Many expats advise that anyone moving to the country consider renting a home in Mexico for a few months before making a final decision to buy a home or sign a long-term rental agreement.
Why? When you are moving to a new country, the last thing you want to happen is to buy a home or sign a long-term lease and then discover you made a mistake moving to Mexico or the noise at night is intolerable or you discover another area within the city that suits your needs better.
Renting first makes a lot of sense. The risk is relatively low, so if you find that Mexico is not the place for you, your investment is small, particularly since over 90 percent of the rental homes are furnished. If you find the neighborhood is really not what you wanted, you can spend the initial months looking for a place to buy or rent long-term that will be perfect for you. Or you could try out several different neighborhoods or even different cities.
Rental properties are either short-term vacation rentals, six-month contracts for part-time expats (usually snowbirds) or long-term rentals, which are annual contracts but can be longer.
Vacation rentals are most popular in the international beach resort cities such as Puerto Vallarta, Los Cabos and Cancún. Six-month contracts can be found anywhere in Mexico but are most prevalent in the popular expat centers like San Miguel de Allende and Lake Chapala where many snowbirds come to spend time away from the long winters up north. Long-term rentals are a bit harder to find in popular expat locations that attract lots of tourists and snowbirds.
Searching for a rental usually begins online. Virtually every major city in Mexico with a sizeable expat population has websites that cater to expats looking for homes, condos or apartments to purchase or rent. Craigslist is also available in 16 cities in Mexico and has both homes to purchase and rent. And, of course, most real estate firms offer rentals, both short-term and long-term.
Not long ago, Kathleen and Todd Atkins moved to Puerto Vallarta and looked for a home to rent. We featured the couple in our article, “Expat Entrepreneurs in Mexico: The Tempting Tastes of Puerto Vallarta.” The couple’s search for a place to rent was recently featured on HGTV’s “House Hunters International.” We contacted Kathleen to learn more about how they went about finding a place to rent.
“Although we worked with a rental agent to find our place,” she said, “many expats recommend choosing a few neighborhoods to look at and then driving around them to see what is for rent. Most places have For Rent (Se Renta) signs with telephone numbers and other contact information.”
Connecting online with expats who live in the city you plan to call home is another good way to discover what rental options are available in specific neighborhoods. The information may not always be purely objective but is additional helpful information. Social media and city expat forums are additional ways to connect with expats.
The Atkins found their home in Colonia Las Gaviotas in Puerto Vallarta, an old established neighborhood with large homes just east of the Hotel Zone.
“Our home is about 2,800 sq. ft. with four bedrooms and five bathrooms and an office,” Kathleen Atkins said. “We rented it unfurnished and pay US$2,000 a month for rent but it includes electricity, gas, water and pool and yard maintenance.”
Rental costs vary by city, neighborhood, size, furnished or unfurnished, amenities, services included and length of contract. Short-term rentals and furnished homes are generally more expensive, as are homes in upscale areas with panoramic views.
We contacted real estate agents in several major cities to sample the long-term rental cost of a 2,000 sq. ft. home in a good expat neighborhood to give you an idea of what to expect.
In Mazatlán, a 2,000 sq. ft. home can range anywhere from US$1,200 to $2,000, depending upon neighborhood and other variables, such as furnished or unfurnished. Further south in historic Oaxaca, a similar home could be rented for US$1,500, unfurnished. Farther west in Los Cabos, be prepared to pay between US$2,000 and $2,500. And in expat favorite San Miguel de Allende, you could rent a comparable home for US$1,400 a month.
Most real estate firms in Mexico have rental divisions that cater to expats and offer a wide variety of both short-term and long-term rentals options.
To better understand how the rental process works in Mexico, we turned to Michael Kavanaugh, the owner of Ajijic Rentals and Management in the popular Lake Chapala area.
“One of the first things I did when I started this business nearly a decade ago,” he said, “was to have an attorney draw up a new rental contract for use in our business. Contracts in Mexico are in Spanish and English, but it’s the Spanish contract that counts. As rental agents we sign all contracts as the landlord, so renters deal with us because we also handle property management for the homeowners who list with us.”
Kavanaugh explained that many of the homeowners in the Lake Chapala area who rent homes with long-term leases are Mexican nationals and believes that it is easier for expats to deal with his firm than directly with homeowners who may only speak Spanish.
Terms for long-term rentals typically include first month’s rent, last month’s rent and a security deposit at the time of the rental.
“Our contract also explains that US$200 of the security deposit is held back to cover any end-of-lease expenses, such as filling the gas tank before the tenant vacates the home,” he said. “For expats who have pets, they will have to pay a pet deposit, if the owner allows pets.”
The contract also stipulates what is included in the rent, often a gardener, maid, pool maintenance and sometimes utilities or other amenities. These extras, however, are often negotiated.
Importantly, to protect both homeowner and renter, Kavanaugh’s firm photographs the rental home and furnishings before the renter takes possession of his/her new home. The property photos are reviewed when the renter moves out to determine if any damage has been done to the property or if items are missing.
Kavanaugh said the biggest mistake renters make is wanting to rent a home after they have seen it online, without physically inspecting the property. He cautioned them to spend some time in the area looking at properties before making a final decision.
“Come down and rent short-term for a while to get a feel for the different areas within our Lake Chapala area,” Kavanaugh said. “There are a lot more short-term rentals available than long-term.”
For those who want to be full-time expats in Mexico, finding long-term rentals in popular expat communities like Lake Chapala requires patience.
“We’re always looking for long-term rentals,” he said. “Many expats live here either during the summer or during the winter and rent their places when they are not here. Mexican families own most of the homes available for long-term rental. For example, I have a listing for a long-term rental directly on the lake about 10-minutes west of Ajijic. A Mexican family who used the home primarily for vacations owns the home. It is 3,000 sq. ft. with a pool and a large yard and is offered for US$1,500 a month.”
Kavanaugh’s company has many exclusive listings not found elsewhere, but also has access to properties managed by other real estate firms in the area. He said renters are not charged a fee for finding a rental. Homeowners pay him for renting and managing their properties.
Rental practices and procedures in Lake Chapala are similar to what you will find in most expat centers throughout Mexico. We recommend that you use an experienced real estate firm with access to all the rental properties in the area, have an explicit contract in Spanish and English that fully covers all contingencies and agreements and ensure that your rental agent fully documents the condition of the house before you rent.
Yes, you can also rent directly from homeowners, but remember, there is a well-grounded reason for the old Latin saying caveat emptor, let the buy beware, meaning the risk is taken by the buyer. Always have a legal, signed contract to protect your interests.