Re: Should we buy or should we rent

by David Thu Jan 03, 2013 11:03 pm

Coffee guy is welcome to his own opinions and predictions. Having lived here for nearly 8 years I think he's off-base on both. I own and have since 2005. IMHO my home is a good investment and now is a good time to buy. I never try to predict the future and certainly don't give any credence to newcomers who attempt to. 30 months here and he's predicting the future of the real estate market? Sheesh!

by joec Thu Jan 03, 2013 11:51 pm

Jim W wrote:
coffeeguy wrote:We've been visiting the area since 2004 and have lived here for 2.5 years and know the real estate and rental markets well. My short answer to this question (which would never be published on TOB) is that renting is the only sensible choice, unless you have money to burn.

There's a 3-5 year inventory of houses on the market, new construction still going on, a clear transition to wealthy Mexicans rather than gringos as the dominant players in the local housing market, the area is still in play for the narco cartels, crime rates are high and the U.S. economy is still in the toilet.

What is the upside of owning? You are highly unlikely to experience any price appreciation in your lifetime, will have to take a small or huge "bath" to sell, and when and if the ^%$# does hit the fan with more serious crime you will be stuck. Rents as a percentage of property values are still high here but are slowly falling to realistic levels, and if you rent and need to leave - be it to another part of Mexico or NOB - you can do so in a matter of hours. I'm not picking on Lakeside here - I would say the same rule applies to living as an expat anywhere in the developing world, and for that matter most places in the U.S.

For peace of mind and flexibility renting makes more sense, and the older one is the more sense it makes, as capital tied up in a (stagnant or depreciating) asset is money that could be used to fund "bucket llst" adventures.

Some of us don't live on your budget coffeeguy....and take a lot of pride in owning their home! When I factor in the low interest rates on savings, I find that after 7 years of owning and enjoying my home, vs renting, I will break even, +/- 10%. Your words of wisdom, fall on deaf ears for me! You sound like a person that can't afford home ownership, and "YOUR BUCKET LIST" Chose what you can afford! I am a happy camper, as most of us are that made the decision to locate here, and own our homes.....BTW, there is a nice Casita for rent in the safest Frac @ Lakeside.......Cheap!

JimW - I agree with you. Coffeguy has lived here 2.5 years and already knows all there is to know about Lakeside RE. Another know it all who we can do without. He's assuming a 3 - 5 year inventory of houses, but people are still buying.

He knows the market so well that he says the transition is to wealthy Mexicans. Totally untrue. He hasn't looked at MLS sales for 2012. As of September - October when I had seen it, there were 2 or 3 Mexicans who bought houses. ALL the others were Americans or Canadians, I will get an update soon and publish the results here.

There are people who are renters and those who are owners. We take a lot of pride in our house, as we have with every other house we've owned.

by ferret Thu Jan 03, 2013 11:55 pm

Too funny Jim! YMMV = your mileage may vary i.e. your opinion may be different.

by Parker Fri Jan 04, 2013 12:03 am

CanuckBob wrote:One of the questions we keep mulling over is whether or not we should buy or rent when we move down permanent. I have heard from many people that we should rent for a least a year before any decisions are made. I would like to hear what you have done and why?

We bought seven years ago because we found an older home that we wanted and felt the influx of “Boomer” retires would put the cost of this type of home beyond our means. In all honesty I believe we were right but if we were moving here today and by the looks of your VB and lovely wife I would rent first, give yourself options.

by joec Fri Jan 04, 2013 12:48 am

hockables wrote:Buy , rent, do whatever is good for you.... duh
Only an idiot would buy into unfamiliar territory... of course you rent first to familiarize yourself
Agreed folks in their golden years needn't and maybe shouldn't look to real estate as investment...
but if it feels good... do it.
Listening to reasons not to buy... criminal activity on the rise, deflated property values, changes in capital gains taxes....
BITCH>>BITCH>>BITCH

My anual propert taxes here are $140.00
I just returned from a trip to Canada where I sprang for a dinner for 4... cost $300.00 ...
If I go back to Canada... do you think I should Rent or Buy?

