# Property Management/Rental



## aborgman (Jan 19, 2016)

My wife and I are looking to buy a place in Cozumel in about 5 years. I've done a good bit of research on the buying process, and feel reasonably comfortable with my understanding of that aspect.

The property would serve as a vacation property for us until we retire, and upon retirement we would live there ~6 months per year. We have no plans to ever live there full time.

My question is - 

How does one avoid becoming an employer while maintaining a property they aren't living in full time? 

How does one avoid becoming enmeshed in the labor laws, while still observing all Mexican legalities and hiring people to get work done?


Don't want to get involved in the sort of horror story situation one sometimes reads about and want to adhere to all local law.

My wife and I are looking to buy a place in Cozumel in about 5 years. I've done a good bit of research on the buying process, and feel reasonably comfortable with my understanding of that aspect.

The property would serve as a vacation property for us until we retire, and upon retirement we would live there ~6 months per year. We have no plans to ever live there full time.

My questions - 


1) Is it possible to make enough rental income on a small place to come close covering property management/upkeep? I don't expect to turn a profit, just pay for keeping it up when we aren't using it.


2) Is it possible to hire a property management company to administer the rental and take
care of all fiscal obligations (rental taxes, being the employer for service folks, etc)?

3) If the answer to #2 is no - how ridiculous (and costly) is it to administer, and is the overhead/risk so high as to make it not worht the effort?


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## sparks (Jun 17, 2007)

I just know that if you have to pay taxes on income no matter how minimal ...... you need a tax number .... and you need a resident Visa for that. Not sure a property manager would take on that responsibility

I would wait until you're ready to do 6 months and maybe never rent it


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## sparks (Jun 17, 2007)

A property management company could be the employer. Absentee landlord sounds like trouble to me


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## coondawg (May 1, 2014)

Surely there is a couple out there that you could find and be happy with that would live in your place while you are not there and do the maintenance, pay their own utility bills, and have use of your home while you are not there. Seems attractive to me that way, especially if it were for several ,months, not just a few weeks or days. Seems like a win-win.


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## TJGUY (Jan 5, 2016)

I would look at some kind of rental like Air BnB or VRBO. Find someone trustworthy to administrate it on your behalf. That way you don't have full time renters there.


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## TundraGreen (Jul 15, 2010)

Moderator's note: This was two separate threads, one covering the rental side of the question and the other, the employer side of the question. I merged them before I realized there was that difference between them: they both started with the same statement. However, the issues are closely related and I am not going to try to unmerge them.

Regards,


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## Isla Verde (Oct 19, 2011)

TJGUY said:


> I would look at some kind of rental like Air BnB or VRBO. Find someone trustworthy to administrate it on your behalf. That way you don't have full time renters there.


I've never owned property that I wanted to rent part-time, but if I did I'd rather rent to one person or family who I trusted to keep the place in decent shape than a series of tenants who I knew little or nothing about.


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## TJGUY (Jan 5, 2016)

Isla Verde said:


> I've never owned property that I wanted to rent part-time, but if I did I'd rather rent to one person or family who I trusted to keep the place in decent shape than a series of tenants who I knew little or nothing about.


I have rented out my property here in Mexico and I find that their are very few renters that will take care of your property. I would rather rent it out to tourists at a higher rate than to have the long term wear and tear that it would receive form a long term renter.


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## Isla Verde (Oct 19, 2011)

TJGUY said:


> I have rented out my property here in Mexico and I find that their are very few renters that will take care of your property. I would rather rent it out to tourists at a higher rate than to have the long term wear and tear that it would receive form a long term renter.


So do the tourists not cause wear and tear to your property? Or do you come in and clean up after each of them leaves?


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## TJGUY (Jan 5, 2016)

Isla Verde said:


> So do the tourists not cause wear and tear to your property? Or do you come in and clean up after each of them leaves?


Tourists pay a cleaning fee. So yes it gets cleaned from every time it is used .
Also you have a credit card number in case there are any damages.
With a renter after a time if they don't pay you. You will have a hard time (months) to get them out. Many times the rent you collected will only pay to restore the property if you are lucky.

Also you will not have tourists everyday so the amount of people living in your place is a fraction of what it would be if you have full time renters. Also tourist don't typically use the premises all day long since they are out exploring their vacation choice.

If you are in a place where tourists frequent then you will make more money in the long run than you would otherwise.


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## lagoloo (Apr 12, 2011)

A good property management company will take about 10% plus IVA, be the one responsible for screening renters, collecting the deposit, getting repair persons to the tenants as needed, along with arranging cleaning services. Who wants to be a long distance landlord or hope that some couple that you "trust" might turn into nothing but trouble? Been there, seen that. Having a go-between is well worth their fees, IMO.


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## ojosazules11 (Nov 3, 2013)

Isla Verde said:


> I've never owned property that I wanted to rent part-time, but if I did I'd rather rent to one person or family who I trusted to keep the place in decent shape than a series of tenants who I knew little or nothing about.


The other problem with long-term rentals in some parts of Mexico is that if a property is still in the _comunero_ or _ejido_ system, a long-term renter could try to claim rights to the property. This doesn't apply to a 6-month rental as in the case of the OP, of course, but in Tepoztlan there have been cases where long-term (several years) renters have successfully obtained the rights to the property they were renting from an absentee landlord. One strategy used by landlords to avoid this risk is to only rent for one year max to the same person. Renting to foreigners instead of locals can be another strategy, as mentioned by Andreas Montoya on another thread.


