FAQ`s

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Gea Real Estate Frequently Asked Questions

We have summarized the most frequent scenarios and doubts that our clients have when purchasing Real Estate in Mexico. 

General Questions

 

How do I find a Real Estate Advisor? 

Gea Real Estate provides professional assistance in finding the right property for you in Mexico. Buyers and Renters receive a full range of services that begin by assigning one of our real estate advisors according to your language and particular needs who will guide you through the selection process of your desired home while protecting your interests and accompany you through the purchase and legal process. Client care is our most important way of doing business. Our experienced group of real estate advisors know the Riviera Maya, its market tendencies, its past and future development and zoning very well. They have chosen to call the Riviera Maya home and live and work here full-time.

How do I find the right property? 

You can freely browse our listings at gearealestate.com and create a user profile that will allow you to select and save your favourite properties. You can also sign up for our newsletters where you will receive news about our listings, market tendencies and useful information about the Riviera Maya. After leaving your contact information on our website, a real estate advisor will contact you, perform a survey to understand your needs and guide you throughout the selection process. Once we have narrowed down your options the real estate advisor will schedule an appointment to visit the properties that suit your interest and budget. 

Do you provide transportation services? 

Yes, we provide transportation services from and to the airport as well as car rental at an additional cost through third-party companies. -While visiting the properties with a real estate advisor the transportation is complimentary. 

Do you provide lodging services? 

Yes, we do provide vacation rental options from our listings and hotel stays through our access to Expedia at an additional cost. It’s recommended that you stay at a non-all-inclusive location when visiting properties for purchase purposes.  

Can I list my property in Gea real estate for sale? 

Yes, you are welcome to list your property with us.  Please contact us, and we will send you a format to fill in with your information and the property to list. Our fee is 6% plus marketing costs of the purchase price once sold. We will require quality photographs, detailed information, floor plans and a listing agreement. 

Can I list my property in Gea Real Estate for Rent? 

Yes, you are welcome to list your property with us. Please contact us, and we will send you a format to fill in with your information and the property to list. Our commissions are equivalent to ½ value of a full month net rental for short-term rentals (less than a year), the value of a full month net rental for long-term rentals (a year or more) and 25% for vacation rentals.      



Foreigner Questions

 

As a Foreigner can I own property in Mexico? 

Yes, non-Mexicans may obtain direct ownership of property in the interiors of Mexico. In the Riviera Maya, it is important to acknowledge what the Mexican law states:  properties within 50 km of any oceanfront and 100 km of any border must be acquired via a bank trust or the establishment of a Mexican Corporation. 

What is a Fideicomiso or Owners Trust?

In the coastal and border zones of Mexico, (100 kilometers from the border and 50 kilometers from the coast) a foreigner may purchase real estate by means of a Fideicomiso, commonly called a Trust. The Fideicomiso is a 50-year, renewable bank trust granting a foreign Buyer the right to use, enjoy, improve, rent, sell or otherwise enjoy the property. The Foreign Buyer is called the Beneficiary of the Trust. As the beneficiary, you retain all ownership rights and responsibilities to the property and have the right to sell, lease, improve, mortgage or will the property to your heirs. 

Can the Fideicomiso title be in my language?

The Fideicomiso is drafted and executed in Spanish; however, you can request for a certified translation at additional cost and some developers will include a certified translation of this document in English.

Can the purchase agreement be in my language?

Yes, we normally have agreements in both English as an international language and Spanish. If your preferred language is another we can certainly request for a translation at an additional cost.

Who is the trustee bank and how do I select one?

The Trustee is the Mexican Bank authorized to act as a Trust or “Fiduciario” which must be a Mexican financial institution with an established trust department. You have the freedom to select any qualified Bank as your Trustee, we normally suggest BBVA-Bancomer, Scotia Bank, HSBC or Santander, however there are other options available; -It’s worth mentioning that the properties held in trust are not assets of the bank and in the rare case that the bank goes into financial difficulty, the property is transferred to another trustee bank. 

What is a Notary Public?

