For many years, Mexican real estate was the butt of many jokes. Foreign investors were taken advantage of by antiquated property laws, and the basic inability to get clear title to land in Mexico. Complicating matters were constitutional issues that prevented foreigners from owning certain types of land within the country. No one wanted to discuss direct foreign investment, much less residential development in Mexico.

Fast forward to 2008. Things have changed. The government here understands the value of direct foreign investment and residential development in Mexico. They understand how difficult it was for their own citizens – let alone foreign investors – to purchase real estate in Mexico. The issue of ownership has been dealt with quite decisively, and it is safe to buy property in Mexico today.

In the past few years, banks and private lenders have judged the Mexico real estate market to be safe enough to offer long-term lending products. Construction loans, mortgages for purchasing land, buying existing property and even refinancing are now available. This is great news for investors because it means that not only can you purchase property safely, but you also have a mechanism to access and use your equity when you need or want to.

The fideicomiso system – a trust system of property ownership – allows foreign investors and Mexican citizens alike to own, use, improve, rent and sell land in Mexico. While holding property in trust rather than directly holding the deed seems unusual to American investors, it’s very safe and essentially creates a fee-simple ownership. You have absolute rights to use, occupy, improve and benefit from the property you hold in fideicomiso. The bank that holds your land trust must serve as the trustee for your sole benefit. The bank is beholden to no one but you or your designees.

You can also use your fideicomiso to designate your successor beneficiaries at the time the trust is established. If something happens to you, your successors become the primary beneficiaries immediately, no questions asked. The best news about this method of land ownership is that no owner who has used the fideicomiso to hold title to his property has ever lost his ownership interest. As an added protection, you can purchase title insurance from familiar title companies like First American Title to protect your investment.

There’s no doubt about it. Right now is the time to invest in Mexico real estate.

Photo Credit: Shaun W