Interview with Jennifer Swartz: Expatriot in Mazatlan

Jennifer Swartz is a young developer who moved to Mazatlan with her husband to escape the rat race. She has since started her own business, MazPC, and manages the Mexcape.net blog, which chronicles her adventures in Mazatlan.

Hola Jennifer! Thanks for talking with us. First off, of all the places in
Mexico, why Mazatlan?

We didn’t really choose Mazatlan. It chose us. We came down here on an exploratory trip in the Summer of 2006. We were only here two days before we knew we were going to move here. And we did, 8 short months later.

Of course, we did a lot of research on several areas in Mexico before we came down on our exploratory trip, and Mazatlan was at the top of our list.

Being near water was very important to us, so that narrowed down our options considerably. We are not retired, and I depend on the internet to do my work, so a place with several choices for reliable high-speed internet access was extremely important.

Mazatlan charmed us from the beginning. It is a resort city and tourist destination, but it also has a working port and is the shrimp capitol of the world, processing more than 40,000 tons of shrimp every year. Which means it’s a real city, not just a tourist town. Downtown is full of beautiful colonial buildings and homes. People gather in the evenings at the Plazuela Machado, one of the main squares in the city, to enjoy fine dining and wonderful music. There is a large cultural base here. We have ballet, opera, symphony, dance, and theater all at the beautifully restored Angela Peralta theater. Mazatlan is a very well rounded city that everything to offer.

As a bonus, there is a fairly large expatriate community here. Our American and Canadian friends really helped us get settled and adjusted to our new home. The help was invaluable.

What are your observations of the real estate market in Mazatlan? Do you see
any signs that would suggest future growth?

Real Estate here is booming. The number of real estate agencies here grows seemingly every day to service the increasing number of people looking for homes. Up north, in Nuevo Mazatlan, There are many new condominium projects. Right now, the biggest demand seems to be for the bargain fixer-uppers and the higher end properties. There is not quite as much movement in the middle ground properties, but they are still selling.

Can you talk about your impressions on the quality of the infrastructure in
Mazatlan: e.g. water quality, hospitals, reliability of electricity,
internet speed and availability etc.?

Infrastructure was one of our primary concerns when choosing a place to live, and Mazatlan’s infrastructure is more modern and stable than many places in Mexico.

The health care here is top notch and affordable. Living here, we have access to very accomplished doctors of every specialty. The hospitals are modern with advanced equipment.

Shortly after we moved here, I had an emergency appendectomy. My surgeon was a specialist. I was in a private room in a private hospital for three days. The nursing care was competent and empathetic. For meals, a lovely woman came to my room and asked me what I wanted to eat, and then went to the kitchen and cooked it from scratch. I was very well cared for. It’s been less than a year, and I really don’t have any scar to speak of. The best part is everything cost me only about $2700 US.

There are three choices for high speed internet, and a fourth provider is entering the market. The cable and dsl providers offer packages that include other things like tv and phone. You can get connection speeds up to 4 megabytes. We have chosen a fixed point wireless provider with whom we are very happy. A one megabyte connection costs us about $48 US per month.

Water is one of those things that scares people, but really, in Mazatlan, the quality of our water is pretty good, comparatively. I know an expatriate who does not buy bottled water. He uses the water out of the tap for everything, including drinking, and he has not gotten sick yet.

I am not quite that brave. I do use the tap water for many things, including cooking and brushing my teeth, but when it comes to drinking water, we use bottled water for ourselves and our dogs.

You can buy purified water in 5 gallon plastic bottles. If you get your water from the truck that delivers, it’s about $1.80 US. We choose to buy our water from our favorite water purification plant, and that costs us about $.70 per bottle.

One problem we are having is the growth of the city is out pacing the current water and sewage facilities. It is very important for a home to have a cistern and a tinaco, because you may be without city water for days. At this time of year, just before rainy season, our water sources are pretty depleted. This also means that the water you do get is a lot cruddier and you need to change your filter more often.

In some areas of town, especially up north where all of the condos are going in, the sewage system is inadequate. There have been some stinky messes. And there is a flooding problem when it rains.

Electricity is more reliable here than it was back in Fort Worth. Of course, we lose power occasionally during rainy season when a big storm blows through, but service is usually restored very quickly. One thing to be aware of is that most houses do not have grounded electricity, and since there are no electrical codes here, wiring tends to be of the “make it work” variety.