A Notary in Mexico known as a “Notario Publico” is an attorney, certified by the Mexican government to act as an official and impartial representative of the government who performs the authentication of legal documents and is responsible for ratifying all real estate transactions. The Notary is equally responsible to both Buyer and Seller, ensuring the legality of the transfer of title, to calculate and retain seller’s capital gain tax, collect the acquisition tax, coordinate appraisals, certificates of no liens, certificates of no debt and request all corresponding permits and records the transaction at the Public Registry and at the Cadastral Office (Tax Office). For this service, the Notary charges a fee based on the value of the property.

 

Visas and International Considerations for Foreigners

 

Do I need a Temporary Resident Visa to buy property in Mexico?

Anyone, even someone in Mexico on a Tourist Visa (180-day period), may buy a property. It is stated that if you sign a contract, rent a house, buy a home, or lease property, you are no longer a “tourist” and therefore, are invited to apply for a Temporary Resident Visa. But in order to acquire property, it is not necessary to possess a Temporary Resident Visa.

What are the different types of Visas in Mexico? 

Tourist Visa 

Is the visitor’s Visa obtained when first entering Mexico wish can be renewed continually by simply leaving Mexico within the 180 days. 

Temporary Resident Visa

This type of Visa is for foreigners who live part-time in Mexico. To be granted a Temporary Resident Visa status, you must prove you have sufficient resources to be financially independent, work or own a business in Mexico. 

Permanent Resident Visa

This document is for foreigners who reside in Mexico. In order to apply for a Resident Visa you must have four years as a holder of a Temporary Resident Visa, Permanent Residency allows you to enjoy most of the rights and privileges of a Mexican citizen, except the right to vote. As an Immigrant, you are not required to give up your native citizenship, you may freely work and remain in Mexico without annual renewals of immigration papers.

 

Financing Real Estate in Mexico for Nationals or Foreigners

 

As a foreigner is it possible to receive a mortgage loan in Mexico?

Yes, as a foreigner, it’s possible to obtain a mortgage loan in Mexico. However, the process and terms might differ from what locals experience. Some banks and financial institutions offer mortgage loans to foreigners for purchasing property in Mexico. Generally, lenders might require a larger down payment compared to what residents need to put down, and interest rates might also vary. It’s advisable to consult with financial advisors or banks familiar with lending to foreigners in Mexico to understand the specific requirements and conditions.

What are the costs of the Trust or Fideicomiso for foreigners?

The payment of fees for the permission granted by the Ministry of Foreign Affairs for the constitution of the trust has a cost of approximately USD 400 or 13,910 MN plus VAT which is paid annually, it is always important to check prices as these may vary.

What is a mortgage loan?

It is a long-term loan (5 to 20 years) that finances a bank or housing agency for the purchase of real estate, here in Mexico normally with interest rates from 9% to 14% according to the banking institution and credit history. This credit is backed-up by the value of the property.

Budget for mortgage credit?

The budget to be allocated for the payment of credit should not be greater than 33% of your monthly net income since it is necessary to consider that when contracting a credit, that amount must be paid for several years. The down payment ranges from 10% to 15% of the value of the property, which is not financed. In general, we recommend that approximately 12% of the value of the property to be estimated for notary expenses, property appraisal and credit approval, just to be safe; notary expenses range from 4.5% to 7% of the value of the property, the valuation by the bank has an average cost of 3,500 pesos per million pesos of the value of the property and the banks will charge between 1% to 1.5% on the amount of the credit for granting a loan.

What is the best Mortgage Credit Loan?

There are a variety of credits and banking institutions as well as temporary promotions that improve interest rates or include initial expenses. Our consultants can help you decide the offer that best suits your family’s needs and budget at the time of the request to obtain the most flexible and accessible credit.

What are the factors to determine Credit?

The variables to consider are the source of income, level of indebtedness, credit history, age, term, participants in the loan, amount of the down payment, deed costs, co-financing, marital status of the borrower, interest rate, costs of administration, insurance, etc.  Making each credit unique and creating a profile that allows financial institutions to consider the best credit options.