I hear they really are selling the Brooklyn Bridge this time...

hocks - One of the renters here will offer to rent it instead of buying it because buying is not a good investment. I wonder how they feel about their investments earning 1 - 1.5% a year. LOL

by Parker Fri Jan 04, 2013 12:56 am

hockables wrote:Buy , rent, do whatever is good for you.... duh
Only an idiot would buy into unfamiliar territory... of course you rent first to familiarize yourself
Agreed folks in their golden years needn't and maybe shouldn't look to real estate as investment...
but if it feels good... do it.
Listening to reasons not to buy... criminal activity on the rise, deflated property values, changes in capital gains taxes....
BITCH>>BITCH>>BITCH

My anual propert taxes here are $140.00
I just returned from a trip to Canada where I sprang for a dinner for 4... cost $300.00 ...
If I go back to Canada... do you think I should Rent or Buy?

I hear they really are selling the Brooklyn Bridge this time...

If you choose (and I don’t believe this is your intent) to move back to Canada than you’ll probably get what you wish for, a shorter “dick”. Please if some have any sense of humor or not, please give me a pass on this one. Very Happy

:D:D

by slainte39 Fri Jan 04, 2013 1:04 am

Why was hockables post deleted?

by CanuckBob Fri Jan 04, 2013 7:38 am

Parker wrote:
CanuckBob wrote:One of the questions we keep mulling over is whether or not we should buy or rent when we move down permanent. I have heard from many people that we should rent for a least a year before any decisions are made. I would like to hear what you have done and why?

We bought seven years ago because we found an older home that we wanted and felt the influx of “Boomer” retires would put the cost of this type of home beyond our means. In all honesty I believe we were right but if we were moving here today and by the looks of your VB and lovely wife I would rent first, give yourself options.

In case you didn't notice the original post is over two years old now. Most definitely one should rent for a while before they buy. Over the past 6 years we have rented in Chapala centro, Ajijic village, West Ajijic (lakefront), El Limon & West Ajijic (hillside). We decided that we prefer living in the village with it's vibrant atmosphere and convenience to most things. We want to live the "Mexican" experience. Since the RE markets here are quite depressed and our other investments haven't done squat we decided to pull the trigger and purchase a house within the village while the price was right. We probably couldn't afford a similar place in the village 5 or 6 years ago when prices were high. We are here for the long term and coming here in your 40's versus your 60's probably puts a different perspective on things.

I have no idea why some people think that the longer you have lived here the more you know. There are people that have lived here 10+ years, don't speak 3 words of Spanish, barely leave their house and don't know anything about Mexico or this area other than what they read on web boards or hear from their friends. Most of the time their info is hearsay and inaccurate. It's all about getting out to do your own research and experiencing life here first hand.

by bobnliz Fri Jan 04, 2013 9:26 am

Over here in San Carlos we have the same problem... too many sellers wanting too much $$$ and very few buyers willing to invest.

We go through life finding out what we DON'T want.
And anything untried is an unknown.

Hence, I believe putting a toe in the water instead of diving into the unknown has a huge advantage. Lizzy

by gringal Fri Jan 04, 2013 9:28 am

I have no idea why some people think that the longer you have lived here the more you know. There are people that have lived here 10+ years, don't speak 3 words of Spanish, barely leave their house and don't know anything about Mexico or this area other than what they read on web boards or hear from their friends. Most of the time their info is hearsay and inaccurate. It's all about getting out to do your own research and experiencing life here first hand.

True. Long before we officially "retired" to Mexico, my husband and I had decided that the place to choose, whether in the U.S. or another country, would be in the middle of a small town where we could walk to everything and get involved with the life there. We first moved to San Miguel and quickly discovered that downtown was prohibitively costly (a mil or so would have done the job nicely) so we wound up buying on the outskirts, but near enough to walk down the steep hill and taxi home. When we found the situation wasn't working for us, we moved to Ajijic, and this time could afford a central location. We bought rather than renting, probably have spent our bucket list on it, but have no regrets. I would still recommend (do as I say, not as I do) that newcomers rent for awhile.