Telephone service can be very expensive. Having just a basic telephone line will cost you about $50 a month, and then you only get a limited number of calls before you start having to pay for each call. You will also pay a pretty large fee for calling a cell phone. Because of this, we have elected not to have a local telephone line. We use cell phones and our Vonage number exclusively. Many of the expatriates here have Vonage service, so we often use those lines to communicate. Plus, Vonage allows us to talk to the US for free, and our families can call us for no charge as well.

Was there anything that you discovered about life in Mazatlan that you
were not expecting?

Living in Mazatlan is all about discovering surprises daily. Mazatlecans have an exuberance for life that is contagious, and it is impossible for me to leave my house without smiling. It’s a joy to just be a part of the city.

The differences between here and the US are many. I think because of the proximity – we share a border – it’s easy to think of Mexico as an extension of the US that speaks Spanish, and that can really trip you up.

One of the biggest surprises and hurdles for me was the very elastic relationship with time most people here seem to have. As an example, if you hire a contractor to do work on your home, they may show up to do the work a few days or a few weeks late. I spent the first few months here is a near constant state of annoyance. But then I realized that I can just go about my life. If I am not here when someone shows up, they will not be annoyed. They will just come back later.

Another surprise was the number of expatriates living here that don’t speak any Spanish. I don’t recommend that, because you will miss out on a lot. But it is very possible to live here happily and well and speak only English.

The cost of labor here is ridiculously low. If you want to restore, renovate, or build a home, your largest expense will be materials. The average construction worker makes $9 a day. That also makes it cost effective to have things like your DVD player or camera repaired when they malfunction, rather than replacing them. Just about anyone can afford a maid and a gardener. Having your clothes custom tailored costs about the same as buying off the rack in the US.

I was expecting a lot of the products I was accustomed to buying to be unavailable, but there are a lot of American retail and restaurant chains here. You can shop at Office Depot, Office Max, Home Depot, Walmart, and Sam’s Club. There is also Dairy Queen, Subway, Burger King, McDonald’s, Dominoes, and Applebee’s. Most products you are used to buying in the US are available here.

What would you advise people who move to Mexico to watch out for?

Don’t leave your brain at the border. It’s amazing the number of people who do crazy and impulsive things in Mexico that they would never do at home. This city is enchanting and it can cause some people to make some very rash decisions.

I have seen people come to Mazatlan for the first time for a weekend getaway and end up buying a house. Some of them are very happy, and some of them have lost a great deal of money.

There is land, called ejido land, that cannot be legally sold. It doesn’t matter if you have a bill of sale or a deed, the land will never belong to you. Also, since Mazatlan is located entirely within the restricted zone, you will require a bank trust called a fideicomiso in order to purchase property. There have also been problems with condos that were never built. I highly recommend a qualified real estate agent to guide you through the home buying process.

The other thing to watch out for is theft. It’s easy to forget while you are strolling along the beautiful malecon or competing for parking with some very expensive cars that Mazatlan has a very real poverty problem. All the iron work you see on houses is not for decoration. Take sensible precautions with your home. Always use your locks. Don’t let strangers inside. Don’t leave expensive items in plain view.

You need to take precautions in public as well. Don’t go to Senor Frog’s, drink a gallon margarita, dance on the table, and be surprised to find your purse missing. Also, don’t leave your expensive digital camera and wallet with your towel on the beach and go play in the ocean. The same rules that apply to your behavior in the US should govern you in Mexico.

How difficult was the process of finding a home and purchasing it?

We have not yet purchased a home. When we moved to Mazatlan, our only experience with the city was the month vacation the previous August. We knew that was not enough experience to choose a part of the city or a neighborhood where we wanted to make a long term financial commitment, although it was evidently enough experience to pick up our entire lives, quit our jobs, and move here.

Mazatlan differs a lot neighborhood to neighborhood, and sometimes even street to street. I think it is a good idea to rent for awhile in the area you are considering before making a commitment. If you can’t rent first, visit the area frequently and spend time there at all hours of the day and night. You never know when you might have a neighbor who keeps roosters, or the house you are looking at may be the favorite soccer location for the local kids.

