Real Estate Market

[CalgaryBoy]

I have rented each winter for many years in Ajijic. The mistake I made was not buying when I first visited the area but that is water under the bridge. I am watching the market and have noticed because of covid there were a large number of rental vacancies available this year. Do you feel house prices will come down or like in some area's of the US and Canada go though the roof.  

[Mainecoons]

Your best bet is to ask this question of an active local real estate agent.  What I have heard is the market is very strong under $300K and in and adjacent to Ajijic.

[TelsZ4]

The market is strong because of the Tapatio’s  wanting to move out of the city...

[NuevaVida]

It's a mixed bag, since there are Tapatio's who are buying up homes after being stuck in the city due to covid. But there are also some interesting properties used for either Airbnb or Hotels that are for sale now at very reasonable prices. Maybe that could be a great family house to own, or maybe no one will want to purchase and run a hotel knowing how quickly things can change.  

[Ferret]

Or maybe someone will buy them and turn them into apartments... live in one and rent the rest.

The Mexican real estate market is very interesting. Since you pay cash for a home, if you want to sell it you can play a very long waiting game if it's not an emergency (aka fire sale). No mortgage, no major utilities and very little paid in taxes... in other words, no big hurry at all.

[Bob Liu]

I’ve been watching the housing market from a distance for some time.  I’m looking in the general price range homes for general gringos.

Well priced homes sold quickly, like anywhere else. I don’t see big pricing changes in general. Only thing unusual (blame it on Covid) is the recent several (3 or 4) hotels/B&B's showing up on the market. Anyone want a 9 bedroom 9 bathroom home? Great location, good price!
 

[Mainecoons]

6 hours ago, Bob Liu said:

I’ve been watching the housing market from a distance for some time.  I’m looking in the general price range homes for general gringos.

Well priced homes sold quickly, like anywhere else. I don’t see big pricing changes in general. Only thing unusual (blame it on Covid) is the recent several (3 or 4) hotels/B&B's showing up on the market. Anyone want a 9 bedroom 9 bathroom home? Great location, good price!
 

I'm told the other thing that has affected small hotels and traditional B&Bs is a big increase in Air B&B (which usually do not have the second B at all) by individuals looking to make a little money on the side and priced often significantly lower than the traditional offerings.  I have two examples on my block alone, priced at half the rate of the long term B&B next door.

We use air B&B a lot in the U.S., it has opened up a whole new option when traveling.  It is really expanding here in Mexico.

[pappysmarket]

9 hours ago, Ferret said:

Or maybe someone will buy them and turn them into apartments... live in one and rent the rest.

The Mexican real estate market is very interesting. Since you pay cash for a home, if you want to sell it you can play a very long waiting game if it's not an emergency (aka fire sale). No mortgage, no major utilities and very little paid in taxes... in other words, no big hurry at all.

...And if a Mexican house doesn't sell in say 6 months...they raise the price. As I was told, it must be worth more after a half a year.  Worked for us, we raised the price $50,000 US and bingo!

[virgo lady]

6 hours ago, Mainecoons said:

I'm told the other thing that has affected small hotels and traditional B&Bs is a big increase in Air B&B (which usually do not have the second B at all) by individuals looking to make a little money on the side and priced often significantly lower than the traditional offerings.  I have two examples on my block alone, priced at half the rate of the long term B&B next door.

We use air B&B a lot in the U.S., it has opened up a whole new option when traveling.  It is really expanding here in Mexico.

Not to sidetrack the thread but IMHO AirB&B has become the disaster to the accommodation market that Uber is / was to transport.     Not only do they undercut legit owners who pay taxes and support their local cities, but many condo bldgs and private homes have become nightmares of revolving door unchecked traffic, illegal use of premises for drug deals, massive loud parties, and many other problems that became even worse during Covid.      Air B&B won't police it, either, leaving many municipals either hanging or having to ban it or spend a lot of $$ to track / enforce it.       I know it can add usefulness and value if used properly however right now the scales are tilted the wrong way.    I won't support it as a user, and would certainly never list my own property on it.

