Max Katz, broker-owner of the Baja Real Estate Group based in Rosarito Beach south of Tijuana, said the most discouraging thing to agents is the re-running of television news stories that are more than a year old.
“Things have changed for the better,” Katz said. “But you would never know it. Given what’s on the tube, you would think we have gone backward.”
Jeffrey Hill, a former Seattle resident, has four vacation rental homes in Puerto Vallarta and one in Florida (“Does that tell you which is more profitable?”) He spends most of his time south of the border and part of his year in Fort Lauderdale.
“Would I ever go out walking at 5 a.m. alone in Lauderdale or Miami? Hell no,” Hill said. “Just the thought of that scares the hell out of me. There are many neighborhoods in Seattle where I would never go out walking alone in the dark.”
Even with the killings in the country the past two years, statistics provided by the Citizens’ Institute for Crime Studies in Mexico City reveal that the murder 2009 rate in Mexico was lower than it was a decade before. In addition, the 2008 murder rate in Washington, D.C., was nearly four times that of Mexico City in 2009 (31.4 per 100,000 compared to 8 per 100,000).
In reality, the rest of Mexico is unchanged and laid-back, warm and welcoming to foreigners. It has received a bum rap, as reporters have raced to make the world believe that the entire country is on the brink of a blood bath. That is simply not the case, and many of the areas continue to appreciate, unlike most of the markets in the U.S. Nine of Mexico’s 31 states have any significant issues with murder or other major crimes and those are concentrated in specific districts.
“Some U.S. newspaper or news service put out a report about some drug related shooting in Acapulco,” Hill said. “But the headline said something like ‘Drug related shooting in major Mexico resort city.’ Why didn’t they just say it was in Acapulco instead of insinuating that all resort cities have issues? Again, my thought of media/government conspiracy kicks in.”
Are you ready for a contrarian cruise through Mexico that avoids drugs, murders and muggings yet provides proof of an inexpensive, carefree life? That’s not difficult to do because 95 percent of the country still offers exactly that. Get on board, and rest assured we won’t be crossing the border at Ciudad Juarez after dark. And, we won’t forget about your investment portfolio along the way.
“It's not such a bad idea to diversify away from stocks,” said Cramer, a magna cum laude graduate from Harvard. “I think that out of favor real estate in Mexico that's easily accessible to Americans represents a great buy . . .”
He added that there is “no property tax,” the properties are “incredibly easy to maintain,” and there are “property managers everywhere.”
Keep in mind our trip is not about the cost of real estate. It’s about the cost of living. Oh, and Mexico DOES have a property tax – approximately 10 percent of what you are paying now.
In this book, we will correct Cramer’s mistake on tax plus meet other second-home buyers, investors and retirees who share his views about living and investing south of the border. We will show you their answers to our questions about crime and occupancy in key areas of the country. We’ll also explain why Mexico will become a needed alternative especially for 59,250,000 baby boomers that have not saved enough to fund their retirement years.
* * *
It’s not just about the cost of real estate in Mexico – it’s about the cost of living. A lower cost of living is in addition to lower real estate prices. While a $300,000 waterfront condominium can be expensive to one person yet a bargain to another, the actual costs of goods and services are about the same. All people will pay the same for fruit, vegetables and staples. This is perhaps one of the most important factors for recreation, investment and retirement buyers – especially baby boomers in terms of their decision to move to Mexico. After all, it is a lack of money and assets in their retirement funds that has ultimately led to considering Mexico as a retirement target.
Unfortunately, the negativity surrounding the country comes at a time when more and more Americans could use a less expensive place to live. According to a new report by Washington, D.C. - based Center for Economic and Policy Research (CEPR), baby boomers have not saved, will be forced to work longer and/or move to less expensive places than they anticipated. Property taxes, health care, cost of living will force boomers to more than thinking about moving to other countries, especially if they plan on living at the same level of comfort as they do now.
In Mexico, you will discover not only high-quality health care but also an impressive standard of living. Property taxes, which seem to rise annually in the States and are a primary reason seniors move out of their primary homes, are extremely low south of the border. Most property taxes in Mexico are less than 10 percent of a North American home.
Expensive U.S. insurance premiums and prescription costs . . . all of those (and more) can be had for a mere fraction of what it costs you right now. While prices will vary depending upon location, here is a realistic example of what you can expect in Mexico.
Your money goes a long way. Homeowners’ insurance bills are small because fire hazards are limited and people aren't as litigious as in the United States. And, that’s just a start.
But first and foremost, let’s address what’s on everybody’s mind when you even mention the word “Mexico.”
Chapter One
The Perception of Crime is Way Out of Line
U.S. Expats Still Feel Safe, Carefree
“You think Americans really are not visiting Mexico because of crimes in the papers?” asked Jerry Kerr, a native of San Francisco who spends his winters windsurfing in the warm waters of the Sea of Cortes. “Don’t they realize it’s basically a border deal among drug gangs?”
Kerr’s little casa across the street from the water near the tiny village of La Ventana, 40 miles south of La Paz, has nearly doubled in value in the past five years. He can walk to get basic groceries and wax for his windsurfer while the capital of Baja California del Sur and home to 200,000 residents, supermarkets, hospitals, banks, cultural events and an international airport is less than an hour by car
The La Ventana area is gated and fenced on all sides – not for protection of vandalism but to prevent the neighboring cattle from invading the property and munching on the vegetation.
“Vandalism and theft have never been a concern,’’ Kerr said. “In fact, our home and well being are much safer in Mexico than in California.’’
* * *
North Americans living in Mexico have retained the manana attitude even when it comes to crime. They realize it’s basically a border war among drug gangs.
News reports – including a segment on 60 Minutes – have depicted the entire country of Mexico as being an absolute mess, awash in blood and guns on every street corner. Ironically, people living there have a dramatically different perspective, especially in the “fly-in” destinations that continue to hold their value.
Despite what you may have heard, read and seen, the country is not under siege. The laid-back lure of Mexico’s beaches,