Finding a home is pretty easy for most people. There are homes available in a wide rage of prices in every part of the city. There are condominiums, apartments, duplexes, and single family homes. I know a guy who purchased a home for $15,000, put $20,000 in improvements into it, and ended up with a very lovely home. A nice home in one of the gated communities will go for $250,000 – $400,000. You can buy a gorgeous home high on Icebox Hill with amazing views of the ocean and the city in the $400,00 – $500,000 range. Or, you can go up into the millions. There is something for everyone here.

The most important thing when looking for a home is to engage the services of a qualified real estate professional, preferably one who has been doing business in the area for many years. The purchase process is very different than what most of us are used to.

If I had one day to experience Mazatlan, what would you suggest I do or see?

There is so much to do and see here, that it is tempting to give you a list of activities and sights that would pack your day. But really, if you only have one day, you should take it easy and experience life here the way it really is.

Spend a few hours strolling the malecon (the beach walk). Enjoy all of the sculptures and monuments along the way. Go down to one of the little beach restaurants. They will drag a table and chairs and umbrella out onto the sand for you, near the water. Have a wonderful lunch of ceviche while drawing pictures in the sand with your toes. Have an ice cold Pacifico.

In the afternoon, go to the central mercado and meander the aisles. Pick up a couple of fresh mangos and amazing tomatoes. Maybe buy a hand made leather bag or belt. If you are not too tired, climb the lighthouse hill and enjoy the absolute best view in Mazatlan.

In the evening, go to the Plazuela Machado. There are many really good restaurants to choose from. Sit outside on the sidewalk and leisurely enjoy your meal while watching the couples and families stroll by. Odds are very good that there will be a few musicians about to serenade you. Or, after dinner, you can go to Pedro y Lola’s for some great jazz. Cap your evening with a starlight walk on the beach and then have the best night’s sleep you’ve ever had.

Thank you very much for talking to us.

You are very welcome. Thank you for the opportunity.

You can read more about Jennifer’s experiences in Mazatlan at her blog Mexcape.net.

NAFTA’s Effect on Mexico Real Estate

During the democratic presidential primaries both Hillary Clinton and Barrack Obama blamed NAFTA for loss of factory jobs and vowed to opt out unless NAFTA was renegotiated. Obama has said “We should use the hammer of a potential opt-out” and has described NAFTA as “devastating” and “a big mistake”. Although a 2005 Congressional Research Service study found that NAFTA had a mild to positive effect on US and Mexico economies, I don’t buy it. It is incontrovertible that NAFTA has been a primary factor in Mexico’s growth over the past decade and a renegotiation of NAFTA could have far reaching consequences on Mexico’s housing sector.

With Mexico already losing a share of their exports to low cost China, they can ill afford the additional costs of tarrifs. Economic growth would be slowed by loss of manufacturing jobs, and this would negatively impact the overall financial health of Mexico which would have a domino effect on the housing sector. A slower export market usually means less tax revenue that can be invested in infrastructure and government housing programs. Calderon’s push to increase the number of home loans granted to citizens would be hindered by a decreased budget for financial assistance programs. A less healthy economy can make it difficult for people to get mortgages or keep them as they could be fighting unemployment and higher interest rates. Less demand for homes could lower home values overall, though it may have a lesser effect on communities with a lot of American expatriot retirees.

Proponents for renegotiation say that NAFTA hurts Mexico because it allows factories to pollute more than if they were in the US and Mexicans can not compete with US farm subsidies. On a micro scale there are definitely some losers, but the big picture is that renegotiation would significantly hinder Mexico’s progress as an emerging world economy and I don’t think this helps anyone.

Fund Your Mexico Investment Property: Creative Financing Options

What if you find a great opportunity in Mexico real estate but do not have the funds available to buy the property? No problem! Here are some alternative financing options you may not have heard of.

Self Directed Real Estate IRA

One possible source of funds that you may not have thought of is your IRA account. Laws allow individuals to use their IRA to buy real estate investments without penalty as long as you don’t use the property until you are 59 1/2. You can do this by setting up a self-directed real estate IRA through a trustee or custodian. You can usually find these services through banks and financial service providers like Guidant Financial, a company that specializes in self-directed IRA. Guidant will set up an LLC for you so that you can transfer IRA funds into the LLC and then use funds to invest in almost any investment vehicle.

Warning: Consult a professional and make sure you understand all the rules before using your IRA funds to invest in real estate. If you break any rules you could lose the tax-free status on your entire IRA balance. For instance you can not do any repairs or manage the property yourself, since this would be considered a contribution to your IRA.