[Mostlylost]

AIr BnB  landords are paying taxes. 

Starting June 1st. 2020 AirBnB is a tax witholding agent. Amongst It’s maior obligations are to: Issue a CFDI to the Host with a tax breakdown. International Hosts without a permanent address in Mexico will be withheld 16% IVA and 20% ISR. 

In some, but not all locations they are witholding local hotel taxes as well

[Bisbee Gal]

We've used Airbnb all over the world.  We have also had neighbors who operated part of their property as an Airbnb rental, when we lived in FL.  Never any major issue staying at an Airbnb, or with any of the Airbnb guests staying across the street from our FL home.  

FL's big hotel industry has made it difficult for Airbnb's to flourish in many areas (state laws that override local ordinances that want to encourage Airbnbs).  State legislators cater to the large hotels in exchange for campaign $$$.  

Airbnb (as well as VRBO.com) enables us to rent a house when we travel, normally for less than the cost of a decent hotel room nearby.  

Yes I agree they should pay tourist lodging taxes and in most FL counties Airbnb is proactive in registering their clients and paying these taxes directly for their clients with the local taxing authority.  

Have I read stories about parties at Airbnb rentals that happen every so often?  Sure, but 99% of the time you will have a better night's sleep at a private home than you will at a large hotel. 

We are also fans of regular B&B's, too.  Not a fan of hotels or motels.  

 

 

[virgo lady]

1 hour ago, Bisbee Gal said:

We have also had neighbors who operated part of their property as an Airbnb rental,

Hi BG, I think that part of your comment really gets to the heart of it:     the term "B&B" has always implied onsite owner / operators.     And the vast majority of the problems are from just the opposite - short term rentals of empty condos and houses where no one checks who the renter is or what they do once they arrive.       Several major cities have realized this and brought that in as a condition - MUST be an owner occupied property to operate as an AirB&B in their jurisdiction and I hope that spreads.   

[AlanMexicali]

No one checks who the renters are?

Responsible AirB&B owners certainly do check who they rent to. They would not want their neighbors angry. Each renter has opinions from previous owners who rented to them. If it is a first time renter most owners will not accept them. The owners also have scores of opinions for renters to check and the AirB&B site automatically posts owner cancellations in the owners opinion section to warn renters of this activity. All countries collect taxes from owners I presume. AirB&B can not operate in countries where their members are not paying taxes and the site submits it's financial records to the local tax collector. If as a renter your opinions are often very negative [ fussy cheapskate ] owners will usually reject your request. Be liberal writing a review to keep your reputation from taking a dive.

[Bisbee Gal]

Most Airbnb owners are responsible....if for no other reason that they want to protect their property, keep repairs to a minimum.  

We usually rent Airbnb houses, but in EU cities we have to settle for apartments.  The owners have strict check-in times. so guests do not clomp down hallways, with their luggage bashing into other apartment doors any time of day or night.  

In full disclosure I was administer of lodging taxes in a locality adjacent to Washington DC.  Way before Airbnb existed, we got complaints from condo owners in a very posh brand new high rise, where an individual had bought a handful of new condos for the express purpose of short-term rental income.  We had nothing in our Code allowing this on several fronts (zoning, taxation). 

Rather than say 'no' the locality amended both its zoning and tax provisions to allow it with restrictions.  The complaining neighbors were part of the process leading to these ordinance changes.  And there was never another complaint.  

@Upfront It sounds like your family's issue with an Airbnb near them is due to a lack of enforcement and/or a lack of local ordinances that speak to Airbnb's etc. 

 

[Mainecoons]

We've never gotten a bad air BnB.  OTOH we've screened them pretty carefully.  One of our most favorites is a place in the historic district of Fort Worth where we stay when doing our annual doctor visits.  I also notice air BnB has a much better selection of beach places in Manzanillo at much better prices than VRBO.  