I'd also recommend learning at least enough Spanglish to get by. Learning more would be better, and would smooth the road in tight situations.

by juanrey Fri Jan 04, 2013 9:34 am

As a renter, I am going to chime in and say that I believe everyone's circumstances are different and I'm not surprised to see both sides being presented here.
But, I remember when CBob got here earlier in 2012 and he was convinced he was going to rent, and by the end of the year he has now purchased a house.
According to him, he found an excellent deal, figured out how to make it work financially for him and Sharon, and he's happy.
Isn't that the whole objective?
If you find something that works for you, go for it. There is no one rule of thumb that fits all.
I still believe newcomers should rent first to get to know the area, then do whatever works for them.

by joec Fri Jan 04, 2013 10:22 am

Even though I'm a homeowner, I still believe a person should rent in different areas to see what area they might like best. Many people come here and look at houses and buy in the first few weeks. That's OK too if they fall in love with the area. We did that.

by David Fri Jan 04, 2013 10:32 am

At this point in our lives there's only one "should" and that's to do only that which you're comfortable with.

by Carry Bean Fri Jan 04, 2013 10:52 am

The one good thing about my brief rental experience was I learned I did NOT want to live in a gated community. Others wouldn't live in an ungated area. I bought my house within 3 months while it was under construction & I'd only been here for a week's visit 8 months before moving here. So within that first 3 months I bought a car & a house. However, I've lived in a lot of different places in all kinds of situations & pretty much know instantly what will work for me & what won't. I also have only myself to please. THAT can be a huge factor. The husband may love something & the wife hates it.

As far as property values, I could not care less. Whoever I leave the house to, what they make on it is gravy. I'll be dead.

by hound dog Fri Jan 04, 2013 1:38 pm

An interesting discussion on the subject of where to settle down here. When we decided on Mexico we had a few areas in mind. Guadalajara or Lake Chapala, Oaxaca City, Merida and Cuernavaca. My wife flew down in the spring of 2001 and was determined to look at all of these places but immediately saw a house in Ajijic she fell in love with and that was that. We have never regretted buying that house but found Ajijic to be something of a trial so we bought in San Cristóbal de Las Casas after first exploring San Luis Potosi City , Merida, Jalapa and Oaxaca City among some other places.

We had intended to sell off the Ajijic home and move permanently to Chiapas but as one gets older one´s values change and, after I nearly kicked the bucket in the miserable and primitive hospitals of San Cristóbal, we realized the efficacy of living near a big city with excellent health care.

We kept the home in San Cristóbal but also kept the home in Ajijic as well. Yes, I had an insurance policy that would fly me to Mexioco City, Monterrey or Guadalajara free of charge to take care of the gall bladder problem that was killing me four years ago but those emergency flights to the best hospitals are not so attractive when one is at death´s door.

Places such as Metropolitan Guadalajara or Mexico City are the´places to be when you are old and in fragile health and a crisis can approach in minutes. A couple of hours or more to a decent hospital is an eternity when you are facing the hangman. Don´t kid yourself.

by E-raq Fri Jan 04, 2013 2:29 pm

We bought, perhaps too soon in what we considered a very lovely area, Las Salvias. Well things didn't work out too well there, thanks to some local white collar criminals who shall remain nameless since they threatened us through an intermediary with bodily harm. We had planned to renovate the house which was in pi$$ poor shape, however due to the crooks we didn't get the opportunity. In a way I have them to thank, because finally after truly being homeless in Ajijic for over a month, then living in that rathole, we were targeted as newbies, and that is exactly what we were.