What is the Total Annual Cost (CAT)?

it is a standardized measure of financing cost, expressed in annual percentage terms that, for informational and comparison purposes, incorporates all the costs and expenses inherent in mortgage loans (interest rate, opening fees, appraisals, credit study, administration fees, life and damage insurance) granted by the institutions in accordance with the Bank of Mexico (Banxico).  

What are the differences between a sale and a trust?

Although from the legal point of view, they are completely different, the truth is that from the practical point of view, there are no important differences, except for the participation of a fiduciary institution that will be the one that holds the registry property for the benefit, sole and exclusive use of the person who has acquired the real estate. The trust contemplates a clause for hereditary purposes. Automatically, and through a public deed, the ownership of these rights will be transmitted in favour of the beneficiaries who were appointed at the time.

 

Important Legal Aspects

 

What are the legal requirements to sell a property?

As part of our work at Gea real estate, we ensure that all properties listed have the legal requirements prior to listing inventory and as part of our advice we will ensure that all documentation is submitted at the time of signing in front of the Notary.

The documents necessary for the commercialization of Real Estate in Mexico are deeds, property paid from the last year (which match the surface data and official number with what it says in the deed), certificate of lien release no more than 30 days, payment of the last water bill, payment of the last electricity bill, in case of condominium that the payment of the maintenance fee is up to date, if the property is inside a condominium and has exclusive parking spaces that they are listed in the property deed, that the services of the property such as gas, telephone, electricity, cable television, internet, are paid or that the procedure of change of address is made and in relation to taxes to the owners they are responsible for paying the income tax, and to the buyer the taxes that are generated by acquisition in addition to the Notary’s fees.

What is the ISAI Tax?

At the time of buying a property, the Property Acquisition Tax (ISAI), also called the Domain Transfer Tax or Property Acquisition Tax, must be paid, which is local and variable under the laws of each State. The proceeds of the different entities normally reach 2% and are calculated on the highest value of the operation; however, (this changes according to the State of Mexico, for example, in some cases, it can be 5.6% ”. 

For example, if a property whose value is one million pesos is purchased and the value of the ISAI in that entity is 4.5%, 45,000 pesos must be paid; but if it had a value of 20 million pesos and the tax is 5.19%, the tax will be for one million 38,000 pesos.

What is the ISR Tax?

Individuals who sell a home cause “Impuesto Sobre la Renta” ISR or Income Tax for disposal of a house, so if the sale value is maximum 700,000 Investment Units (UDIS) – equivalent to approximately four million pesos – they can exempt the payment of the tax.

What are the rights and obligations of a Real Estate purchase contract?

It is the buyer’s right to know all the information clearly and precisely concerning the acquisition of their future property. This information generally includes: the size of the land, the age of the construction, measurements of the rooms and other structural and architectural aspects of relevance. Another important right of the buyer, which also functions as the right of the seller, is that, in the clauses of the contract of sale, the total value of the property must be included (generally validated by a real estate appraisal), the price to be paid to acquire it and the monthly amounts of the mortgage loan (in case of having this support). 

The buyer must make the necessary contributions on time, so as not to breach the contract and fall into faults that bring financial and personal consequences. This clause of the contract of sale of property, must include the monthly amounts to be paid, fines and penalties for not making the payment, and the legal or financial consequences derived from this. Likewise, in this legal document all taxes payable and assigned to the corresponding part must be included. That is, the buyer must pay taxes such as the ISAI, or Property Acquisition Tax, while the seller must declare the ISR, or Income Tax.

What documentation should be presented for the acquisition of a Real Estate?

Official identification (IFE, Permanent Residence and Passport), a form of payment or letter of credit authorization, official identification and birth certificate of you and the spouse in case of joint credit, marriage certificate, in case of having credit jointly as well as any other document required by the Public Notary to validate the sale of the Real Estate.

What are the Steps of the Purchase Process? 