One of the disadvantages of using IRA funds is that you are prohibited from using your investment home until age 59 1/2. This might take some of the fun out of investing in Mexico real estate because you wouldn’t be able to use it as a second home or vacation home.

Fractional Ownership

Another alternative is to find investors that are willing to split the investment property into fractions so that you can reduce the amount you need to invest. If the group uses non-restricted funds, they could also enjoy some added benefits to their investment, like sunny vacations. You could set up a schedule with your partners so that you can use the property for a portion of the year.

Non-Recourse Loan

Another option is to borrow money from a bank with a non-recourse loan. This is a special loan in which the property is the only asset that the lender can claim in the case of a default. If you are worried about losing your IRA funds, this may be the best option for you. The hard part is finding a lender willing to grant a non-recourse, but there are several companies that will! North America Savings Bank is one lender who specializes in this type of loan.

This is just an overview of some financial options a lot of investors may not know about. It would be wise to consult a professional before making any life changing decisions.

Full Disclosure: Guidant Financial is a partner of Mexico Real Estate Investment

Mexican Real Estate: Assisted Living & Nursing Homes

The Baby Boomer nickname is changing to Active Adults, mostly because nearly 8,000 Boomers turn 60 years of age every day of the year and almost 70% of them will have to continue working past retirement age. One of their lifestyle options is moving south of the border and it looks as if their numbers, in Mexico alone, are expected to swell to an estimated 10 to 15 million between now and 2025. As their numbers increase, we are seeing a corresponding increase in the cost of living in all of the areas of Mexico that are well known for having long-term, well developed expat communities. In fact, while daily living expenses remain relatively low, home prices are now reaching the outrageous sums that expats thought they were leaving behind in the States. This will not deter them from moving to Mexico, of course, because they really do go there to enjoy the tranquil, simpler – and yes, less expensive – lifestyle. However, the specter of needing additional income is very likely to mandate that significant numbers of these Active Adults either find – or make – work for themselves in Mexico.

A hint to one of the best future segments of business in Mexico can be found in almost every sentence of the paragraph above. The American immigrants to Mexico are mostly at retirement age, at least in the beginning of this migratory phenomenon. They will be moving, some of them, far from home and facing the prospect of leaving behind aging parents who need either assisted living or nursing home care. Within a few short years, the Active Adult generation will also need assisted living and/or nursing home care. Wonder of wonders: Mexico has relatively few of these types of facilities. The market is wide open and initial investment is within reach of almost everyone.

Major Issues

The cost of assisted living and nursing home care, in Mexico, can be as little as 20% of the cost of the same care in the U.S. As of now, even this modest cost must be paid out of pocket, since Medicare / Medicaid cannot (yet) be used in Mexico. This should soon change, first because fifteen million organized absentee ballots is a strong inducement to lawmakers back home and, second, the Medicare / Medicaid savings to the American taxpayers will be enormous.

If Medicare / Medicaid remains as is, what is likely to happen, in the short term, is that potential assisted living and nursing home patients will move to Mexico during their “pay down” phase. This is the time they would be required to be “private pay” patients in the U.S. Then, when they go into the 100% funded by Medicare / Medicaid stage of their care, they will come back to the U.S. and tap the national budget on the wallet. The American taxpayer will not be amused and the politicians who refused to vote to allow Medicare / Medicaid to be used outside the country will be in deep trouble. To avoid that situation, it is expected that it will not be long before politicians see the logic of voting to allow Medicare / Medicaid to be used wherever qualified individuals choose to live.

Business Opportunities for Whom?

What does this mean to Active Adults who plan on starting their own business in Mexico? The concept of “Find a Need and Fill It” is alive and well on this issue. Shared living homes can be started by anyone. Assisted living facilities can be started by almost anyone and require a minimum of expertise. The homes must be safe, staff members must be good to residents and the food must be nutritious. Planned activities and competent health monitoring are absolute necessities. The home-sharing concept, as well as the assisted living concpt are both relatively easy to start and to maintain. Opening a nursing home in the States is a big-bucks operation, usually carried out by heavy-hitting investors. Opening a nursing home in Mexico is something that is within the financial reach of U.S. nurses and allied health professionals. This is an opportunity to start and grow a business in an arena that never would have been open to this level of health care provider in the States. Who knows? The quality of care might just be many times better if the nursing homes are owned and operated by health care professionals who have actually worked at every level of this kind of provision of care.

