Category: Real Estate

Should you buy real estate in Mexico? Well, the simple answer is yes, you should! 

Just so you know, owning a property in a top destination can offer portfolio diversification and amazing ROI. 

Still unconvinced? Here are some of the best reasons why buying real estate in Mexico is a decision you will never regret.

1. Familiarity with the Culture

As a close neighbor to both Canada and the USA, Mexico shares a lot of cultural traditions as well as other similarities. Whether it is activities, shopping, food, or drinks, Mexico has a touch of American influence in the same way that the influence of Mexico is prevalent north of the border. 

2. The US Dollar is Strong 

The Canadian and US dollars both enjoyed historic highs against the Mexican peso that means amazing bargains for the investors. Mexico offers great value compared to the rest of the world’s famous vacation destinations in terms of real estate investments to the cost of living to daily expenses. 

3. Access is Easy and Simple

The hottest locales in Mexico offer easy accessibility to the major international airports that offer lots of connecting flights to cities all over the world. It makes it easier and more convenient for tourists and owners alike to travel back and forth. It also makes it very much possible to reach 80% to 90% yearly occupancy rates in areas such as the Riviera Maya. 

4. Good Returns on Investment

In most hotspots such as the Riviera Maya stretching south for 80 miles along the Mexican Caribbean coast including top vacation destinations such as Tulum, Puerto Aventuras, and Playa del Carmen, turnkey vacation home rentals offer high ROI that can beat the stock market and offer a good hedge against inflation at the same time. 

5. No Depreciation on Property Values 

Vacation homes in Mexico also enjoy excellent appreciation and property values won’t suffer from deprecation. Here, the real estate market is one of the top 10 fastest growing property markets in the world and the demand easily outpaces supply. 

6. Expats and Locals Speak English 

Don’t worry if you can’t understand a single Spanish word because Mexico is now the residence of ex-pats coming from the US and Canada. Most of the locals also speak English including professionals such as doctors, dentists, lawyers, and restaurants, and retail workers. 

7. Better Investment Value 

If you will try to compare the price of vacation houses in Tulum that is near the Mexican Caribbean Sea with the price of similar properties in Florida, California, or anywhere else in the region, you might be surprised with their difference. Aside from this, the top destinations in Mexico provide an amazing selection of unique activities and adventures you won’t find in other parts of the world. It means that there is always something in store for the most adventurous investors here. 

8. Modern Infrastructure

Mexico abounds with modern infrastructure so you can look forward to feeling comfortable and right at home. These include major highways, high-speed internet, international schools, outstanding medical facilities as well as major brand name retail outlets. 

Should you buy real estate in Mexico? You should if you want to enjoy all these benefits and more! 

The continuous advancement of technology seemed to have made the world smaller than how it used to be several years ago. This has now become common to move and live abroad, especially among the younger generations. 

Unfortunately, living overseas, particularly in the United States, is not always a path of roses. So, what are the pros and cons of living abroad in the US?

Pros of Living Abroad

1. Exciting Opportunities 

The US is not called a land of opportunity for no reason. It offers ex-pats more of these opportunities than other countries around the world. Employment can be found easily in almost all fields with a higher paycheck than what is available anywhere else. 

The US is also considered a great place to start a business with a very diverse and wide market. Almost all kinds of businesses can flourish here. 

2. Great People 

Aside from several places, racial discrimination almost doesn’t exist in the US. You won’t be treated differently whatever preferences or skin color you might have. It cannot be said for other countries. While there will always be some rude people here and there, one thing you will notice when you live in the US is that the people are actually refreshing. 

3. Interesting Culture 

Although the culture in the US is not an ancient one, there is no denying that it is the most glamorous you can find. From the west coast’s Los Angeles to the east coast’s New York City, America is a true cocktail of cultures that will make everyone feel welcomed. 

Cons of Living Abroad

1. Culture Shock

Based on where you are coming from, the culture shock you will experience could be to a smaller or bigger degree. It is just normal when you are relocating and something you cannot avoid at all. Once you move to a new place, people will be different from what you have been used to. 

This could be something as ordinary as the American’s aversion to using flipflops. However, it could also be something that doesn’t sit well with you. This is why it is important that you research and check all facts before you live abroad so you won’t be caught off guard by the culture shock. 

2. Work Ethics 

There are ex-pats who have a hard time adjusting to the United States’ working atmosphere. Most people can deal with it. But, with all the available opportunities, it also means that plenty of people are vying for them. This means that almost all positions are replaceable. You might end up losing your job if you don’t show the correct work standards.