  1. Select the right property for your future home or investment per your budget with the guidance of our real estate advisors. -We strongly recommend visiting the property with our agents before making a final decision.  
  2. Once the property has been selected the seller will send all necessary documents, conditions and requirements to you and us. 
  3. Negotiate the contract and the price.
  4. Let us know you’re ready to reserve or to write a proposal including the price, its terms and time. 
  5. The Reservation normally represents a full deposit of the required down payment (10% to 30%) or partial deposits with a commitment to complete the deposit in 30 days in order to hold the property. In some developments it may differ.
  6. Within the selected time period the offer is accepted, rejected, or a counter-offer is made.
  7. The earnest money is normally made out to the Notary, the sellers listing Real Estate agency or into an Escrow Account.
  8. Contract signature at the “Notaria”, either personally in Mexico or through an authorized representative. 
  9. You become the owner of the property and it’s registered in your name in the Public Registry of Property and Commerce of Mexico.

What is an Escrow account? 

Being in escrow is a contractual arrangement in which a third party (the stakeholder or escrow agent) receives and disburses money for the primary transacting parties, most generally, used with plentiful terms that conduct the rightful actions that follow. The disbursement is dependent on conditions agreed to by the transacting parties. In Real Estate an Escrow is used to make sure the funds of a transaction change hands at the moment of closing. If you are a buyer, you want your funds in the seller’s account only once the deal closes –not before. 

Is Escrow required in Mexico to close a Real Estate Transaction?

No, but many people use Escrow in Real Estate transactions nowadays as a safe and efficient manner to transfer funds between a buyer and seller, instead of depositing directly into the seller’s account, before the beginning of any closing procedures or any due diligence being conducted. 

What happens if I decide to cancel after making the offer?

On some occasions, a penalty amount is retained by the seller. If there is a penalty for cancelling; it is noticed on the seller’s offer. If you are using an Escrow, the account is forfeited. 

Is an Attorney needed? 

No, however, some lawyers specialize in Real Estate transactions and their legal counsel is always welcome to ensure all transactions and documentation are involved. 

Can I hire an Attorney from my country or do I need to hire one from Mexico?

Mexican laws and practices regarding Real Estate differ from your country’s laws and to have legal representation your lawyer must be an active and licensed practitioner in Mexico. However, you are always welcome to ask your lawyer back home for legal counseling. If you are an investor, we suggest hiring competent Mexican lawyers when contemplating any Real Estate acquisition.  We have a list of trusted Attorneys that we normally work with and recommend. 

 

If you are going to Rent your Property

 

Is it easy to Rent my Property in Mexico? 

Yes, Mexico is one of the world’s most-visited countries and due to its popularity is one of the largest markets for second homes owned by foreigners where the law is flexible to do so as well. Leasing a Property is very popular amongst Mexicans and Foreigners. The touristic destinations of Mexico have a strong demand and continuous development due to: good weather all year long, beaches, nature, hospitality, variety of food, culture, connectivity and attractions.

What Type of Rental Agreements are there?

Long-Term Rentals: from 6 to 12 months, with the option to renew the contract after that time. Usually, this type of contract is celebrated by the Notary public, but it’s not mandatory. Normally the Renter pays for its electricity, water and gas; many landlords include internet and the monthly maintenance or condo fee.  

Short-Term Rentals: from weeks to 6 months. 

Vacation Rentals: from night stays to weeks. 

 

Should I Rent Furnished or Unfurnished? 

If you are aiming for Short Term Rental or Vacation Rental -it’s very important to have all the appliances, furniture, bed linen, cookware, plates and cutlery as well as cleaning service. Your market will be mainly tourists who come on vacation. 

If you are aiming for Long Term Rental, there is a demand for both furnished and unfurnished homes. Your clientele will be mainly people who live and work in the Riviera Maya.  

Can I Rent My Property Part-Time?  

Yes, many foreigners use their property only for a few weeks or months of the year, the rest of the time they list their property for Vacation Rentals or a combination of both Long Term Rent for 6 months and Vacation Rental, for the time they don’t occupy the property.

How to List My Property for Rent?

In Gea Real Estate we offer the service of listing properties for Long Term Rent and Vacation Rentals in exchange for a commission; you are welcome to list your property on our website as long as it meets our quality requirements. You can also rent your property on applications and websites on your own or through an agency or person that specializes in Rental or Property Management.

Can someone Manage my Property?