Choosing a Location

The one thing that American assisted living residents and nursing home patients, living in Mexico, complain about is a feeling of loneliness when surrounded by Spanish-speakers. They feel cut-off from the rest of the world, which is not surprising. The wise investor will look for a location that is near excellent health care, and in an area, such as the State of Yucatan, where the atmosphere is more European, has a less transient touristy feel, a bilingual staff is readily available, and expats are integrated into the local community, rather than living in “Little USA” enclaves. On the other hand, if the potential investor intends to cater to those who have excellent health care coverage in the States, such as veterans, they might want to open their facility near the Texas border, which has easy access to many V.A. outpatient clinics and full service hospitals.

Related Links

A Must Read article: Moving Mom to Mexico

For more information on Assisted Living and Nursing Home Facilities in Mexico: Long-term care south of the border (read the comments too)

Real Estate Investments and Crime in Mexico

Bloody headlines from the Mexican border sell papers – and lots of them – so do pictures of the Mexican military supposedly “storming” through Mexican towns. Those who are interested in investing in real estate in Mexico are well aware that describing all of Mexico in terms of two or three border towns is much akin to describing all of the United States in terms of the inner city areas of any number of American cities. Yes, those places exist in both countries, but most of the areas of both nations are filled with good people who place a great deal of value on the quality of life in their communities, and they work hard to improve it.

The Military

The first, and most shocking (for Americans) observation of this strange phenomenon is the presence of the Mexican military everywhere inside the country of Mexico. This is something that is unheard of in the U.S., where it is (supposed to be) illegal for the American military to be used against U.S. citizens inside their own country. The system in Mexico is much the same as the system in the U.S., with the Mexican military taking on the role that Americans usually see as the jobs of the National Guard, S.W.A.T. teams, the FBI, and Homeland Security. In most places in Mexico, the military is a welcomed sight and an integral part of the community, especially in times of natural disaster. It might not be a bad idea for the potential investor, once a location is decided upon, to go by and visit with the local police and/or military installations. Many a life-long friendship has been developed in just such a manner.

Crime Stats are Relative

At the present time, it is not possible to compare current crime rates in Mexico and the United States because it is not possible to get statists past 2005 for the U.S. and 2006 for Mexico. This means that a comparison in statistics between the two nations would not be valid because many old issues have been resolved and new ones have sprung up in other places. However, the statistics that are online can be found here for the U.S. and here for Mexico.

Mexico’s highest 2006 state homicide statistics were in Sinaloa, Mexico, Oaxaca, Guerrero, Chiapas, Michoacan, and Sonora. The lowest 2006 state homicide rates were in San Luis Potosi, Durango, and Tabasco. The question then becomes one of whether to choose an investment location based solely on crime statistics. It very may well be that a state with a very low crime rate may also have a very high rate of weather related tragedies. It could be that a state with a high crime rate may have only one city that is responsible for that entire crime rate.

It is left to the potential investor to do all of their homework so that a skewed view of crime – and the role of the police and military – in any state or city in Mexico, does not unduly influence their decision. This is the same advice one would get in investing in real estate in the U.S., or anywhere else in the world.

Photo by Rob Lee

Mexican Real Estate: China, Nuevo Leon

Decades ago, one of the monthly ladies’ magazines had a little column that was entitled “Put Your Head In Your Hands and Let Your Mind Roll By.” That has always been some of the best advice any one person can give to another. In the case of investing in real estate in Mexico, one only has to dream the dream – and then find it on a map of this magical country.

There are two kinds of people who ought to be investing in real estate in a little place called China, Nuevo Leon. The first group is avid fishermen (and fisher-women too). The second group is those who feel they need to remain near the border, possibly for health care reasons. We will discuss both groups’ needs here, but feel we must also include the group that just plain gets a kick out telling the folks back home that they have moved to “China.” That group needs no discussion, as they will find their way to China on their own and are guaranteed to have a marvelous time doing so.

Where is China, Nuevo Leon?