On the other hand, some people might see it as an advantage. Most employees are filled with ambitions and they hope someone will notice their outstanding effort. And there are those who are just totally used to more difficult working conditions. People who are used to bringing home their work or working odd shifts might prefer employment in the US. Provided that you work hard, you can get higher pay compared to what you could expect in your own country. 

You should always weigh these pros and cons of living abroad first before you make a final decision. 

It may sound straightforward and simple to report your rental income from your rental properties. However, this might not really be the case all the time. The definition of the IRS of rental income might be much broader than what property owners know. This is because of these misunderstandings that you might even up with more expenses than necessary if it doesn’t get covered by the IRS audit.

A Quick Definition of Rental Income

Rental income refers to any payment received for the occupation or use of your property. Aside from the usual rent payment, rental income may also include the following:

• Amounts paid for lease cancellation – When the tenant pays a fee for lease cancellation, this amount will be considered as rent.
• Advance rent – It pertains to any amount that is received prior to the rental period that it covers.
• Expenses paid by the tenant – When the tenant pays any expenses, like the bill for garbage removal even if the tenant is not required to do so as stated in the lease, these payments are considered income. You can deduct any expenses paid in your behalf.
• Services or property – If you receive services or property as rent instead of money, the services or property’s fair market value will be considered as rental income. If services have been provided at the specified or agreed upon price, this price will generally represent the services’ fair market value.

Any of these described rents should be added to your rental income in the particular year when you receive it, whatever accounting method you use or no matter the period that the rent covers.

How to Record Security Deposits

Security deposits should never be added to your income if you still need to return it when the lease ends.

• Damaged property – If you keep all or part of the security deposit since the tenant damaged your property and there are repairs that should be made, you have to deduct the amount of repair expenses by the amount of deposit retained in order to cover these expenses.
• Breached lease – If you will keep a certain amount of the deposit since the tenant breached the lease, you need to include this amount in your income for that year when the lease got broken.
• Final month rent – In case you have plans to use the security deposit as the final month rent of the tenant, you need to include this money as income upon receiving it as opposed to applying this to the rent for the previous month. This amount is what you can consider as advance rent.

Seek Professional Advice

It is easy to see that there are a lot of twists and turns involved on how you should be reporting your rental income for the purpose of taxes. This is the reason why it is always best that you seek the advice of a professional tax advisor. This is the best way to make sure that your rental income is reported properly so you can avoid any penalties for underreporting and keep yourself safe from incurring interest.

 

Understanding and knowing the financial drivers that influence the behavior of developers and investors is crucial for communities that hope to attract more private investments. From 2007 onwards, the conditions of the financial markets have been changing continuously and rapidly that limit all types of investment.

Not too long ago, markets have become more stabilized to give confidence to some investors and developers to start new projects. Investors are also starting to go back to real estate as they believe it to be a good and stable investment to serve as protection from future inflation many people feel will happen as the result of sustained low rates of interest and government spending.

In the real estate market, apartments are most suitable as investments against inflation. They also reflect the market with favorable economic and demographic trends that result in significant numbers of new projects including rental units.

Unfortunately, the latest upheaval in the property market has resulted in more developers with half-finished apartment buildings dot the landscapes of major cities.

With the year coming to an end, more operators who already pushed the limits will be joining them.

Places with oversupply of apartment buildings will be seeing more chaos for the next few months. In Australia, for example, areas over 10 kilometers from city centers of Melbourne and Sydney and some areas of Queensland are considered to be the most vulnerable.

Mounting Numbers of Job Losses

Jobs in construction are a crucial support for any economy. Expenses in this sector will flow through other industries such as services, retail, and manufacturing sectors.

Considering how important this aspect of the economy is, it is hardly a surprise that financial institutions are keeping a close eye on the activity or the lack of it.

The government officials are pointing out that they were able to contain the property slump and that it will not have any derailing effects on the economy.

But, the past year has seen the loss of around 40,000 jobs in the industry of construction as the lending crackdown driven by regulator started to take effect.

Projects Put on Hold

The oversupply of apartment buildings is probably the result of developers having a hard time getting to what is known as financial close. This usually happens around 12 months after the purchase of a site. During these 12 months, developers undergo the process of planning and kick off their marketing. Usually, 80% of the development should be sold to receive finance when this is achieved, the developer will get finance and begin construction.

However, considering the environment, developers don’t launch their projects. Around 50% of projects since 2015 got to the construction phase. But, even though the developers have enough buyers, there is the risk that customers don’t have the money to make a purchase.

The oversupply of apartment buildings today in many parts of the world might not be good news. But, with hopes of changing tides in the economy, this oversupply may still come to an end.

