Las Villas de Mexico: Investors eye upscale homes in Mexico
By Charles Greenfield
cdgpm@bellsouth.net
With the anemic U.S. housing market it is no wonder that savvy investors and travelers are searching south of the border for dollar-friendly currencies and reasonably priced construction and land purchases. While lending practices here have reached a crisis level in terms of the subprime mortgage market, in Mexico loans are arranged on a far more conservative basis with fixed interest rates, up-front fees of up to 3%, down payments between 10%-20%, credit/risk analysis on all mortgages, and even unemployment insurance. According to BusinessWeek, housing costs in Mexico between 2000 and 2006 increased under 7% annually compared to nearly 18% in the U.S. A Mexican mortgage company Infonavit even offers credits for homes furnished with solar water heaters, energy-efficient lightbulbs, and other conservation measures. For American “baby boomers” investing in upscale Mexican housing can make sense and afford a profit if analyzed beforehand.
On a recent trip to Cancún I visited the construction site of Las Villas de Mexico (Puerto Cancun), a second-home destination targeted towards American and Canadian investors with full ownership home sites, lifestyle amenities and services. As part of the Homex tourism division (HXM on the NYSE), one of Mexico’s biggest homebuilders, Las Villas is in the first stage of a massive national development that was launched recently in Cancún, Los Cabos and Puerto Vallarta. Future phases will include over 20 resort communities : Encenda, San Miquel de Allende, Lake Chapala, Riviera Nayarit, Ixtapa, Acapulco, Huatulco, Loreto, Mazatlán, and Valle de Guadalupe, among others. Villas, townhomes, and condominiums range in size from 1,900 to 2,200 sq. ft. and reflect the indigenous regions. The architecture features materials and styles characteristic of the different Mexican states like palapa (palm) thatching trim from the Cancun region. You can even have your front door carved from wormwood or mesquite by a local carpenter. Other communities will integrate the ambiance of a mountain village in Lake Chapala, an artistic community life in San Miguel de Allende, and naturally, beach and marina seascapes in Cancún or Los Cabos.
Amenities for foreign investors are on par with upscale communities in the U.S., but has some surprising differences. Las Villas de Mexico will offer membership in six homeowners’ concepts: The Sunstone Clubs of Mexico has beach and country club amenities; The White Sand Spas of Mexico offers signature treatments and traditional healing practices; Si! Lifestyle Concierge arranges marlin or tuna fishing off Los Cabos or a hard-to-get reservation in a Cancún restaurant; Opendoor Property Exchange is a novel way to trade homes for vacation stays in the Las Villas de Mexico network of destinations; CasaCare Property Services guards your home during your absence, pays utilities and taxes, cleans your villa and waters your plants; and Whole in One offers golfers a partnership with the best country clubs in their region.
Las Villas de Mexico sells home ownership, not timeshares or fractional ownership. Title ownership for foreigners is called fideicomiso that consists of a 50-year renewable trust in restricted zones. U.S. title companies handle title insurance and escrow services; both American and Mexican lending institutions will work with qualified buyers. (Villas, townhomes and condos can be placed in a rental arrangement.) Like U.S. construction companies, Las Villas de Mexico accepts funds based on the pace of the construction process with your escrow company acting as the third party. On completion an acquisition tax of 2% is required at the closing while annual property taxes cost about $500 for a $500,000 unit or .001%. Units at Puerto Cancun will start off at approximately $500,000.
As a magnet for baby boomers with its temperate climate, moderate cost of living, rich cultural life and cuisine, and above standard medical facilities/clinics, Mexico is the seventh most visited country worldwide with 13 million tourists. By 2030 there will be 57.8 million boomers still active with an estimated 5% drawn to Mexico. Homex, awarded Latin America’s most prestigious prize for corporate governance standards (literacy programs for all its workers), has increased its homebuilding units from 4,756 homes in 1999 to 51,908 in 2007. To capture some of that rich market the company has incorporated the best of modern turn-key building techniques with models from the U.S. upscale gated community and resort industry. Not only have brand name and design packages been planned for the interiors, but medical facilities, green areas, convenience stores and veterinarian clinics are attached to the communities.
Other amenities include: exercise facilities, lockers and day rooms, pools with swim-up bars, gift shops, valet parking and concierge service, kid’s areas, fire pits and bbq’s, and libraries. In their White Sand Spas package clients can purchase day spa packages, enter dietary training and use their dermatology facilities. If you are in the U.S. their CasaCare account representatives will pay your bills, copy them on-line, store all printed records, secure credit cards and translate documents into English. Homex also encourages its future homeowners to participate in the local community with outreach to charities, youth groups, artisans as well as facilitate your starting your own business in Mexico.
For information contact: Brett Sawyer @ 1-818-800-3894.