We plan on using it when we finally get to Mazatlan later this year.

 

[AlanMexicali]

19 minutes ago, Upfront said:

no idea what you are basing your opinions on but even a cursory check on google will show you thousands of complaints against renters AND the company. and it was only last year that mexico insisted on registration and taxes from airbnb, so maybe think again about ALL COUNTRIES COLLECT TAXES.

even airbnb says it doesnt have to collect taxes in many places https://www.wired.com/story/inside-airbnbs-guerrilla-war-against-local-governments/

AMLO instructed SAT to collect a concocted businesses online tax on AirB&B's website beyond profit taxes and IVA they already were paying which no other country has. [ he included Amazon also ] Probably one of his stupid ideas that was illegal and never happened like much of what he says. Nothing to do with them not reporting their accounts to SAT. They were.

[gogirl]

I was looking forward to info on the real estate market not Air B&Bs.

[AlanMexicali]

13 minutes ago, Upfront said:

i dont buy it. please give us a reference. and that doesn't answer your sweeping statement about taxes

I don't care if you don't buy it. If you want proof do it yourself. I  posted what I understand how it works. 😊

[virgo lady]

2 minutes ago, gogirl said:

I was looking forward to info on the real estate market not Air B&Bs.

The best advice is in the 2nd post from MaineCoons.    And AirB&B's, in a way, give a strong indicator of a part of any market so it is good data in that sense.

[mudgirl]

I have had a private room/bath home share Airbnb listing for several years. I only rent to one guest at a time, most stay for a week to 2 weeks (no constant coming and going of different people every night) and the neighbors wouldn't even know I had Airbnb guests if I didn't tell them, because my guests are quiet. 

The notion that Airbnb hosts don't pay taxes is false. Airbnb is now collecting and remitting taxes to SAT for all Mexican hosts, there's no way around it. And hosts in many parts of the world pay a lot for permits, licensing, etc in addition to taxes.

For sure there has been a lot of under the table stuff, but no more so than any other business.

The problem is Airbnb hosts who rent out large homes, don't care if the renters disturb the neighbors, they are only in it for the money. These types give Airbnb a bad name and hosts like me hate them as much as anyone. But they are the minority. People just have a notion that Airbnb is synonymous with 'party house' because those are the ones that come to public notice.

But tarring all Airbnbs or hosts with the same broad brush is wrong and means the person doing that has no idea of the range of places that are listed on Airbnb, from campsites to tiny houses to private rooms in a host's home to farm stays to just about anything you can imagine.

I've been closed to bookings since March due to COVID, as I'm certainly not going to risk sharing my kitchen with anyone now, but I miss doing it- I've had guests from all over the world, all if whom have been very cool and interesting folks, and some have become friends I keep in touch with.

 

 

[lakeside7]

10 minutes ago, gogirl said:

I was looking forward to info on the real estate market not Air B&Bs.

Well what you expect and what you get on this forum is not the same. People love to go off on tangents to express their knowledge on totally unrelated subjects, that is what makes it so interesting, and now the Pandemic is driving people more crazy.

I am not sure the reasons but their does seem to be more homes for sale....... and rentals at all time high due to lack of visitors, and most owners are really interested in making a deal if only to get out their actual cost. I think there are some great homes available in the $500K range..yes a buyers market.

Just remember that a tranquil location today can turn into a nightmare when new neighbors comes and bring 3/4 dogs. Before you buy visit the location at all times of the day and night and get an inspection report. Good luck

[AlanMexicali]

14 hours ago, Upfront said:

and i dont care if you think you understand. what a choice thing to say

 

16 hours ago, AlanMexicali said:

I don't care if you don't buy it. If you want proof do it yourself. I  posted what I understand how it works. 😊

 

20 hours ago, AlanMexicali said:

AMLO instructed SAT to collect a concocted businesses online tax on AirB&B's website beyond profit taxes and IVA they already were paying which no other country has. [ he included Amazon and Netflix also ] Probably one of his stupid ideas that was illegal and never happened like much of what he says. Nothing to do with them not reporting their accounts to SAT. They were.

