Living the Dream, or Dreaming?

For many people who retire, going somewhere “south” where the cost of living is cheaper than in Canada or the U.S is a big consideration, as is the question "Where should we go?", and “Is it better to rent, or buy?” I have been looking at international real estate for 10 years and I am still undecided. There are so many factors:

• Local economy – will your investment in real estate grow, or will you ever be able to sell when you need to?
• How risky is the investment versus the real estate market back home?
• What is the true cost of maintaining a property in the tropics?
• Do these "income producing" properties really cover your costs like all the realtors say?
• Is it better to rent or buy?
• Can you really live here for $1500 month like the International Living magazine says?

Here are some of the things I have discovered …

• It’s HOT here! Hot is good – don’t get me wrong – but hot is different when you are here for a week laying by the beach, versus here for 6-12 months standing in line at the cell phone place. Hot and humid takes on new meaning when instead of laying by the pool you are grocery shopping in a crowded market with sweat pouring down your face into your eyes and dripping off the end of your nose. Heat loses its romance when sweat soaks through your clothes when sitting on the bus making it look like you peed your pants when you stand up.

• Mold, mildew, creeping vines, and creepy bugs will literally take over your home if you are not constantly washing surfaces with bleach, fumigating and weeding. You will find teeny tiny ants in your food, in your shower, in you shoes. Iguanas will stalk you, hiss at you when you walk by, and lurk around every corner, waiting to pounce on dropped food…or if you are unlucky, your painted toe nails!

• It IS cheaper to live down south - BUT - it depends where you live, and how you live. Big centres like Puerto Vallarta are more expensive than smaller communities further from international airports. Electricity is very expensive, so if you run your air conditioner all day and night you can spend $400 month just on electricity! If you eat like a local, food is cheaper here, but if you insist on olive oil, steak, brand names of prepared foods, etc, it is more expensive than back home. Eat like a local, and you can save a lot ...fresh fish, fresh fruit and veggies, rice and beans.

• The Mexican economy is growing, as is the middle class here – putting upward pressure on real estate – however - it is the homes that middle income Mexicans are buying – not the over-priced condos with views the xpats are buying – that are increasing in value.

• Middle income Mexican homes that are increasing in value are in Mexican neighbourhoods, and Mexican neighbourhoods are NOISY! This is just a reality. Mexican culture is about family and music and fun…large families, lots of kids…who by the way play in the streets until late at night. Lots of dogs – unfixed – marking their territory by barking. Loud sappy Mexican music playing until 6 am…yes 6 am! Parties here start around 10pm and end in the morning. Then there are the roosters….just about the time the music ends, the roosters start. Add to the cacophony the old rickety busses clamouring down the cobblestone streets, and the water truck announcing his arrival through a megaphone, and you get the picture…

• Crime – which, in general, in the past 10 years has not been too bad in tourist areas like Puerto Vallarta, Cabo san Lucas, Cancun, and Playa del Carmen – is up between 50%-600%. Cabo and Cancun in particular. This turn is recent – and thanks to the new Narco competition in the void created by the capture of El Chapo. A new gang – called the Jalisco New Generation - is spreading terror – Escabar style – and if things do not improve rapidly, Mexico may see a rapid departure of xpats – leaving behind their properties – and a ruined economy in their wake.

Having said all that, you might wonder why anyone would come here at all! Well, because like anything, you must keep things in perspective. Good balances bad. What I love about the developing south is:

• It’s HOT! And when the grocery shopping is over, you can jump in the pool or walk on the beach

• Labour is cheap, so it is affordable to hire a maid to keep the mold and bugs at bay

• Mexican architecture is charming: large open windows let in cool ocean breezes, exposed brick and colourful tile excite the senses. Cool marble floors and lush gardens feel good on your feet

• People here are very family oriented and very hospitable. No one has attached garages that they drive into keeping themselves from ever meeting their neighbours. They greet you in the streets and when you get on the bus. People smile and sing while they work. Life happens on the street. People shop, talk, rest, sleep, play, and work on the streets (as opposed to in buildings), so you really feel a part of a community

• Crime is of course a concern, and not to be taken lightly, but here is what I can say, I feel safer here at night walking down the street than I would in downtown Toronto. The murder rate here in Puerto Vallarta is still lower than the top ten crime cities in the U.S. If you do not flaunt your wealth, hang out at clubs late at night, and/or buy drugs, it is relatively safe.
So if you choose to come, the question then becomes whether you should buy or rent….and THAT my friends, is the subject of my next blog post. Right now, I have to go for my morning stroll up the cobblestone street to watch the sun pop over the mountain and shine its golden rays on the stunning turquoise sea below.