Yes, in the Riviera Maya, there’s a variety of companies that specialize in property administration, representation and maintenance. Over the years, we have identified some that we consider to be the most honest and professional, which we can recommend.

What about Property Maintenance?

To keep your property in an adequate state for rent maintenance is very important and also consider that a damaged house decreases its value. The agencies and persons dedicated to property management have staff that can take care of keeping your investment in optimal condition in case you do not live in the area.

What type of Agreement should be used for Rental Purposes?

A Lease Agreement should be specifically drafted for your property and for its intended use where common provisions, terms, fees, maintenance, security deposit, use of premises, taxes, liability for damages, indemnity, insurance and other provisions. It should specify the rights and obligations of both landlord and tenant. The document should be in Spanish and subject to State and Federal laws. For non-Spanish speaking clients, we recommend creating a side-by-side (English–Spanish) document. Administration Agents and Companies use standard contracts of their own when renting. 

Do I need a Lawyer to create a Leasing Agreement? 

No, however, if you plan to make a renting business, we advise it. If you will be hiring a Person or Company for Administration, be sure to draft a Contract for your purpose and needs. If your intention is Long Term Rental and to validate the agreement with a Notary we recommend using a Lawyer.  

 

Property Rental Taxes

 

Do I have to pay Taxes for Rental Income? 

Many persons will tell you that you do not have to pay any Taxes for Property Rental Income in Mexico but the Tax Administration Service “Servicio de Administración Tributaria” (SAT) recently issued a reminder to those who obtain income in Mexico for the rental of buildings, commercial premises, houses, apartments, warehouses, among other real estates, must be registered in the Treasury, generally under the regime of Leasing and issuing Digital Tax by Internet “Comprobante Fiscal Digital por Internet” (CFDI) for said income.

The tenant is entitled to request the invoice from his landlord; individuals with business and moral activity may request the lessee to issue a digital voucher. For employees, it will be enough for their landlord to grant the lease receipt, which is a document that records the money that is being received as payment of the rent.

What are my obligations about Rental Income Taxes?

If you rent a property, either for residential or commercial use (offices, premises), you must comply with:

  • Enroll in the Enroll in the Federal Registry of Taxpayers “Registro Federal de Contribuyentes” RFC.
  • Keep your information up to date with the RFC, in cases:
    • Address change. You must submit your address change notice online, where you will update your new address information.
    • Increase or decrease of obligations. You can carry out this procedure when you change your economic activity or modify an obligation such as the presentation of declarations or change of periodicity of different compliance. You can start and finish the process online.
    • Suspension of activities When you interrupt your economic activities. The process begins and ends on the internet.
  • Keep your accounting, if you opted for deductions of your activity.
  • Issue electronic vouchers when you receive the amount of the income in which you must enter the property account number of the property in question.
  • Request tax receipts
  • Submit statements:
  • Provisional of ISR and make the payment of the tax on a monthly basis or if quarterly, if your monthly income does not exceed $ 24,502.40.
  • VAT definitive.
  • Make the payment of the tax monthly in the event that you rent a commercial room or furnished room house.
  • You have the option of not presenting the VAT information in the ISR Annual Declaration, you must only present the Informative Declaration of operations with third parties (DIOT) in a timely manner.
  • Annual, during the month of April of each year.

Should I hire an Accountant or Property Administration Service? 

If you are unfamiliar with these procedures and not living in Mexico, we recommend you to hire an Accountant or a Property Administration Service Company to handle Tax payments for you. Many individuals that offer Property Administration Service do not have the knowledge to properly handle Taxes for you, but some are very professional and do offer this as part of their services. -We can recommend Property Administration Services according to your needs. 

How to Calculate Taxes? 

To calculate the base on which you will pay the ISR each month there are two options:

  1. Income Collected – Deductions = Tax calculation basis

Deductions include: property tax payments; maintenance expenses; real interest paid on loans contracted to buy, build or remodel the leased property; insurance premiums that protect the properties; depreciation of real estate.

  1. Income Collected – Blind deduction = Tax calculation basis

The blind deduction is equivalent to directly deducting 35% of the income collected. It does not require keeping accounts or having receipts of expenses.

