BajaNomad

Rental Income

loretohood - 7-18-2007 at 08:49 PM

I have been looking to purchase a property in BCS that I can rent out for 10 months of out the year, weekly rentals or longer term.

I am expecting to subsidize the mortgage with the rental income to soften the blow. The projects I have looked into are quoting anywhere from 30 - 50% occupancy in their respective rental programs. Ofcourse, they retain 30 - 35% of the income.

I am hoping to get impartial percentages from someone that has rental properties.

Thank you.

Russ - 7-19-2007 at 07:21 AM

Just something you may want to look into: You may need permission to work added to your tourist document to rent. I heard of a few people were deported until they got there papers updated and of course paid for the infraction.

CaboRon - 7-19-2007 at 08:43 AM

Loretohood,
What is the location of the properties ? BCS is a pretty big state. Are you in Loretto as your name suggests ? Are you looking for referrels to agents? Are you looking at a specfic project ? With more information we can give you better feedback.
Take Care, CaboRon :?:

wilderone - 7-19-2007 at 08:56 AM

"Impartial percentages"?? This is not something of a general nature, but specific to the rental property. If someone other than yourself will be responsible for finding the renters (weekly basis? - lots of management), then you will be dependent on them for your income. Are there others who will be doing the same? Is the property finished with a finite number of units to rent with a rental history? Or will the equation change, with more empty units to choose from versus the same number of renters? Where will these renters come from? Advertising? Payment for advertising? Quality of advertising? Maintenance/cleaning costs in addition to Management? If you're talking about the Loreto Bay units, you should go down there yourself and rent long term to 2 or 3 construction workers. In any event, a long term lease would be better. Be sure you know who "management" is (names, qualifications) and what their responsibilities are and how the money changes hands, i.e., rental money goes into direct deposit into bank on a particular day of the month or what? Monthly statements? How would you know if they had a week-long tenant and pocketed the money instead of splitting with you? Why don't you just buy a cheaper place that you can afford? Nice places in La Paz, or buy a lot and build your own. There are a couple of great houses on the beach just south of Rancho Leonero for instance. Check out the entire Mexican real estate market to be sure you're getting what you want at a price you can afford without being dependent on rental income as 30% occupancy isn't too comforting.

Pstreet1 - 7-20-2007 at 07:12 PM

Having owned rental property in Mexico, I urge you to look carefully at the thoughtful post just above mine. We discovered that our unit was often rented when we knew nothing about it--and we received no money for it. It is very, very common in Mexico. All of Baja is being flooded with Americans who plan to "pay for the property with rentals." Think about it. It isn't going to happen. More and more and more units are being built--and there really isn't a shortage now. If it will be a burden if it isn't rented, you should think very carefully before commiting because the rentals are going to slow down as more and more units come on line. In addition, if you are making money in Mexico, you are required by law to submit income tax every month. As long as no one investigates, it won't matter, but I am told the Mexican government has discovered that Americans are renting units and not paying tax, and they are beginning to step up efforts to find these owners. If your unit is being rented by an office/management company, etc., you will be very easy to locae.

bacquito - 7-22-2007 at 09:18 AM

Quote:
Originally posted by Pstreet1
Having owned rental property in Mexico, I urgcarefully at the thoughtful post just above mine. We discovered that our unit was often rented when we knew nothing about it--and we received no money for it. It is very, very common in Mexico. All of Baja is being flooded with Americans who plan to "pay for the property with rentals." If it will be a burden if it isn't rented, you should think very carefully before commiting because the rentals are going to slow down as more and more units come on line. In addition, if you are making money in Mexico, you are required by law to submit income tax every month. As long as no one investigates, it won't matter, but I am told the Mexican government has discovered that Americans are renting units and not paying tax, and they are beginning to step up efforts to find these owners. If your unit is being rented by an office/management company, etc., you will be very easy to locae.

CaboRon - 7-23-2007 at 06:47 AM

VERY WISE words. :cool: CaboRon

rhintransit - 7-23-2007 at 07:22 AM

on the rental front...on VRBO I just saw a posting (maybe the first of many) for a rental in 'the charming village' of Loreto Bay, minimum three months. hum. wonder how long before the market is saturated with these?

CaboRon - 7-23-2007 at 07:34 AM

Quote:
Originally posted by rhintransit
on the rental front...on VRBO I just saw a posting (maybe the first of many) for a rental in 'the charming village' of Loreto Bay, minimum three months. hum. wonder how long before the market is saturated with these?


This could actually be a good thing for renters ... especially those like myself, who are living on a very modest fixed income. More rental stock generally reduces prices. Two sides of a coin you know ! CaboRon

rhintransit - 7-23-2007 at 08:38 AM

Quote:
Originally posted by CaboRon
Quote:
Originally posted by rhintransit
on the rental front...on VRBO I just saw a posting (maybe the first of many) for a rental in 'the charming village' of Loreto Bay, minimum three months. hum. wonder how long before the market is saturated with these?


This could actually be a good thing for renters ... especially those like myself, who are living on a very modest fixed income. More rental stock generally reduces prices. Two sides of a coin you know ! CaboRon


I totally agree...prices now make owning vs renting in Mexico a no brainer for me.

I did misquote, however, it's the "vibrant seaside village" of Loreto Bay. (not to digress into the Loreto Bay thing, but it IS vibrant with construction workers...) a two bedroom two bath furnished home is 1900/mo for 3 months, 1650/mo for 6 months, and 1350 for 12 mo. no mention of utility cost or ac surcharge... other 1, 2, 3 bedroom homes are 'available' all units 'individually owned and operated'

wilderone - 7-23-2007 at 10:23 AM

"owning vs renting in Mexico a no brainer"
Si - absolutely. And you're not stuck going to the same place forever since you can rent everywhere. No property taxes, no landlord woes.
I owned a condo in Cancun many years ago which was supposed to be available for rent. In 3 years, it was rented TWICE. The cleaning fee went up from $4.00 a day to $8.00 a day. A hurricane came through and everyone was assessed $800 to clean up the lobby. Everything was paid in cash. One year someone stole our cumulative tax payment. We all had to pay again. I have a friend who has a house in the Rosarito development of Las Gaviotas. She says tenants have stolen her TV and VCR, one time, just the remote. The cleaning crew always takes the soap, shampoo and toilet paper. She does a lot of advertising, but still has 50% vacancy, and her friends and relatives account for about 25% of her rented days.