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Garth

Buy or Rent a house?

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There is not one correct answer to this question. It also depends on your goals.

I was previously in the real estate business and I used to think everyone should buy, but I have since realized, it is not for everyone.

So...what do you want out of life?

Factors to consider--your age, health, financial situation, and GOALS.

Renting is almost always cheaper. Do the math based on how long you expect to live in the same house. Don't include the cost of utilities as you would pay that in either sceniario. Do include the cost of maintenance as it will always be more than you think.

Flexibility--when you rent, you can move easily.

Owning may be preferable if you really want your own place to do what you want to it, you love where you are living and never intend to move.

Being an owner occupant is never an investment. Don't buy with that expectation. It is an expense as an investment must bring income on a monthly/yearly basis. Robert Kiyosaki says a home is not an asset. It goes on the expense side of the worksheet.

That being said I do favor owning for the right reasons.

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I am not sure how you have been identified as Canadian. But your Loonie rate is 25/30 lower than USD , which homes are list at (.From one ex-Edmonton to another?)

Because in one of his many posts, he said he was from Edmonton.

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Rent. Use the Lakeside area for a home base and then explore other cities in Mexico.

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Todays rate $12.56 pesos/per Canadian$. Only time you're going to "worry" about the US$ is if you buy through one of the real estate agencies and not directly from most Mexicans and if you rent from a foreigner. As a Canadian from Ponoka I have no problem with that peso rate nor anything over 9-10 as I pay rent in pesos. I have a friend here from Millet who purchased 9 years ago and he is quite happy and not concerned about having paid in US$ back then.

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OK, here is our math:

Purchased in Ajijic, 2001, for $93,000

Sold in Ajijic in 2004 for net after all expenses: $150,000

Bought in Chapala 2004 for $150,000 and added $82,000 in renovation: Total: $232,000

Sold in Chapala 2014 for $200,000, netting $183,760 for a paper loss of $48,240.

We sold furnished to the tune of about $12,000 USD. for a paper loss of about $60,000.

So, we lived in the houses for 13 years at a cost of about $4,600 per year, or about $385 USD per month, plus maintenane, utilities, etc. Even if it was twice that, we consider it a bargain, as we had two very nice homes, could afford a maid + gardener and had total control of our residence, one of which was quite large.

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RV--Yes that is one way to analyze it, what it costs you to actually live in it. That's why I commented as I did. Each person has to look at his own situation and what's important. The longer one remains in a house, the better the costs come out. Also, the question to ask yourself is "what else will I do with that money"? Can it make me money somewhere else?

Right now, it seems to me there aren't really many secure options for savings and generating income.

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Buy ! Some people have had their homes up for a long time and are anxious to sell so they can leave. Please buy.

With all due respect to Hud's opinion, this is exactly why you should rent rather than buy. Ask yourself why "people have had their homes up for a long time" (hint: because they can take years to sell) and what could make you "anxious to sell so you can leave" (crime, homesickness, missing the grandchildren, health, etc.). You should rent for at least a year or two before even thinking of buying. You want to know about the different neighborhoods, about whether you like living in the village or in a more secluded area, whether it makes sense to buy a stand-alone or a condo, etc. Keep in mind that there are no zoning laws here, no disclosure requirements, and no real mortgage market--so you will probably be paying full price up front. Buying property in Mexico bears little resemblance to buying in the US or Canada. You really want to know what you are getting into, and to think carefully about it before you commit a very large chunk of your net worth to a property you may need to keep on the market for several years before you get an offer. Just my humble opinion (based on 8 years of living in Mexico).

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