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## RVGRINGO (May 16, 2007)

I suggest that the original poster remain a tourist until ready to reside full time. The other options are seldom successful in the rental market.


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## TJGUY (Jan 5, 2016)

Don't need to rent it either. I can understand someone wanting to move here and go ahead and purchase now for the future. If you are coming and want to enjoy your place until you are here full time. Or like me you have a home in more than one place and choose to spend time in different places. However you must take care for the security of the place. I suspect the poster wanting to rent it is more a matter of security rather than finances.


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## Andreas_Montoya (Jan 12, 2013)

Years ago I knew a man who bought a house in Cozumel hoping to rent it out to divers to pay it off. After buying it, he discovered that it was zoned as a "Single family dwelling" so he was stuck there with no income and a house. Make sure it can be rented, sounds simple but things are different here.

Here is a Cozumel forum, they can probably answer your questions.
Cozumel My Cozumel Discussion Forums


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## RVGRINGO (May 16, 2007)

Can a foreigner rent out property that is owned by a bank fideicomiso, since he cannot own property near the coast by simple deed/escriura?
Will the foreigner become Residente Temporal, at least, with INM permission to engage in lucrative activity, and get the required RFC, CURP and services of a Mexican acoountant for the necessary monthly reports? If so, will he be in Mexico every year at the specified time to renew his INM status, etc.?
Those are just some of the reasons, beyond the rentability, security and management problems, that cause me to suggest that the OP continue to be a tourist, unless permanent residence is planned.


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## ojosazules11 (Nov 3, 2013)

RVGRINGO said:


> Can a foreigner rent out property that is owned by a bank fideicomiso, since he cannot own property near the coast by simple deed/escriura?
> Will the foreigner become Residente Temporal, at least, with INM permission to engage in lucrative activity, and get the required RFC, CURP and services of a Mexican acoountant for the necessary monthly reports? If so, will he be in Mexico every year at the specified time to renew his INM status, etc.?
> Those are just some of the reasons, beyond the rentability, security and management problems, that cause me to suggest that the OP continue to be a tourist, unless permanent residence is planned.


Another option might be to register it as a business (una empresa) and then get an RFC for the business (persona moral) rather than for an individual (persona física). I'm certainly not an expert on this, but from what I've read on Mexican government websites, I think a person can own a business without having Resident status. It would at least be worth checking into. 

I'm another one who bought property long before retirement. There were extenuating circumstances affecting why we bought when and where we did (to help out a family member). The biggest headache is the security question, as we are away most of the year. It sometimes keeps my husband awake at night. Recently a ladder and a gas tank were stolen. Some speculate it was one of our nieces' ex. The niece says maybe it was the neighbour. We choose not to speculate, figuring it's a known risk with no one living there, and my husband has plans to improve security to make it that much harder for any would-be thief. 

We also are thinking about starting to do short or medium term rentals, both for a little extra income but especially to not have the house unoccupied for long stretches. Fortunately, Tepoztlan is a tourist destination, so it's feasible to do this type of rental, and my husband is Mexican and has an RFC, so no issues with generating income. The main issue will be if we hire a property manager to take care of the day to day in looking after a rental, or hire a family member to do it.


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## TundraGreen (Jul 15, 2010)

Be careful in choosing a property manager. I had a friend with a condo in Panama. He changed his mind about living there, so he rented it and hired someone to manage it. After some time the manager told him the tenants left and the condo was empty. But, in reality, the manager was just keeping the rent.

My second concern about renting as an absentee landlord is Mexican law on squatting and possession. I am no expert, but I hear stories about people taking over ownership of the property.


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## ojosazules11 (Nov 3, 2013)

TundraGreen said:


> Be careful in choosing a property manager. I had a friend with a condo in Panama. He changed his mind about living there, so he rented it and hired someone to manage it. After some time the manager told him the tenants left and the condo was empty. But, in reality, the manager was just keeping the rent.
> 
> My second concern about renting as an absentee landlord is Mexican law on squatting and possession. I am no expert, but I hear stories about people taking over ownership of the property.


Thanks, Will, that's a good heads up about the property manager. We'll probably be having my sister-in-law do the "on the ground" piece of meeting and orienting guests, cleaning, stocking the basics, etc. If the rental is through web based booking sites, the money will be paid electronically, and then we will pay my SIL for her services, so she wouldn't have to be handling the finances of the rental. We have the advantage of family and friends we trust in Tepoz, and they are willing to keep an eye on things, but we also don't want to take advantage of their good will. 

The whole issue of people living in a place long-term and then claiming rights to the property is exactly why we do not want to do a long-term rental. Also, we want to have use of our place when we do go to Mexico. I enjoy staying with friends or family for short stints, but I definitely relax and enjoy my vacation time more having our own place.


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## TJGUY (Jan 5, 2016)

ojosazules11 said:


> Thanks, Will, that's a good heads up about the property manager. We'll probably be having my sister-in-law do the "on the ground" piece of meeting and orienting guests, cleaning, stocking the basics, etc. If the rental is through web based booking sites, the money will be paid electronically, and then we will pay my SIL for her services, so she wouldn't have to be handling the finances of the rental. We have the advantage of family and friends we trust in Tepoz, and they are willing to keep an eye on things, but we also don't want to take advantage of their good will.
> 
> The whole issue of people living in a place long-term and then claiming rights to the property is exactly why we do not want to do a long-term rental. Also, we want to have use of our place when we do go to Mexico. I enjoy staying with friends or family for short stints, but I definitely relax and enjoy my vacation time more having our own place.


Sounds like you got it right. Congratulations.


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