Anyhow, Kevin Collins showed us the house we live in now. We saw it, fell in lust and were able to move into a house which had some serious problems however we were able to take our time rectifying those structural issues, that of course were never mentioned prior to the purchase. I´m not sure who to blame for that however I'd probably cast the blame at the feet of both prior owners. One of whom put on an addition which threatened not only the structural integrity of the addition, but parts of the original house as well. The owners who bought after that had no idea of how to remedy this issues. Their loss, our gain I'd say. Failure to disclose is pretty common here, however it is an extremely dirty trick and something which I would not ever do. It has all now been rectified by additional underpinning and a welded steel belt which surround the entire structure. A perfect solution.

If we had attempted to do all that as newbies who didn't speak a word of Spanish we would have been screwed blue by the more unscrupulous members of the construction community here. Lots of those to choose from.

Thirteen years later, other than living in a gated community which I am very unhappy about ( not everyone feels this way) I can just close my door, and forget about it. Trust me I have done that many times in the past. The house has had a complete overhaul in every area, so we can now rest easy. Love the place. Don't want to ever move again.

So there's my FWIW.

by gringal Fri Jan 04, 2013 2:47 pm

The non disclosure in real estate is something that slips by newbies who have the blind notion that things are somewhat like they are in the States. HAH.

Even when certain conditions (like separating the utilities) are the law, nobody has much recourse when a dishonest seller, real estate agent and broker are all in cahoots. We should know, and piles of money later, it was fixed......at our expense.

Illegal building without the proper permits is all over the place. A person on my block got a remodeling permit on a tiny store covering 100% of the mini lot and proceeded to build a three storey house with an additional dungeon (uh, basement) this year. According to the owner, anything can be done if the proper palms are crossed.

So, all........if you buy........watch your posterior.

by E-raq Fri Jan 04, 2013 3:42 pm

gringal wrote:The non disclosure in real estate is something that slips by newbies who have the blind notion that things are somewhat like they are in the States. HAH.

Even when certain conditions (like separating the utilities) are the law, nobody has much recourse when a dishonest seller, real estate agent and broker are all in cahoots. We should know, and piles of money later, it was fixed......at our expense.

Illegal building without the proper permits is all over the place. A person on my block got a remodeling permit on a tiny store covering 100% of the mini lot and proceeded to build a three storey house with an additional dungeon (uh, basement) this year. According to the owner, anything can be done if the proper palms are crossed.

So, all........if you buy........watch your posterior.

Damned good advice gringal, and to tell the truth we had 3 Professional Engineers working to resolve the problem. Not everybody has access to that kind of talent. One was civil, one was structural one was mechanical, the pool boy. Plus we had an incredible maestro who didn't charge an arm and a leg. That fix ran about $2000 including the welder, scaffolding rental and all materials.

by CanuckBob Fri Jan 04, 2013 3:54 pm

Did you not get a good professional inspection done on that place prior to purchasing?

by E-raq Fri Jan 04, 2013 4:11 pm

CanuckBob wrote:Did you not get a good professional inspection done on that place prior to purchasing?

I was told by the realtor that an inspection had just been done. He was a friend of the owner. By this time with a container of household goods, we were getting pretty desperate. Now did he lie, I don't know. Maybe the owners did a quick patch up and said nothing.

I also had a "professional inspection" done by some cretin who failed to notice some of the very obvious flaws in the Las Salvias house. In fact it was put in as a condition of sale that these items be corrected prior to closing. Needless to say that did not happen. Then a whole lot of other dirty tricks came into play, and we received, as I said threats of bodily harm.

Having said all that it is truly amazing that we stayed in this country at all. BTW we paid 220,000 for this house, and less than a year later received a firm offer of 300,000 as is. We opted to stay and remedy the problems.

