BajaNomad - Leasing vs owning

Leasing vs owning

bajafreaks - 1-28-2017 at 07:57 AM

I'm looking into buying a house that's in a trailer park in Los Barriles. The park is a mix of permanent houses, palapas, and trailers. The property I'm looking at is a permanent built house but you obviously lease the lot/parcel its built on. Is there any Nomads that have property like mentioned and what are your opinions on the positives and negatives of leasing. Thanks

larryC - 1-28-2017 at 08:06 AM

I did that for years and it can be a good deal or it can be a nightmare. You are totally at the land owners mercy. If your landlord is a good person you don't have any problems when the ownership of the land changes, or the land owner dies then you are at the mercy of the new owner. They can raise rent at their will, and the longest land lease is ten years. If you own the land you are in control. I got off the leased land and I now own the land my house is on. At least I own it through a fideocomiso.
Good luck with it.

bajaguy - 1-28-2017 at 08:50 AM

RENT

DENNIS - 1-28-2017 at 08:52 AM

Ask the neighbors for landlord references. Ask them when they're drunk.
Life is a gamble if you live it fully.

PS.....big difference between a "Rental agreement" and a lease.

bajafreaks - 1-28-2017 at 09:48 AM

My other dilemma is I own a lot nearby but couldn't build a similar house for near the cost of buying this one. Sell the lot use that money towards the purchase and the house is paid for...

bkbend - 1-28-2017 at 10:05 AM

Larry summed it up pretty well, one thing I'd add is leasing is generally cheaper to get into because of that uncertainty and easier to sell or walk away from if you had to. You might also consider your time frame for the future, the longer you plan on keeping it the more sense ownership makes. The lease would add up over thirty years time.

Lee - 1-28-2017 at 10:52 AM

Quote: Originally posted by bajafreaks

I'm looking into buying a house that's in a trailer park in Los Barriles. The park is a mix of permanent houses, palapas, and trailers. The property I'm looking at is a permanent built house but you obviously lease the lot/parcel its built on. Is there any Nomads that have property like mentioned and what are your opinions on the positives and negatives of leasing. Thanks

If you were family, I'd be clear: DO NOT BUY A HOME ON PROPERTY YOU ARE LEASING. Unless you can move the home.

You have NO CONTROL over the land and will forfeit the home and thousands if you are asked to move. If the landlord breaks the lease and evicts you, or raises the rent, you have no recourse.

No matter the positive side to this transaction, you do not have leverage -- and you are in MX -- meaning unless you are a MX citizen, you will not get justice in a court or by hiring an attorney. (Generally speaking.)

Build on the lot you own. Build smaller or slowly over time. Own the land you have a home on.

rogbag - 1-28-2017 at 03:33 PM

We live full time (4 years now) in Costa Brava RV Park, which is on the beach down at the end of Calle Costa Brava in Los Barriles. Finances dictated that we lease instead of owning the property. The security is a plus factor in the decision to live here.
The owner of the property is definitely one of the major assets we have going on here. I cannot speak for the owners or their attitudes of the other parks in town.
As has been said here and elsewhere, "Don't invest more in Mexico than you are willing to walk away from." But Cesar has told me that he is not interested in owning palapas and trailers...he wants to collect the rent each year.
Overall, moving into our RV Park has been one of my better decisions.
Feel free to contact me direct if you want more info or feedback.

DENNIS - 1-28-2017 at 03:43 PM

Quote: Originally posted by lencho

"Own". Right.... until Mr. Loony Tunes so alienates Mexico that they decide to clean up the Fideicomiso loophole in Article 27.

Just sayin'...

Anything like that ever happens, Mexico can say adios to foreign investment....just like 1932.......the Gran Oil Expropriation.

[Edited on 1-28-2017 by DENNIS]

DENNIS - 1-28-2017 at 03:47 PM

Careful what you wish for:

https://en.wikipedia.org/wiki/Maginot_Line

Santiago - 1-29-2017 at 07:03 AM

Quote: Originally posted by lencho

"Own". Right.... until Mr. Loony Tunes so alienates Mexico that they decide to clean up the Fideicomiso loophole in Article 27.

Just sayin'...

What are you referring to?

bajafreaks - 1-29-2017 at 08:16 AM

Thanks for the feed back I definitely understand the risk but I'm also looking at it from a personal financial side since I can use my current investment (selling the lot) to buy an existing property turn key and be able to start enjoying Baja right now. As for the lease payment I would recoup that by renting the property from time to time just enough to get that cost covered.

DENNIS - 1-29-2017 at 08:24 AM

Make sure "subleasing" is permitted. Some camps frown on it. They prefer tighter control.

bajafreaks - 1-29-2017 at 08:36 AM

Quote: Originally posted by DENNIS

Make sure "subleasing" is permitted. Some camps frown on it. They prefer tighter control.

Its permitted.

bajafreaks - 1-29-2017 at 09:49 AM

Quote: Originally posted by rogbag

We live full time (4 years now) in Costa Brava RV Park, which is on the beach down at the end of Calle Costa Brava in Los Barriles. Finances dictated that we lease instead of owning the property. The security is a plus factor in the decision to live here.
The owner of the property is definitely one of the major assets we have going on here. I cannot speak for the owners or their attitudes of the other parks in town.
As has been said here and elsewhere, "Don't invest more in Mexico than you are willing to walk away from." But Cesar has told me that he is not interested in owning palapas and trailers...he wants to collect the rent each year.
Overall, moving into our RV Park has been one of my better decisions.
Feel free to contact me direct if you want more info or feedback.

U2U Sent thanks.

RFClark - 5-9-2023 at 10:00 AM

We have leased a lot(s) in the same campo in San Felipe for over 30 years. We have never had a problem. That said other people have had problems in the same campo.

I think the difference is we discuss what were doing with the owners of the campo and never forget that it’s their “football”!

My advice is first talk to people who have lived there for a few years and find out what the rules are. Bringing in outside contractors to do work is usually where problems occur. Ask first!

pacificobob - 5-9-2023 at 12:53 PM

Quote: Originally posted by WarrenSawy

However, owning a property can provide long-term financial stability and potential for appreciation in value.

My little rancho has appreciated hugely in value over the years of ownership. More than real-estate investments i have elsewhere.

[Edited on 5-11-2023 by pacificobob]

PaulW - 5-9-2023 at 02:02 PM

If you buy a house in an Rv park or a campo there are some advantages. Assuming the house the house is sellable then that is good.
The Mexican version of the IRS does no know the house exists. The land owner pays the taxes. When you sell the house you will not have to pay the 30% capital gain. You will not have the get an RFP, which is the document tax folks (Mx IRS) use to track everybody else.
Buy the house if it is a good deal and will be marketable in the future.
Owning the subject house will have expenses like HOA dues and land owner fees and usually utilities.
IMO, it is a mixed up situation from what many of us understand.

bajafreaks - 5-9-2023 at 03:40 PM

Kinda cool this post resurfaced.
We did end up buying and it's been a great decision for us. We've done improvements to the property to make it like we want. The neighborhood is great everyone looks out for one another but gives everyone space at the same time. The landowners have since this post was originally generated added another section of leased lots and they were completely built out with casitas etc. within 2 years. Its owned by a well-established local family that has passed down the management to their kids who are doing a great job. With prices going up in Baja if I was to sell it tomorrow, I'd be money ahead and then some...