Income Taxed “Impuesto Valor Agregado (IVA)”

If the property you rent is an office or a business premises, in addition to the Income Tax (ISR) you will have to pay the Value Added Tax (VAT). In this case, it is important that when agreeing the amount of the income you indicate that it is independent of that tax. When you issue a receipt consider this example:

January 2020 income: $ 10,000 pesos

VAT: $ 1,600 pesos

Total: $ 11,600 pesos

Take into account that those $ 1,600 pesos are not part of your income, but you must pay them to the SAT. Against the tax in your charge you can prove the VAT that you have been transferred in the vouchers that cover a deductible expense, such as maintenance or the insurance premium of the property.

If you rent to a legal entity, you are required to withhold 10% from the Rental Income Tax “Impuesto Sobre la Renta (ISR)”. You can subtract that amount later in your statements.

What is the difference between a Natural Person and a Legal Person?

Natural person: Is the individual member of a community, with rights and obligations, determined by a legal system.

 Moral person: It is the set of natural persons, who unite for the realization of a collective purpose, are entities created by law, do not have a material or corporal reality (they cannot be touched as such as in the case of a natural person ), however, the law gives them the legal capacity to have rights and obligations.

What Taxes Can Be Deducted?

Monthly Expense Deductions

You can deduct the expenses and investments that are strictly essential to carry out your activity.

  • Payment of wages and salaries.
  • Fees you have paid as an employer to the IMSS.
  • Maintenance expenses that do not involve additions or improvements to the good in question and for water consumption, provided that they are not paid by those who use or enjoy the property.
  • Real interest paid for loans used for the purchase, construction or improvement of real estate, provided you obtain the corresponding tax receipt.
  • Property tax of the leased property.
  • Investments made in the leased property, such as constructions, additions and better.

Annual Expense Deductions

  • Medical, dental, nursing and hospital expenses, including the rental or purchase of equipment for rehabilitation, prostheses, analysis and clinical studies.
  • Optical lenses graduated up to 2,500 pesos.
  • Funeral expenses.
  • Payment for insurance premiums for medical expenses.
  • The real interest, actually paid in the year, for mortgage loans for your home.
  • Donations
  • Mandatory school transportation
  • Voluntary contributions to the retirement fund.
  • Local taxes for salaries.
  • Tuition (preschool to high school).

https://www.sat.gob.mx/home

https://www.sat.gob.mx/consulta/26988/conoce-tus-obligaciones-como-arrendador

 

Home Insurance

 

What are the Different Types of Home Insurance in Mexico? 

Once you own property it is important to protect your investment by acquiring the proper Home Insurance; this includes ensuring the property itself, its contents and contained assets. Nowadays there are both National and International Insurance companies available. You are welcome to consult with us regarding your options and we will direct you to trusted  Insurance Companies according to your needs. 

  • Title Insurance
  • Property Insurance
  • Personal Property Insurance
  • Beachfront Property Insurance
  • Condo Insurance

What is Title Insurance?

Protects you from unforeseen liens that may show up after the purchase. Parties involved could have missed either a private or commercial debt or lien during the title search. Title insurance protects you to a certain extent if this occurs.

What is Property Insurance?

Is the most important type of home insurance being a safeguard against numerous circumstances. They insure the property and also other items that belong to, reside in or are associated with the property like jewelry, art, sporting equipment and property used for business purposes. You can also include things like vehicules, water crafts, furniture, and other personal belongings. 

What is Personal Property Insurance?

Include coverage for personal items declared on the originating policy for the owner(s), can also be extended to guests/renters and employees. You can also include coverage on currency, precious metals, paper-securities, artwork and other tangible assets. Your provider must update these valuable assets periodically with coverage limits. 

What is Beachfront Property Insurance?

When owning beachfront property extreme weather, natural disasters such as hurricanes can be a hazard, the premiums for this insurance will be higher, but in this case protecting your investment is a priority. You can secure a policy that will lend relief in case of losses to property and personal possessions. 

What is a Condo Insurance Policy?

