Invest Mazatlan - Real Estate & Mortgages in Mazatlan, Mexico

Real Estate

Property Investment Case Study

Being in a pre-retirement age, a married couple from Minnesota decides to look into buying a second home somewhere south of the border so they could retire in a mild climate. They decide to purchase a 1800sq ft 2-bedroom beachfront condo for USD400 000.

Outline & approximation of associated costs*:

Condo Price: USD400 000

Number of bedrooms: 2

Parking lot: yes

Completely furnished for: USD15 000

Used car (year 2000): USD10 000

Becoming a legal owner:

Obtaining a title:

Title, legal fees, & taxes (incl. acquisition tax of 2.2%) - USD$17,728.60 (5% of price)

Fideicomiso:

Establishment cost incl. permit at the Foreign Affairs Ministry - USD$2440

Financing:

Optional plans:

30 years 20% down (30/20) Ц fixed interest rate 8.75%

30 years 30% down (30/30) Ц fixed interest rate 9.25%

20 years 30% down (20/30) Ц fixed interest rate 7.99% for first 4 years, the reminder 4.5% + Libor (max 12%)

Monthly payments:

30/20....ЕЕЕЕЕЕUSD$2517 30 years
30/30 ЕЕЕЕЕЕ.. USD$2931 30years
20/30 ЕЕЕЕЕЕ.. USD$2102 first 4 years, then flexible

*Property insurance is included in every loan in construction financing.

After purchase:

Insurance:

House contents (basic): Yearly premium - USD$194

Auto insurance (basic):

Yearly full coverage - USD$260
Yearly liability - USD$165

Medical insurance for both (basic package): Yearly premium USD$3,096

Rental income:

Based on location and condo & resort amenities; monthly rates are 85% of weekly rates;

High season: Mid-December to Easter

Average rental income/occupancy in %: Weekly income USD$750 - $1500/90%

Shoulder season: Easter Ц June & Mid-October Ц Mid-December

Average rental income/occupancy in %: Weekly income USD$750 - $1500/30%

Low season: July Ц Mid-October

Average rental income/occupancy in %: Weekly income USD$750 - $1500/5%

*All costs are indicative only and are subject to change (March 2007)