OK, so a brief glimpse at prices has convinced you that Mexico real estate costs less. But still – aren’t you just adding more expenses to your lifestyle; even if a condo on the beach in Mexico is a quarter of the price of one in Hawaii, you’re still spending $200,000 USD, adding another property to maintain, more travel expenses, right?
While it’s always good to balance every opinion with another, a closer look will show that this is, in fact, NOT the truth the situation.
Briefly, let’s consider the main reasons people buy in Mexico:
- Mexico retirement – part time in Mexico
- Retirement – full time, permanent in Mexico
- Vacationing
If you are buying for any of these reasons (as well as others not listed here) buying a property in Mexico will NOT pose any additional expenses. Essentially it would replace a property you would own elsewhere. If make the leap 100% and make Mexico your full-time residence, then you would sell your property back home and the savings would be obvious; if you are vacationing or living part time in Mexico, than the property would simply replace a second property in your home country.
In either case, it would offer considerable savings for the following reasons:
The home would be less expensive. Whether you’re replacing your permanent home or second property, you’re replacing a property worth $300,000 USD, for example, with a Mexico home for sale that might cost $200,000 USD. Of course, the difference could be more or less or on a larger or smaller scale depending on your situation, but in any case, you’re adding a very large lump sum to your savings. How can you go wrong with that?
The cost of living is significantly lower. Many expats feel that on average living costs about half that in the U.S. or Canada. A handful of items are more expensive, but by and large day to day expenses, bills, traveling, groceries, furniture, dining out, etc. are significantly less costly. Some people will choose to spend their extra savings on living more comfortably, traveling more, etc. But either way, you win in the end.
But what about travel expenses? But won’t you be spending all of this back in travel? If you make the move permanently, this isn’t even a concern. However, even if you make frequent trips home or if you are only living in Mexico part time, the travel expenses are probably lower than you would think. Good prices on return flights from Canada to Cancun or Puerto Vallarta range between $400 and $600. That’s about as expensive as it gets, unless you’re looking at a less popular location that requires various flights. However, in that case, the savings on properties and cost of living would be that much greater.
Now let’s compare. For most North Americans, the flights are only slightly more than most flights to warm weather locations in the U.S. In some situation there is no difference. But let’s be generous and assume that the difference is $200 per return flight. Let’s say you’re back and forth often – 4 times a year. That’s an added expense of $800 USD per year. It would be rare that you’d actually arrive to the point of spending this much more, but, just for comparison …
If you consider a cost of living that’s about half of that back home, for some people that would mean saving up to $2000 per month. Let’s just say $1000 to avoid going overboard. With 12 months in a year, that makes for $12,000 USD savings per year. If you’re spending only part of the year in Mexico, then we could say half of that – $6000 USD. And don’t forget about that huge chunk you saved on the property in Mexico – $50,000 maybe even $100,000? So, how does $800 USD more in travel expenses, which you may not even spend, compare to that?
The savings are most certainly a HUGE point in favor of owning a property in Mexico. Of course, probably the bigger point is getting used to living in another country. That’s probably easier than you think too, but that’s a different topic.
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