China, NL., is about 65 miles southwest of McAllen, TX, just off of an almost brand new four-lane highway, 121 miles west-southwest of Matamoros, and 126 miles south-southwest from Nuevo Laredo. It is also about 72 miles east of Monterrey, NL. The state provides an excellent online tourist map that even includes the locations of PEMEX stations. At the present time, the population of China is approximately 10,000 but, considering its proximity to La Presa El Cuchillo and to the southern border of Texas, this number should begin to grow rapidly in the near future.

Fishing in China, NL

Many of Mexico’s best bass fishing locations are man-made lakes that are named for the dams that created them, which is the basis for the name La Presa El Cuchillo – the world class bass fishing lake just outside of China, NL. This particular lake has the distinction of also being the largest reservoir for human drinking water in Latin America. The lake itself has only been open for sport fishing since 1994 but, since then, has distinguished itself as a favorite location for both national and international bass tournaments. Russ Bassdozer has an excellent article online that will be of great interest to those who love to bass fish and who are tempted to consider investing in Mexican real estate near the world class bass fishing lakes of north-central and north-eastern Mexico.

Health Care Concerns

There are millions of Americans who would love to try their hand at living in Mexico, at least part time, “if only” ….. some say that Mexico is too far away from home. Some worry about being far from home and not being able to use their Medicare or VA benefits in Mexico. Not to worry. The border between the U.S. and Mexico may be 1,969 miles long, but it is certainly not 1,969 miles wide and China, NL, is the perfect place for them. The road from China to McAllen is perfectly straight and it takes no more than an hour to cover the distance between them. McAllen is home to a brand new VA outpatient center. If more complex VA medical center care is necessary, it is available four hours away in San Antonio’s Audie L. Murphy VA Hospital. For those who use Medicare and private insurance, McAllen is now home to a variety of modern health care centers, including hospitals dedicated to specialties, such as cardiology and even a children’s hospital. For minor illnesses, it would be less expensive to see a local physician or combine a doctor’s visit with a trip into Monterrey, which is a modern health care center in and of itself.

Beware: Visitors from the North

For those who do decide to spend a few of their Mexican real estate investment dollars in China, NL, – even for part of the year – there is only one thing of which they must beware… and that is a constant stream of company coming to visit. China’s proximity to the border of the U.S., coupled with good roads, great fishing, the nearby cosmopolitan city of Monterrey, and cheap gas can mean only one thing – every friend and relative they have ever known in life will be coming down to visit before the end of your first year. A good dose of humor, plus a willingness to admit early that there is no way they can (nor should be expected to) provide a free vacation for that many people ought to resolve the issue to everyone’s satisfaction.

To learn more about China and all of Nuevo Leon, explore the links on Mexico Nuevo Leon.

Image Credit

Mexico Real Estate vs US Real Estate

The latest edition of Fortune magazine argues that you don’t have to go overseas anymore for a dream retirement home. Slumping home prices in markets like Miami, Las Vegas, Phoenix, and San Diego have generated opportunities for great deals, without having to adapt to a new culture and way of life in Mexico. Over the past year, home prices are down 21.7% in a year in Miami, 22.8% in Las Vegas, 8% in Pheonix, 9.8% in San Diego and there is little evidence that the downturn will be ending anytime soon. The value of the dollar has also been falling so Americans no longer have the purchasing power that they once had in Mexico.

The other side of the argument is that Mexico’s home market is appreciating rather than depreciating, the prices are still significantly lower in most areas, the cost of living is still much cheaper and you can hire someone to do your chores for much less. Most people prefer sandy beaches that overlook the Pacific rather than the Phoenix desert. Mexico offers many places to explore for those who want something new. So while I agree that there are opportunities everywhere you look in the US, it pays to do your research to discover the ideal lifestyle that fits you and your goals, even if that means brushing up on your espanol.

Interview with Rosana Hart, Author of Mexico with Heart

Rosana Hart lives near Lake Chapala, in San Juan Cosala, with her husband Kelly, two dogs and two cats. She’s been there for two and a half years, and before that had traveled around many parts of Mexico at various times, ever since she was a child.

Hola Rosana! Thanks for talking with us. First off, why would you recommend Mexico as a place to live?

Mexico has many advantages as a place to live. It is close to the US, and one of the few places in the world that you can easily get to by car as well as by air. With our family and friends scattered around the US, we often find it easier and more economical to drive than to fly. Yes, even with high gas prices — but then we do drive an economical car. We also like driving because we can bring a lot more stuff back with us!