 

 

Refinancing is the term used when you get a new mortgage to replace the original one. It’s done to enable a borrower obtain better interest rates and terms. The first load is already paid, enabling you to get a second load, rather than having a new mortgage or throwing out your original mortgage.

For some borrowers with perfect or good credit history, refinancing is a great way to convert variable loan rates to fixed and acquire lower interest rates. For borrowers with poor credit, refinancing is risky.

In economic climate, it is hard to make payments on home mortgage. Between an unstable economy and possible high interest rates, making payments for mortgage can be tougher than you expected. If you find yourself in this situation, it is time to consider refinancing.

Basically, the risk in refinancing lies on ignorance. Without proper knowledge, it may hurt you to refinance, which can increase your interest rates instead of lowering it. This is why you should know the basics of refinancing first and how beneficial it is for you.

What to Know about Refinancing

Refinancing is basically the process of acquiring a new mortgage in an effort to reduce the payments monthly, take cash out of your house for big purchases, reduce your interest rates or change the mortgage companies. Majority of people refinance once they have equity on their house, which is the difference between the worth of a home and the amount owned to a certain mortgage company.

Benefits of Refinancing

One of the primary perks of refinancing is reducing the interest rate, regardless of the equity. Oftentimes, as people continue making more money and work through their careers, they’re able to pay every bill on time and increase the credit score. With that increase in credit, it is possible to procure loans at lower rate. Therefore, a lot of people refinance with the mortgage companies. Low interest rates may have a profound effect on the payments monthly, which can save you lots of money.

Other people refinance to acquire money for big purchases like cars or to decrease their debts on credit cards. The way they do it is through refinancing for the purpose of taking the equity out of the home. A credit’s home equity line is calculated as follows. The home is appraise and the lender will determine the appraisal percentage they’re willing to loan. The balance owned on the original mortgage will be reduced. Then, the money will be used for paying off the original mortgage and the remaining balance will be loaned to homeowners.

When to Refinance Your Home

Majority of lenders and banks will require the borrowers to keep their original mortgage for at least a year before they can refinance. It’s in the borrower’s interest to check with the particular lender for details and restrictions.

In other cases, it makes sense to refinance with the original lender. However, it isn’t required. Keep in mind that it is much easier to keep customers than making new ones, so many lenders don’t need a property appraisal, new title search, and so on. A lot would provide better price to the borrowers looking for refinancing. A better rate may be acquired through staying with the lender.

Home ownership is a lifelong goal of many people. Even if home ownership is high today, it was not always the case. Families either needed to construct their homes or rent a house from somebody else. While both buying and renting have their financial benefits, owning a house is not right for everybody.

Below are some of the reasons why you must rent what you own:

• Access to Amenities

A financial advantage to renting instead of purchasing a home of your own is having an access to the amenities that would be a huge expense. Luxuries like a fitness center or in-ground pool come standard at a lot of mid-scale to upscale apartment complexes without extra charge to tenants. If homeowners want to match such amenities, it’d cost thousands of dollars for maintenance and installation.

• No Repair Bills or Maintenance Costs

The benefit that renters enjoy is that they don’t have repair bills or no maintenance fees. If you rent a property, the landlord is responsible for repairs, maintenance, and improvement. If a unit stops working or the rook starts leaking, you can contact the landlord and it will be fixed. On the other hand, homeowners are responsible for every home renovation, repairs, and maintenance costs. Depending on the repair’s nature, it may get expensive.

• No Downpayment

Renters have better financial deals are upfront cost. Renters might need to pay security deposit equal to the rent good for a month. But, when buying a home with mortgage, you are required to have a sizable 20% downpayment. Even if the exact amount renters have to pay upfront differs from case to case, the overall amount is less than the downpayment to purchase a house.

• No Real Estate Taxes

Renters do not need to pay property taxes. A real estate tax may be an expensive burden for homeowners and differ by place. The costs may be thousands of dollars every year. Even if the property tax calculation is complex, it is determined based on the home’s estimated property value and amount of land. Property taxes may be a financial burden with newly built houses getting bigger and bigger.

• Downsize Anytime

With the economy today, a lot of people struggle when making ends meet. Through renting, the citizens have an option to downgrade to a much affordable living space. Being able to downsize anytime is important for retirees who like a less costly that matches to their budget. If you are a homeowner, it is much harder to break free of a costly home due to the involved fees with selling and buying a home.

• Low Utility Costs

Even if the homes may vary in size, they are usually bigger than the rental apartments. As results, it is much expensive to heat and even the electric bills are higher.

Conclusion

Owning a house is beneficial for homeowners in the long run. But, for people who want to avoid the hassles of homeownership, the property taxes, and costs of upkeep, renting is a better choice. It depends on one’s financial situation and lifestyle.