You were correct. The tax they added to these online platform companies based abroad doing business in Mexico was a 10 percent  IVA WITHHOLDING tax not adding an additional tax. 

Quote: " ... in the case of IVA, companies are the bridge to obtain it, because they charge the tax on clients and then they hand it over to the treasury,..."

If the AirBnB owners collect the 16 percent IVA tax from their renters and submit it to SAT then the AirBnB plateform will get back the 10 percent IVA tax SAT is withholding eventually.

https://www.google.com.mx/amp/s/www.altonivel.com.mx/empresas/por-que-amazon-airbnb-y-netflix-deben-pagar-mas-impuestos-en-mexico/%3famp

Google Translation: 

"Digital platforms, such as Amazon, Netflix, Airbnb or Spotify, are in the sights of the Mexican government to be included in a tax scheme that allows greater tax collection. Today, the challenge is to establish a tax model that does not affect consumers and the development of the digital economy.

The initiative that emerged in the lower house is aimed at companies that have their fiscal domicile in other countries, but that provide services in Mexico, pay taxes on the income they receive from local consumers, but that does not violate the commitment of President Andrés Manuel López Obradorde not create new tax burdens in the first three years of his administration.

Alfonso Ramírez, president of the Budget and Public Account Committee of the Chamber of Deputies, said that the parliamentary group of the National Regeneration Movement party (Morena) will present a proposal to tax the services and products offered through online platforms .

"Companies must pay the percentage of ISR (Income Tax) for the profits they obtain, this is how this tax is charged to the company, but, in the case of IVA, companies are the bridge to obtain it, because they charge the tax on clients and then they hand it over to the treasury, so it is probable that, if applied to digital platforms, the cost of their services will increase by 16%, ”said Edilberto Castro, tax consultant.

This Wednesday, August 7, the Taxpayer Defense Attorney (Prodecon) signed an agreement with the Budget and Public Account Commission of the Chamber of Deputies with the intention of updating the Value Added Tax (IVA) Law, since it has been seen overwhelmed by the digital economy.

"The current legislation presents practical problems to collect the tax," said Prodecon.

The proposal of the Prodecon and the Chamber of Deputies intend to take into account the recommendations of the Organization for Economic Cooperation and Development (OECD), while it is expected that the collection will be carried out through a withholding mechanism through the alternative of a registry for the platforms to calculate and pay your tax.

"It is proposed to establish a 10% withholding only for IVA purposes in the provision of services," said Prodecon.

The proposal to tax companies in the digital economy will be presented during the next session, which begins on September 1, and will be considered within the Economic Package for 2020, which the Ministry of Finance and Public Credit (SHCP) will present before Congress no later than September 8.

"We have given ourselves the task of carefully analyzing the practices and recommendations, to identify the aspects that could enrich the proposal," said deputy Ramírez Cuéllar in a statement issued on July 31."

[Floradude]

The AirB&B next to my house is known at the party house in my street.  Last night 4 car loads partied all night and the noise is still going now at 10:30 am.  At this rate they are shooting for 24 hours of continues loud music with a terribly loud beat accompanied with raucous noise and singing.

[rafterbr]

We recently decided to buy a rent house or two in the Chapala area.  When I first came here 8 years ago they were readily available for $40,000 to $60,000 US.  Even 3 years ago there were some available for this price.  Now there is none,  I don't know about the higher end but the lower and mid-level real estate has definitely seen a rise in value.  I thought the virus would have an effect but not so.  Maybe the people from Guadalajara are buying for weekend retreats?  

[TelsZ4]

The people from Guadalajara are renting and buying at Lakeside,  In the complex that I live in several units have been rented on a one year lease by Tapatio’s, and the unit is being shared by several members of the family. Parents, Grandparents, Brothers, Sisters, Children, In-laws, Aunts, Uncles, Cousins. And just about every other relative you can think of..