Of course, ease of access wouldn’t matter if Mexico weren’t a good place to be. The main thing that makes it enjoyable for us is that the Mexican people are very warm and caring. This shows itself, for example, in how they will go out of their way to help out. As one reader of my blog on life in Mexico commented about a trip he took around Mexico, people “almost pushed each other out of the way to be of assistance.” The warmth also comes out in how pleased they are when you speak even a little Spanish, and how patient they are if — like us — you mangle the language frequently.

Cost of living is another important factor. We live relatively simply compared to most Americans, but it’s rare for us to spend over $2,000 a month on everything, including our travel to the US (averaged out over a year) and a part-time gardener and a part-time maid. Whatever your level of living, it does tend to be more economical here. That said, buying a house here is actually more expensive than in many parts of the US. We vacationed in the Ozarks last summer and were amazed at the low real estate prices. But rentals are at very good prices here compared to the value of the house, and many of us who live here do recommend that if it is at all feasible, people coming here from up north rent for a while before buying. It’s not at all uncommon for one partner to love it here and the other one not to. Plus, where you want to be can change once you get to know an area.

The climate is heavenly. The arts flourish. I could go on.

What is the most difficult thing for newcomers to adapt to?

There is a lot of individual variation in what newcomers find difficult. For me, it was the Mexican traffic, which has a more — shall we say — free form style. It doesn’t faze my husband in the slightest, luckily.

I’m really not sure what one thing would stand out as a difficult thing, but there are major cultural differences between Mexico on the one hand and the US and Canada on the other. We northerners tend to expect the abstract concepts of fairness and consistency to be how things should work, for example in government offices. Mexicans — including the people who work in those offices — don’t always see it that way. Their attitude has more to do with who you know and what little gifts (we would indignantly say bribes) might be involved, plus a hefty dose of randomness. I’ve noticed many North Americans (myself included!) get huffy about the inconsistency that takes place between how one person might be treated and what another one would encounter.

Something else that can be difficult is being away from family, especially grandchildren. Luckily, with inexpensive internet-based telephone services, it’s easy to talk with family a lot.

What would you advise people who move to Mexico to watch out for?

I would advise people who move to Mexico to give themselves plenty of time to beware of quickly falling in love with Mexico, or a particular part of the country. Just as falling in love with a particular person doesn’t always work out, once you get to know what daily life is like here, you may fall out of love. Or you may not!

While violent crime is extremely rare here, there is plenty of theft. You do have to think about keeping your home secure (dogs, perhaps alarm systems, never leaving any part of the house unlocked when you go out, etc.) and being alert to possible pickpockets and such yourself. Basic precautions take care of most of the problems. As an example, we raised the height of the stone wall along our property, and put the typical broken glass on it, after my husband’s tools were stolen from his unlocked workshop in our yard one afternoon when we and our dog were in the house nearby. We also added a second large dog.

Can you estimate a general range on what an average person can expect to spend on utilities in Mexico?

Generally, property taxes are way lower than in the US. Ours, for a small house on about 1/4 acre, are under $100 US per year (The downside of this is that local governments have way less money to spend on police, roads, etc.).

Electricity and water can be expensive, and that Mexican arbitrariness can come into play. Our electricity runs about $125 US for two months, but we are habitually very careful about how much we use, just a habit we have had for years; much of that expense comes from running our pool filter. I know others without pools who are paying a lot more.

I understand you wrote a book titled Mexico With Heart about your experiences in Mexico. What are the best tips you can share from that book?

Well, the title is a pun on my last name but it is also the first tip. If you come here with an open heart, you will have so many wonderful encounters.

I guess that leads to my next tip, which is to start conversations with Mexicans you meet, no matter how little Spanish you speak. Many of them worked in the US, and it’s surprising to me that all over this country we run into Mexicans who speak very good English. One of the best ways to start a conversation is simply to ask a question, about anything. I’ve found that once I break the ice, conversations happen.

A third tip would be to work on your Spanish. No matter what level you are at, learning a few words a day will improve things a lot. Don’t be timid about trying out what you do know.

Can you talk about your impressions on the quality of the infrastructure in Mexico: e.g. roads, water, hospitals, etc.?

The roads are a mixed bag. We have twice taken a small motor home south from Texas and the main highway that is closest to the coast was not in good repair. For many long-distance trips, you have a choice between rather expensive, privately-run toll roads in good condition and with relatively little traffic, or much slower truck-clogged free highways. We always spend the money for the toll roads.

