By: Melissa Parietti | Investopedia.com
Mexico has received negative press about its safety as a destination for foreigners and expatriates. Despite the media’s coverage of border city violence, much in the same way that certain parts of the United States are safer than others, Mexico is host to several cities that can provide a safe location for retirees looking to move to a new country in pursuit of lower prices and a temperate climate. Retirement in Mexico helps those looking to retire abroad maintain a closer distance to the U.S. than European or South American destinations.
Over 1 million Americans are living in Mexico, and Americans comprise 75% of the documented immigrant population. Americans living in Mexico report that the ability to survive on a monthly budget of $1,000 encouraged them to move in conjunction with a higher-than-expected cost of living in the U.S. upon entering retirement.
Avoiding Cities With High Rates of Crime
Retirees looking to settle in safe locations in Mexico should consider factors that are typically associated with crime rates such as the presence of casinos and other gambling facilities. Specific to Mexico, border cities have reported higher crime rates. Overall, crime in Mexico has been on the decline over the past 100 years. Retirees may benefit from avoiding certain cities associated with higher levels of crime such as Tijuana and Ciudad Juarez. The U.S. Department of State issued a travel warning for those entering Tamaulipas, Guerrero, Michoacán, Estado de Mexico and Morelos.
Safe Destinations to Consider
Mazatlán is located on Mexico’s coast and is a popular destination for Americans and other tourists. The city has undergone an architectural facelift to encourage tourist activity, and new restaurants and businesses have sprung up as a result. Teatro Ángela Peralta hosts the city’s cultural and outdoor events. An attractive feature of the city is its 20 miles of beaches along with commercial infrastructure, museums and carnival celebrations. Mazatlán’s airport also underwent renovations. The population of 350,000 includes retirees from America, Canada and Europe. The city was a very popular vacation destination in the 1970s. As a large city, Mazatlán has several major attractions including the town square, Centro Historico; a lighthouse; and a large city market called Mercado Pino Suarez.
Campeche is host to the Mayan ruins and has a population of 250,000. The city was founded in 1540 and is a UNESCO World Heritage Site. Architecture in Campeche is made up of restored colonial and features colorful buildings. Restaurants are plentiful, and the price of meals is low with larger meals at restaurants at $10 and quick fare at $1. Even cheaper eats can be purchased at local markets where food is 30 to 50% less than what is charged in America. Unrenovated sites for $75,000 for retirees are plentiful, while renovated apartments and homes are more difficult to find.
Guadalajara is an urban location and hosts the country’s most popular soccer team, Club Deportivo Guadalajara, along with a high-capacity stadium that holds close to 50,000, called Estadio Omnilife. The city has many historical sites including the Guadalajara Cathedral and Plaza Guadalajara, which hosts an underground market. The city has a reputation for being a safe location in Mexico. Real estate in Guadalajara is more expensive than the remainder of the country. New properties with three bedrooms and a pool can be purchased for $200,000.
San Miguel de Allende is considered a retreat from Mexico City and plays host to a large population of American business owners and retirees. The city has a population of 140,000, and it is a UNESCO World Heritage Site known for its art community. Historic sites include Santuario de Atotonilco, a series of churches; El Jardin, the main square; and El Charco del Ingenio, a large garden. San Miguel de Allende hosts several museums, art institutes, music festivals and over 100 art studios. The city is free of casinos and chain stores, as franchises are disallowed from opening there. San Miguel de Allende is a 10-hour drive from the U.S. border and has a U.S. consulate. The lower end of home prices is $84,000, while the average sale price is $370,000. Cab fare is affordable at $2.50 a ride from many parts of the city. Property taxes on a home with a pool are estimated at around $300 a year. Food is affordable, with a breakfast for three costing around $15.
Mexico is experiencing a period of recovery following a drastic increase in interest rates in the 1990s and 2000s that negatively affected the country’s banks. Inflation has been between 2.75 and 3.5%. Mexico relies heavily on exports and imports to support its economy. Its open economy supports lower prices in stores and is conducive to competition between businesses. The country’s banking system is experiencing an expansion phase. Home construction and mortgages are expected to increase in 2015. The Mexican private mortgage market is not nearly as large as the American mortgage market, and interest rates are relatively high at 13.5% as of June 2015. Previously, mortgage terms were limited to 15 years and they have since been expanded to 30-year terms.
Purchasing Real Estate in Mexico
There are strict laws in Mexico on the purchase of real estate by foreigners. The system is called fideicomiso and requires foreigners to purchase real estate through trusts rather than allowing direct ownership. While proposed laws in Mexico may have supported direct ownership of beachfront properties, these laws were rejected by the government.
Former President Felipe Calderon was partially responsible for an increase in violence in Mexico, as his policies supported a higher police presence to combat crime issues. The higher police enforcement and presence caused breakouts of cartel-police border violence that was previously absent. As of November 2015, the president is Enrique Peña Nieto, who was elected in 2012. Nieto has taken less strident measures to combat Mexican crime. The wave of violence that passed through Mexico was concentrated between 2008 and 2010, and 46% of homicides were in five states: Baja California, Durango, Sinaloa, Chihuahua and Guerrero. Nieto is a member of the Institutional Revolutionary Party, and has supported low taxes and direct foreign investment.