investments. The other factor is that we paid top dollar and the property could not be sold now for what we have in it.

Having said that, we love the house and location dearly as the best we've ever lived in and our last place was in a primo area and was a top echelon property. So from the standpoint of satisfaction with the purchase, we are fully satisfied.

We have a number of friends who rent. One has moved twice in less than a year. At my age, this would be a real downer. It is ours and we don't have to go anywhere. So keep that factor in mind when making this decision. You could find a great rental and get fully settled in only to be told the owner has decided to sell it and you have to move. This is what has happened to our friends who are moving again. They now have a supposedly long term rental a couple blocks from us, we hope it works for them.

Purchase prices of the less desirable properties/locations are falling. Where we live, the sold signs are still going up, albeit at a slower pace and with some drop in price. If I wanted to buy now, I'd try to find three or four places I really liked and make very agressive offers on them one at a time until someone bites.