You don’t drink tap water or even brush your teeth with it. Bottled water is available everywhere, from small bottles of a liter or less in grocery stores to large bottles that are about 5 gallons. We have several 5-gallon containers and whenever we go to nearby Ajijic, we stop in at our favorite water purifying place and have our containers cleaned and refilled, at about a US dollar per bottle. Water and ice served in restaurants are required by law to be purified.

We are favorably impressed with the high quality of medical and dental care available in our area and with outstanding specialists in nearby Guadalajara. In remote areas of the country, it would not be the same. The price for a consultation with most top specialists is about $45 US, and you can generally get an appointment within a few days. These specialists have often worked in the US and typically have excellent English, while most of the regular doctors have at least adequate English. Many of the Guadalajara hospitals are new and built to very high standards. Even the simpler clinics are usually very clean and well run. One interesting difference here is that the clinics are usually owned by one or more of the doctors who work in them.

My husband fell off a roof when we first came to this area, and he broke a rib. Total cost of all doctor visits, X-rays, and meds? Just under $500 US.

Thank you for taking the time to share your wisdom with us!

You’re very welcome.

Rosana Hart blogs at www.mexico-with-heart.com/blog. You can read her book online at http://www.mexico-with-heart.com/book/0-intro.html

The Rise of the Rest: Effects on Mexico Real Estate

The rise of emerging markets such as the BRIC countries (Brazil, Russia, India, China) have the potential to greatly affect your international investments. “The Rise of the Rest” comprises of the billions of people in emerging countries who will gain significant wealth and influence in the coming decades. It is estimated that 86% of the world population will be living in emerging markets by 2050 (IBM).

One of the potential outcomes of the rise of the rest, is the growth in the number of people who are able to afford second homes and retirement homes in places like Mexico. This could mean increased demand for the Mexico real estate ocean front market in the future. China, whose growth has been about 10% for the past decade is projected to soon surpass the US in GDP to become the number one economy in the world. As the cumulative wealth grows in these emerging countries, many new millionaires will result from the rise in wealth and some will be interested in retiring to a nice beach front property in a sunny climate. Mexico is also considered an emerging market, and as more Mexican citizens rise to an income bracket to be able to move to a more desirable location in Mexico it should also increase competition for the limited supply of homes. The rise of emerging markets should also increase worldwide travel and thus demand for the rental market as was discussed in the previous post, What the Tourism Time Bomb Means to Mexico Real Estate. Here is a very interesting video on global trends.

What Effect Will US Economic Turmoil Have on Mexico Real Estate?

In a global economy we are all connected, and there is perhaps no country more dependent on the US than Mexico. Nearly 80% of Mexico’s exports go into the US and about 10% of its population work in the US according to some estimates. So it should be a no brainer that Mexico’s economy and real estate market should be hurt by trouble to the north. But not so fast!

Mexico’s has a far more robust economy than in the past that experienced major financial crashes (inflation was 35% and lending rates exceeded 59% in 1995). Economic reforms encouraged trade and foreign investment which reduced external debt and reduced trade deficits. While a slowdown in exports is expected in 2008, one of Mexico’s greatest assets is its oil. Mexico’s nationalized oil industry was the sixth largest in the world in 2006, producing 3.71 million barrels a day. This provides steady revenue to the government, and has increased due to $130 per barrel prices. Mexico’s lending practices are far more conservative than in the US which reduces risk of mass foreclosures. There is no such thing as an adjustable rate mortgage in Mexico and most loans require a substantial down payment and extensive credit checks. The mortgage backed security market exists but is very small compared to the US (US$5.8 billion by 2008 EIU).

The predicted global economic slowdown in 2008, will have a minor effect on Mexico’s real estate market because there are just too many factors that favor growth. The market has many undervalued areas, demand is growing, infrastructure is improving, foreign direct investments are increasing, the country is getting richer, etc., etc. The US economic slowdown is temporary, and so is the opportunity in the Mexico real estate market. Thoughts?

Sources

http://www.eia.doe.gov/emeu/cabs/Mexico/Oil.html

http://www.latinbusinesschronicle.com/app/article.aspx?id=2503

Medium and long-term financing: Structured finance. EIU: Country Finance: Mexico, 2008.