Real estate in Mexico and Central America

The real estate business in Mexico and Central America is different from the way that it is conducted in the United States.Some similarities include a variety of legal formalities, (with professionals such as real estate agents generally employed to assist the buyer); taxes need to be paid (but typically less than those in U.S.); legal paperwork will ensure title; and a neutral party such as a title company will handle documentation and monies in order to smoothly make the exchange between the parties. Increasingly, U.S. title companies are doing work for U.S. buyers in Mexico and Central America.

The legal arrangement for the right to occupy a dwelling is known as the housing tenure. Types of housing tenure include owner occupancy, Tenancy, housing cooperative, condominiums (individually parceled properties in a single building), public housing, and squatting. Variants include timeshares and cohousing.

In recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich or poor, a significant fraction of the total wealth is in the form of land and buildings.In most advanced economies, the main source of capital used by individuals and small companies to purchase and improve land and buildings is mortgage loans (or other instruments). These are loans for which the real property itself constitutes collateral. Banks are willing to make such loans at favorable rates in large part because, if the borrower does not make payments, the lender can foreclose by filing a court action which allows them take back the property and sell it to get their money back. For investors, profitability can be enhanced by using an off plan or pre-construction strategy to purchase at a lower price which is often the case in the pre-construction phase of development.

When the lender decides to forgive all or a portion of your debt and accept less, the forgiven amount is considered as an income for the borrower and is liable to be taxed. However, after the signing of The Mortgage Forgiveness Debt Relief Act of 2007 by President Bush, amendments have been made to remove such tax liability and allow the borrower and lender to work freely together and find a common solution that is beneficial to both the parties

Are there any up front costs?
No, however, we require the owner to reimburse EJF for advertising and for any repairs performed on the property as the expenses are incurred.

When do you mail the owner's check and statement?
Owner's checks and statements are mailed on or before the 1st day of every month.  The check and statement reflect activity in your account for the preceding month. 

Do I loose control of my property once you start to manage it?
No.  We work for you.  We allow you to be as involved or uninvolved in the management of your property as you would like.

If my property is vacant, do I still pay a management fee?
No.  Management fees are only earned when rent is collected.  No fee is payable when your property is vacant. 

Can you send or wire-transfer my funds to my bank?
Owner's funds may be sent directly to any bank account the owner chooses at no additional cost.

What if I want to use my repair people?
An owner may use their own vendors as long as they meet our criteria and carry the necessary insurance and licenses.

How do I know you won't spend large sums of money?
In the management agreement, we set a dollar amount which cannot be exceeded without owner approval except in cases of emergencies. 

How do you determine the rent amount?
We use many tools to determine the appropriate rental rate for your property.  Primarily, we rely on our vast experience with leasing similar properties.  We also conduct a comparative market analysis to determine what other similar properties are receiving in rent.  

How long will it take to lease my home?
Homes typically rent between 30-45 days.  The condition of the property, overall strength of the rental market and the rental price all have major impacts upon the speed by which the property rents.

How much security deposit do you collect?
Typically, the deposit is the same as one month's rent.

Who holds the tenant's deposit?
The tenant's deposit is held in an interest bearing escrow account administered by EJF in accordance with jurisdictional requirements.

How do you find a tenant?
We use signs, flyers, newspaper classified advertising, word of mouth, the internet and the Multiple Listing Service to find qualified tenants.

How do you determine if a tenant is qualified?
Residents must pass EJF's thorough application requirements.  We verify credit, rental, employment and criminal history on each adult applicant.

What if a tenant doesn't pay?
Rents are due on the first and become late on the 5th.  If the resident has not responded by the 20th, we initiate the eviction process.

What if the tenant does damage to my property?
The resident will be responsible for all damages beyond normal wear and tear.  If the tenant does damage to your property, money will be held from their security deposit.  If the cost of repairing the damage exceeds the amount of the security deposit, you can sue for the additional amount owed.

How often do you check the condition of the property?
Interior condition surveys are typically done once per year.  Other checks may be performed if a vendor notices something "unusual" at the property.

What happens when a tenant gives notice to vacate?
We verify that the tenant has provided proper notice.  If they have, we inform you that the property will be coming vacant and, with your consent, we begin looking for a new resident.  We survey the condition of the property and start any preventive maintenance or repairs need.Tapestries

What do you do if the tenants are not taking care of my property, or you discover unauthorized pets?
We immediately contact the tenant and give the tenant an opportunity to correct the situation.  Usually they will.  If the problem persists, we will make a decision based on that specific situation which includes filing for eviction. 

Do you pay the bills for me?
We can pay your insurance, mortgage, homeowner's fees, etc. There must be sufficient cash flow from the property to cover such expenses and we will ask you to set-up an additional reserve fund for this purpose which will allow us to make prompt payment for you without waiting for the rent to arrive.

Do you insure my property when you manage it?
No.  You maintain your own insurance coverage.  However, we will gladly recommend insurance companies interested in writing insurance on your property.

Do you handle problems late at night and on weekends?
Yes.  Our automated 24-hour emergency line answers all calls and will page us in case of an after hours emergency.  We will talk with the tenant to determine how best to proceed.  Many times we can solve the problem over the phone, saving you the cost of an emergency repair. 
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