Finding a new home in Mexico

Find out whether you would be better to rent or to buy a home, how to go about it and where you might want to settle. 

One distinct feature of Mexico’s culture is that property ownership, and the drive to buy one’s own home, is not a feature of life for the vast majority of Mexicans.

In fact, most Mexicans rent rather than buy property, meaning that there is always a plentiful supply of rental housing available. Property ranges from purpose-built apartments and new houses to conversions of colonial buildings.

If you are considering a move to Mexico, you may well decide that renting is by far the best and cheapest option for you too, and there are some things you should be aware of.

Renting

Processes for renting property are similar to those observed in the U.K. or U.S., with up-front deposits, references and proof of employment all being required.Processes for renting property are similar to those observed in the U.K. or U.S., with up-front deposits, references and proof of employment all being required.

Some landlords will require expats to provide a fiador (guarantor), who must be:

• A native Mexican.
• Living in the same city as that in which the rental property is located.
• A property owner in their own right. Rentals obtained through letting agents will usually bypass this requirement, as credit and other background checks will be undertaken on behalf of the landlord by the agent.

Properties are available as both furnished and unfurnished, but it should be noted that unfurnished properties are not usually supplied with white goods (including an oven) and may not even have kitchen cabinets. The additional costs associated with fully furnishing an unfurnished home should be kept in mind during the process of selecting an appropriate new rental property.

As with business dealings in Mexico, residential rentals are often secured informally through word-of-mouth, and many landlords advertise their available accommodation in local newspapers and shops. The informal way of conducting rental arrangements can leave expats in insecure tenancies, so it is important that:

• A contract is obtained prior to handing over money.
• The contract is checked by a lawyer to ensure its fairness.
• The contract is translated (if required).
• A full inventory is supplied and agreed prior to taking up residence.

It should be noted that in the event of a dispute, the original Spanish-language version of the contract will be the only one deemed legal, so clearly understanding the specific terms, conditions and obligations on both the part of the landlord and the tenant is vitally important.

Unlike the U.K. or U.S., rental prices in Mexico are usually negotiable, particularly for accommodation secured informally. It is always worth asking the question, and a monthly reduction of around US$100 is common in less buoyant rental markets (which tend to be located outside the main urban areas).

Adding to this, price-to-rent ratios — which divide the average cost of ownership by estimated rental cost — for properties both inside and outside of Mexican city centres decreased between mid-2019 and mid-2020. Ratios for outside city centres data saw a decrease of almost 8%, according to our 2020 Global Housing Market Trends report. These changes indicate that buying could be a better option than renting, in the current market.

Once a tenant has taken up residence, it is usual for them to be responsible for all minor upkeep of the property — plumbing, painting/decorating and gardening. And, as international standards dictate, tenants will also usually be responsible for all utilities.

It is very unusual for rental homes in Mexico to be supplied with a landline connection, as telephone calls (especially international ones) are notoriously expensive. If tenants want a line put in, they should organise that themselves, and they will be responsible for all associated costs. When leaving a property for which a landline connection has been supplied, the tenant should ensure either its sale to the next tenant or disconnection or transfer to a new address prior to vacating the property. 

Owning your own home

Buying property in most areas of Mexico is relatively straightforward, provided that purchasers follow the legal stipulations laid down by the Mexican government and that you follow some basic common sense rules.

Buyers should consider employing the services of a lawyer when attempting to purchase property in Mexico – they will check the legality of all documentation and will almost certainly have contacts in local banks that may save the purchaser money on fees and other associated costs. The lawyer’s licence to practise — cédula professional — should always be checked prior to the engagement of services.

Buyers should build a relationship of trust with their lawyer in order to benefit from their local contacts, knowledge and expertise. This will be particularly helpful when arranging the transfer of large sums of money into the country in order to complete the purchase.

Any purchase must be ratified by a public notary who, while not representing either the buyer or vendor, will ensure that the property purchase has been conducted in a manner that meets all the specific criteria required by law.

Non-Mexican purchasers are expected to pay cash for property transactions and, although mortgages are becoming increasingly available, the interest rates offered by lenders are not favourable compared to those in the U.K. or U.S.

It’s also worth considering whether or not to buy title insurance, which protects the buyer against charges or other debts associated with a title deed prior to purchase.

While the Mexican Constitution specifically prohibits the direct ownership of property and land in restricted zones — areas within 100 kilometres of any national border and within 50 kilometres of any coastline — by non-Mexican nationals, there is nevertheless a way in which expats can (indirectly) buy property in these areas of Mexico. The process involves establishing what is effectively a “property trust” (fideicomiso), which will own the property on behalf of an individual, under the trusteeship of a Mexican bank. 

Whether you choose to rent or buy, finding a new home is an exciting but often complicated process. Organising funds, shifting possessions, protecting your assets… there’s a lot to consider. Sorting your health care cover doesn’t need to add to the headache. Our expert sales consultants are on hand to help.

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