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Very sobering report

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gatosigi
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Post by mudgirl Sat Mar 25, 2023 7:43 pm

Dint?
Yearly flue shit?
Hard to take anyone seriously who can't spell 3-4 letter words in their native language.

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Post by Mexicoafterlife Sat Mar 25, 2023 7:54 pm

Was typing while the wife was driving on phone with glare. Wow you put so much towards that but not what was said. If you can't figure out what was being said I understand your critical thinking skills are low.

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Post by gatosigi Sun Mar 26, 2023 9:46 am

Thanks jreboll for linking this interesting talk. One important takeaway is the likely increase of Mexican economic activity due to nearshoring for the USA as Mexico's labour rates are becoming more competitive in relation to China. Some of us have (or had) become used to improving exchange rates for our US or Canadian dollars. But both the US and Canadian dollars have been trending down since June 2020 and look like they are heading to be lower than July 2017. Combine this with Mexico's inflation and we may have to be a little more careful in our spending.


Last edited by gatosigi on Sun Mar 26, 2023 9:47 am; edited 1 time in total (Reason for editing : clarity)

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Post by Mexicoafterlife Sun Mar 26, 2023 11:55 am

Well take advantage. A savings account here pays 7% and a 60 day what we would call CD is 12%. Good time to invest in the country you live in. I know a ton of people now that are looking at getting residency to just get a bank account and get the super high interest rate returns down here like I am.

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Post by CanuckBob Sun Mar 26, 2023 12:14 pm

Mexicoafterlife wrote:Well take advantage. A savings account here pays 7% and a 60 day what we would call CD is 12%. Good time to invest in the country you live in. I know a ton of people now that are looking at getting residency to just get a bank account and get the super high interest rate returns down here like I am.  

Yep, and then the pesos can crash 10% or more overnight wiping out any interest you may have earned. Don't forget the 16% iva that also comes off the interest payments. No thanks. I consider my investment in real estate here to be probably the safest. I wouldn't put any serious money into Mexican banks or investments.

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Post by Mexicoafterlife Sun Mar 26, 2023 12:30 pm

Real estate I don't like because it's not liquid. And the same reason I won't buy a house here yet. OK let's say I pay 300k for a house..... That I could rent for 1200 month usd both. 14400 year rent. 300k at 12% is 36k a year! 2x the money and that doesn't bring in property tax, water bill and maintenance I don't pay.

After being here almost 2 years I see the property market is so over priced it's cheaper to pay rent and invest said money I would put in a house for a higher return. Taxes are not going to eat that over 20k usd profit of investing the money over using it to buy a way overpriced house (compared to the cost to rent said house). And I don't live in someone else's Casita. I live in a 3 bed 2.5 bath house with it's own walls lake and mountain views in rancho del oro. So I make no sacrifices at all and I have alot more more money for it. And let me know if what I heard is right... Rent tax is 35% here so a 1k rent you walk away with 650 of it? Don't see how anyone sees renting as a good thing. But please tell me what I heard is wrong about rent tax here.

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Post by mudgirl Sun Mar 26, 2023 1:18 pm

Rental tax isn't 35% in Mexico. Don't know where you came up with that erroneous figure. On an Airbnb or other str platform the guest is charged the IVA of 16% and the state occupancy tax of 3-5% (varies by state). The landlord/host pays 4% income tax on the profits.

Of course, you also have to report your income in the US or Canada, at whatever rate they charge, but as there is a tax treaty, whatever tax you paid in Mexico is deducted from what you owe up north.

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Post by Mexicoafterlife Sun Mar 26, 2023 1:32 pm

mudgirl wrote:Rental tax isn't 35% in Mexico. Don't know where you came up with that erroneous figure. On an Airbnb or other str platform the guest is charged the IVA of 16% and the state occupancy tax of 3-5% (varies by state). The landlord/host pays 4% income tax on the profits.

Of course, you also have to report your income in the US or Canada, at whatever rate they charge, but as there is a tax treaty, whatever tax you paid in Mexico is deducted from what you owe up north.

A man told me at a restaurant. Didn't believe it why I asked about it. Still real-estate isn't worth it rent wise with the cost to rent ratio down here esp with the high return intrest you can get here.

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Post by ferret Sun Mar 26, 2023 6:12 pm

Do not invest in Mexico any more than you are prepared to lose. When we came to Mexico it was shortly after the peso devaluation of December '94 and the interest rate was FORTY-TWO PER CENT in January of '96. Really tempting but don't put all your eggs in one basket because things can change in a hurry.
Real estate IS the best bet but I would caution buying real estate ONLY for the purpose of renting it out. If it's part of your normal residence, like the room that Mudgirl rents out or the casitas that CBob rents out then fine. You have to have somewhere to live anyway. Renting a home here (or anywhere in the world) to live in is lining other people's pockets with money.
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Post by Mexicoafterlife Sun Mar 26, 2023 6:36 pm

ferret wrote:Do not invest in Mexico any more than you are prepared to lose. When we came to Mexico it was shortly after the peso devaluation of December '94 and the interest rate was FORTY-TWO PER CENT in January of '96. Really tempting but don't put all your eggs in one basket because things can change in a hurry.
Real estate IS the best bet but I would caution buying real estate ONLY for the purpose of renting it out. If it's part of your normal residence, like the room that Mudgirl rents out or the casitas that CBob rents out then fine. You have to have somewhere to live anyway. Renting a  home here (or anywhere in the world) to live in is lining other people's pockets with money.

I showed you the math. Investing it is better than buying 2.5x better. And that does not include the taxes, water bill, and upkeep of the property. The home prices compared to rent is super out of whack here. If I can make 44k usd a year with the money it would take to buy the house I am renting for 1200 usd a month, then I am making over 20k usd more than I paid rent. No place in the USA has rent compared to buy this messed up. If they changed the rent to match the price they say a house is worth here no sane person would ever rent here. The going rate for cost of house too rental price is 1k Month per 100k value a month. You can find that fact all over the internet.