This type of insurance covers the entire property and they are contracted amongst condo owners; ensuring the building and communal elements of the property such as pools, garages, interior walls, fixtures, fittings, and outbuildings associated. Their cover policies tend to be limiting; many Mexican insurance policies exclude third party and renter’s liability from the standard policy and charge a premium to include these as extras. If your neighbors have contracted condominium insurance you might want to check about negotiating an extension of policies towards your property and personal belongings. 

Are there any Other or Additional Insurance Policies?

Yes, you can negotiate and adapt a multitude of policies with the insurance company known as riders that add and/or amends specific terms of coverage to the main policy. You can select a policy that suits your needs and then add an amendment that allows certain items/assets that are important to you. There are other home insurance policies such as Third-Party Liability, Loss of Use or Rental Income, and Renter Liability Coverage that can also be obtained. 

What is a Third Party Liability Policy?

Good homeowner policies insure your liabilities to third parties to protect you and your family for any lawsuits or demands presented against you in Mexico. For example, if a wall falls and injures someone who was near it at the time; or the neighbor’s property is damaged due to a falling tree from your garden.

What is Loss of Use or Rental Income Policy? 

If you rely on your property for work or to bring in a rental income, you may also choose to include a “loss of use” risk in your policy. This cover provides for additional living expenses if your house is damaged and cannot be lived in for a time while it’s repaired or rebuilt and, if the option is taken for the loss of rental income, you will be covered for any loss of rental income due to your home not being available for use (you will need to provide evidence that a rental contract exists).

What is Renters Liability Coverage?

Most homeowners insurance policies exclude coverage when your home is rented (even occasionally or part-time), or add a hefty supplement to the policy’s premium to include the renter’s liability as part of the coverage. 

 

Selling Property 

 

How to estimate the sale value of a property?

To correctly estimate the value of your property you must consider a variety of factors concerning the supply of Real Estate to generate an appropriate commercial value for your investment; A Real Estate Agency, a qualified Broker and a Valuation Expert are the professionals of the market who can advise you on a fair price.

Price Comparison: is a fine way to value a home by finding out at what prices homes sell for in your neighbourhood.

Average Prices: is the way real estate advisors and economists look at price trends by comparing the prices for which homes sold in one year with sales from the previous year – calculating the average sale price of today.

Supply and Demand: when the demand for property is high but the property is scarce, prices skyrocket. When the number of available properties increases to glut the market, prices typically drop.

Economic Growth: provides the power of acquisition of the population as well as the trends of the general market  thus influencing the Real Estate Market. Some of the factors considered within the equation are job growth, unemployment, home construction, population, income and demographics.

Property Condition: A home in good condition compared to one that’s deteriorated is worth more and it will be easier to sell. 

Upgrades, Remodelations and Extensions: These investments make your home unique and different from others. Considering these improvements within the equation gives added value to the property.

What does a Valuation Expert do?

The job of a Real Estate Appraiser or “Perito Valuador” is to advise, control and supervise the real estate appraisals of the properties that are requested of financial entities and give an economic value of the property. It also represents companies dedicated to the sale or auction of goods. They are registered with the Fiscal Authority, Institute of Administration and Appraisals of National Assets and Credit Institutions.

When is a Good Time to Sell?

There are a variety of factors to consider about the right time to sell your property, starting with the reason why you acquired a Real Estate; whether it was for the purpose of investment or with the intention of housing. If your intention was to live as a home or vacation residence, your life circumstances have probably changed due to job opportunities or life changes, and if you bought with the intention of investment you might want to sell when the market value is at its peak, or perhaps a combination of both. Regardless, you should consider a correct appraisal of your property as well as the trends and supply-demand of the real estate market in your area and make a comparison of the acquisition cost versus the cost of sale to ensure a good return on investment, wherein the case that you have used foreign currencies such as dollars or euros for the purchase of your property we recommend to consider the exchange rate as well.

Can a home depreciate?

Generally, real property never depreciates, or more so, it is not very common for property to depreciate.  This is why it’s a great investment. Make sure you carefully consider location and community when choosing a home, it can affect the home’s future value greatly.

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