I went on a “buying tour” yesterday to Baja Mexico. We first stopped at the new Trump towers in Tijuana where they hadn’t yet broken ground. They were selling condos for around $700-$800 per sq ft. But they were on the coast with pretty ok views. The only problem was they were too close to TJ, which if you’ve been there you know, sucks.
The tour was operated by Beach Front Baja and I was impressed with the knowledge of the tour-guide, who was actually VP for the company. They make sure that they only recommended properties with clear title and developments that passed USA construction guidelines, not the weaker Mexican standards. (One of them being the installation of sprinklers and fire-retardant materials in high-rises).
Formerly foreigners couldn’t buy land within 100km of the border and 50km of the coast but the law does allow them to hold property on lease from a Mexican bank trust, which is similar to a land trust. So foreigners are buying up land and houses using this loophole, which costs under about $600/year to maintain.
Then went down to Porto Nuevo (or New Port Beach). We stopped by another new condo pre-construction development called “The Falls”. Substantially better views, only $200 sq ft. Even though the builder was local, he was pretty well-known, having been a prolific builder in Mazatlan and Cabo San Lucas. Unlike most builders who have a reputation for only building 80% of the work, he guarantees that the work won’t be delayed more than 3 months else you chose to get your deposit back with interest.
Since you’re paying 30% deposits on properties in Mexico, thats a pretty substantial investment. Unlike the USA, you can only get 70% financing so you’ll need somewhat deep pockets to buy down here.
Then we went down to “Las Ventanas”, a project of 38 single family residences right on the beach. Very high end custom homes, with lovely mosaic designs, top-of-the line fixtures and fancy ornamental fittings with patios that open right onto the beach. Really nice houses that you’d expect to see in New Port Beach, Orange County, not in Mexico! They were pretty pricey at $1.1 million but with a similar house costing $15 million in Del Mar, it might even be considered a steal at those prices.
In Mexico, you pay 2% transfer tax on the sale of a property, but the annual property tax is so low its a joke. Unlike the USA, its only a few hundred dollars. I’m guessing its probably based off the sq footage of the lot or constructed house and independent of the value of the house.
We also had lunch in the patio of one of the those homes and a lot of margaritas too!
After that we went to Ensenada and just east of there is Mexican Wine Country. 90% of Mexican’s wine is grown in that area. However, Mexico’s national wine consumption is less than San Diego’s so thats not saying much! Anyway we saw a vinyard, tasted some wine and then we called it a day.
An interesting fact I found out is that in Mexico, you pay your electricity bill at the local grocery store!
On the whole it was an enjoyable trip. I was pretty amazed by the amount of construction going on along the coast and impressed by the quality of some projects too.
I may not be buying anything in Mexico but it was definitely an interesting experience.