It has been a very much worthwhile project in our opinion. The house is now pretty close to perfect, we have solved all the problems and it is now quite similar in size and lot size to the house currently for sale at 749,000.
The best thing is that at the time there were building materials available which are only custom order today. The other benefit is that since it was built prior to the Raquet Club and its rules it goes lot line to lot line. It could never be duplicated in this location today using the same materials and only on one lot, keeping the fees low. One would need two lots, custom ordered materials, so, your guess is as good as mine what it would cost. today, It has no comparables and is a truly unique home. I'm not into faux this and faux that I like the real thing. Many people would not appreciate this home, so we won't sell it.

by Jim W Fri Jan 04, 2013 6:41 pm

We bought our home late 2005, Got the Inspection, closing went great. Now 7 years later that the property tax statement and deed show that we purchased a 312 sq. mtr. home....actual size 412 sq. mtr, as advertised @ time of purchase....no I didn't measure, didn't care, liked it bought it. Now in trying to correct deed and Tax statement, are looking @ back taxes and penalties. According to agent all taxes and penalties are calculated back to the date of purchase

IT NEVER ENDS IN MEXICO. Basta

by E-raq Fri Jan 04, 2013 6:59 pm

Jim W wrote:We bought our home late 2005, Got the Inspection, closing went great. Now 7 years later that the property tax statement and deed show that we purchased a 312 sq. mtr. home....actual size 412 sq. mtr, as advertised @ time of purchase....no I didn't measure, didn't care, liked it bought it. Now in trying to correct deed and Tax statement, are looking @ back taxes and penalties. According to agent all taxes and penalties are calculated back to the date of purchase

IT NEVER ENDS IN MEXICO.

Well Jim FWIW our lot is actually 1200 meters, but hey, who's counting. Never even looked at the house size, however its probably one helluva lot bigger than stated as well. No matter we're not selling so it doesn't matter in the least.

by Jim W Fri Jan 04, 2013 7:23 pm

Raq, we listed and must deal with It. Point is the Notary got paid his 5000p and didn't dot the EYES so to speak. Our taxes last year, and probably everyone else are a "joke" compared to NOB. I think ours after discount were 1950p. Just dealing with this is a royal PIA!

Our neighbor lost her husband last year, and had to remove him from the deed. They didn't have much, but when all was said and done, her cost after they re measured, North of 20,000p. A tough nut when she was living on 10,000p....per month.

by joec Fri Jan 04, 2013 7:38 pm

JimW - Join the crowd. Chapala is always looking for more $$$. We had to have our house measured too and the same thing happened. We thought it was about 3,400 sq ft, turns out it is 4,672 sq ft. We'll just hafta suck it up and pay the back taxes before closing.

by CheenaGringo Fri Jan 04, 2013 7:56 pm

CB:

I may be wrong but I don't think Brad G. was there 13 years ago? Have no idea what the regs are in Canada but with the exception of a very few States in the US, there isn't any licensing or required education for someone wishing to call themselves home inspectors. Some States do require education and licensing to be able to conduct lead, pest or radon testing but even that is spotty. Speaking of radon, as a licensed NM tester, I would be willing to bet that if I were to bring 100 radon test kits and placed them in homes around the Lake, they would reveal 70 to 80% positive readings and probably 60% of those at dangerous levels?

Jim:

Being that you have a home in AZ I would think that you are aware that there are often few guarantees in the desert SW. Going back a number of years, I invested in a planned housing development in Ruidoso, NM geared to the Texans. After 18 months of marketing, I had realized 15X my initial investment in returns and it was scheduled to be a 10 year payback. Even with "title insurance", the Mescalero Apaches came up with a claim to the property from an old treaty. Long story short, we were sued by people we had sold property to and the judge ruled that we had 90 days to return all monies paid for lots in the development. No coverage from our title insurance and now over 30 years later, not a dime! The moral of the story: there are no guarantees.

by Jim W Sat Jan 05, 2013 8:07 am

joec wrote:JimW - Join the crowd. Chapala is always looking for more $$$. We had to have our house measured too and the same thing happened. We thought it was about 3,400 sq ft, turns out it is 4,672 sq ft. We'll just hafta suck it up and pay the back taxes before closing.

John, according to our realtor, Chapala started including all finished, uncovered living space, ie, pool/patio area in construction size, sometime in 2011-2012. Now @ time of sale will backdate to the time of your home purchase. Basta

by Sponsored content