And also every business person knows you don't lock away money in a place you make less. Now if I bought a big enough place where I wanted to rent out I would have too see how much per month work the average occupancy rate % and see if it's more than just watching it grow in a 60 day CD at 12%.

And really I'm more scared the usd will dump long before I am the peso. If the take oil status reserve from the dollar it will tumble. While every company I see is investing (on shoring) in Mexico. The growth here looks huge compared to the USA and the usd.

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Post by mudgirl Sun Mar 26, 2023 7:06 pm

There are reasons why people want to own the home they live in that have nothing to do with return on investment.
I lived in plenty of rental houses and have no desire to do so again. I want a home that I have the freedom to make modifications on as I see fit, create my own garden, furnish as I like.

Expenses in owning a home here are a pittance. My electric bills are never more than 125 pesos per month, propane costs me about 1500 pesos/year, water is 1100 pesos/year, and my property taxes are a whopping 625 pesos/year.

My lot and the cost of building my house was about $200,000. I've lived here 16 years, so that works out to just over $1000/ month. That I haven't put in anyone else's pocket. So if and when I eventually sell, it will all be profit, compared to if I had rented all this time. If I can sell my place for $300,000 tomorrow, which I could, I've made 100,000 profit over what I paid, and had a free place to live for 16 years, so I would have made $300,000 profit compared to if I had been paying $1000 rent a month.

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Post by ferret Sun Mar 26, 2023 7:48 pm

Mudgirl... YES. You rock girl!
MexicoAfterLife... Sigh. You who are so knowledgeable about Mexico having lived here... how long?
If the U.S. tanks, Mexico tanks. Period. 2008. I have bought and sold two houses in Mexico. Doubled the value on both. Upkeep? Really? Pittance compared to NOB on water, taxes, and electricity if you have solar. Even if you didn't double your money and sold it for what you paid for it, people always forget that they didn't pay rent during ownership which is also profit.
I am now in my third house and have been since May of 2016. We were renting while my hubby was ill in La Huerta and the rent was $1200 U.S. per month in 2015. Seven years of not paying rent 1200 x 84 = $100,800 U.S. dollars. and I didn't take into consideration that the rent on that La Huerta house has gone up by 300 U.S. a month.
I am at break even on the purchase and my expenses are about 5,000 pesos A YEAR and the house has gone up in value as well.
You do your math. I'll do mine. I purchased this house to make sure that I didn't end up scrambling to find another place when an owner decided to sell or kept increasing the rent. I am in complete control of what I want to do here.
And I'm 72 this year so you still have lots of time to learn and make mistakes. I do not.
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Post by RickS Sun Mar 26, 2023 8:02 pm

Rent vs Own... almost always comes out better to own. BUT especially in a land where mortgages are few and far between the capital to own these days is hard for some to come by.
Does anyone know the 'average cost of a home' at Lakeside is these days? Not a condo.... a house. My GUESS is north of $300,000 US. Maybe even $400k.
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Post by ferret Sun Mar 26, 2023 8:39 pm

There are an incredible number of variables that you didn't address Rick. Location being the main one. Views? Gave up on those because nice during the day and the black hole of Calcutta at night on the other side of the lake or until somebody blocks it. You have to keep your eye on the listings. https://chapalamls.net/en/properties/recently-added
The Malvas listing in Mirasol showed up yesterday. Today it's sold. The house beside me (the two year old new VERY badly constructed house) was bought for $229,000 last year and just sold for $317,000 in two days after some superficial cosmetic changes were made.
It depends on where you want to be and I still think there's incredible value in Brisas and Chapala Haciendas. I specifically chose a small house that was built before 1997 with good solid construction but I like the old fashioned style and am not a fan of the sleek modern stuff that they're building now. Each to his/her own.
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Post by RickS Sun Mar 26, 2023 9:02 pm

Yes...of course. LOCATION LOCATION LOCATION.
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Post by ferret Sun Mar 26, 2023 9:25 pm

So what's your preferred location? If you use the "Search" function in the MLS link I gave you, then Advanced Search. Do not fill out anything else but click on Subdivision and pick and choose individual ones that are of interest to you. You will find a plethora of information available to you.
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Post by CanuckBob Mon Mar 27, 2023 7:20 am

My house is worth over double what I paid for it in 2012. I have earned more than I paid for my house in rental revenue, and I have saved around $180K in rent. This is the same situation with every house I have ever owned. Yes, location is the most important.

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Post by rafterbr Mon Mar 27, 2023 5:02 pm

When we came here 8 years ago we rented a house in La Floresta and after 2 years bought a house in Riberas because I didn't like the La Floresta prices. Now after 6 years with all the build up of business in Riberas, I'm not sure if I don't now prefer it to La Floresta. I can walk to everything we need. We have a beautiful garden and the house is worth at least $100,000 more than we paid for it.

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Post by wanderer Sun Apr 16, 2023 10:37 am

i cant speak for any VA care except central texas veterans health care system, austin temple waco etc, but my experience there has been excellent. i turned down medicare when i turned 65 and have been with the VA since april of 98. i am a combat zone vet with no disabilities and i pay a copay for all my meds and care but its very small. i am also covered for emergency life threatening care at any hospital in the US as long as the VA is notified within 72 hours of admission and i am moved to a VA facility as soon as im stabilized. in 2019 i needed a quadruple bypass and was sent to community care where the VA authorized top line care private care at no cost to me. i did owe a small copay but was never billed even after asking about it. the doctors and nurses there seem to go out of their way to provide great care, for me anyway.

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