| Mexico on $5 a day? Sure, not a problem if you | | | | in the Marina Area of Vallarta, would cost roughly |
| can survive on four cervezas during the day and | | | | twice as much. On average, one can safely |
| sleep in a tent pitched somewhere in the woods | | | | assume that housing costs in PV are |
| during the night. Of course, if you live on the | | | | approximately half of that in the States, keeping |
| Mexican Riviera, you'll only be able to afford a | | | | in mind that housing prices have almost tripled |
| couple cervezas a day but you will be able to | | | | during the ten years we've lived here. |
| sleep on the beach! | | | | One difference is that the house and condo |
| In 1997, we moved to Puerto Vallarta, Mexico, | | | | values have been softening in California and Florida |
| known as Vallarta or PV by the locals, and | | | | during the past year, while the boom in PV is |
| inevitably, when meeting folks in the States, we're | | | | expected to continue for at least another ten |
| asked why in the world we would live there. Most | | | | years. As the baby boomers retire and discover |
| assume it's due to the low cost of living in Mexico | | | | Vallarta, the demand for new houses and condos |
| and that one can do just fine on Social Security. | | | | increases, as do the costs for land, materials, and |
| The reasons why we have lived in Vallarta for | | | | labor, resulting in escalating real estate prices. |
| ten years have very little to do with the cost of | | | | Forecasts suggest that property values will double |
| living. One of the reasons has to do with the | | | | in the Vallarta area during the next five years. |
| latitude of Vallarta which is the same as Hawaii, | | | | There are a couple other significant housing |
| resulting in a climate absolutely perfect for golfing, | | | | related differences. The first has to do with real |
| fishing, tennis, hiking, swimming, or whatever your | | | | estate or property taxes. The annual predial or |
| hobby is for seven months a year, November | | | | property tax in Mexico is about .1% of the |
| through May. | | | | purchase price of the property. Assume you |
| The population of PV, our sleepy little Mexican | | | | bought a condo in PV for $200,000 ten years |
| fishing village located on Banderas Bay on the | | | | ago, keeping in mind that it was twice as much as |
| Pacific Ocean, just surpassed 350,000 making it | | | | you could have bought in the States. It's value |
| equal in size to Anaheim, California or twice the | | | | today would be about $600,000, however it's still |
| size of Boise, the capital of Idaho. Of the 350,000 | | | | on the books as $200,000 and it's annual taxes |
| inhabitants, there are close to 50,000 North | | | | are approximately $200. A condo with the same |
| Americans during the seven month "high season". | | | | cost basis of $200,000 ten years ago located in |
| They have retired here in order to enjoy the | | | | Florida or California could be taxed anywhere |
| many world class restaurants, seven magnificent | | | | from $5,000 to $15,000 today and remember, |
| golf courses, world class deep sea fishing, modern | | | | this $200,000 condo would have been half of |
| supermarkets and shopping malls, and night life | | | | what you could have purchased in Vallarta. Also, if |
| galore. Most of these North American residents of | | | | you're a resident for more than five years in |
| Vallarta have satellite TV with 350 channels, high | | | | Vallarta and can show that it's your primary |
| speed internet service, air conditioning, and all the | | | | residence, there is no capital gains tax upon the |
| other modern conveniences that could be found in | | | | sale of your property. Annual automobile taxes |
| the States. Clean water, clean food, modern | | | | and consumption taxes are equivalent to those in |
| hospitals with the latest in sophisticated equipment | | | | the States. |
| for first class medical care, and a high regard for | | | | First class medical and dental care is available in |
| safety will be found here in PV. Actually, there are | | | | Vallarta at roughly half the cost of that in the |
| very few reasons not to live in Vallarta. | | | | States. Skilled technicians for auto repair, |
| We haven't lived here for ten years because it's | | | | electronics repair, carpentry, plumbing, air |
| cheap! As an example, gasoline is about 8 pesos | | | | conditioning, and electrical work are about the |
| per liter or $4.00 per gallon. Electricity is about the | | | | same as in the States. Of course, there are |
| same as in the US, while telephone calls to the | | | | many non-professionals available in PV that will |
| States are about four times as much as the | | | | work for half the price, but you get what you |
| same calls from the States. Food in the | | | | pay for! The one exception has to do with |
| supermarkets is about the same as in the US; the | | | | masonry. For a fourth the price of that in the |
| imported products are much more, while the | | | | States, you can have beautiful granite counter |
| locally grown products may be much less. | | | | tops, marble floors, tile work such as pools, etc. |
| Imported hard-goods, such as electronics, at | | | | Another major cost difference is that of unskilled |
| Sam´s Club, Walmart, Costco, Home Depot, | | | | labor such as maids, gardeners, or handymen. |
| or Office Depot, can be twice as much as the | | | | They are readily available for $20 per day but |
| same products in the States. Automobiles are | | | | don't expect the most efficient work in the world. |
| approximately 20% more expensive, imported | | | | Again, you get what you pay for! |
| clothing 50% more expensive, etc. From a | | | | In summarizing, the cost of living in Vallarta is |
| residents perspective, NAFTA isn't working too | | | | probably somewhat lower than that in Florida and |
| well because all imported items are taxed to the | | | | substantially less than California, given similar |
| hilt and cost substantially more than they do in | | | | standards. It is probably higher than Milwaukee, |
| the States. | | | | Wisconsin or Cincinnati, Ohio but there's no |
| Housing, on the other hand, is generally much | | | | comparison in life styles. One thing is for certain, |
| lower than in the States. Of course, this depends | | | | we don't know of any Americans or Canadians |
| on where in the States and where in PV, but as | | | | living in PV solely on their Social Security |
| an example, a small house in Central Florida would | | | | payments. In order to live on a tight budget in |
| compare to a casita in PV with no view and | | | | Mexico, you have to head inland, away from the |
| would cost twice as much. A grand estate in | | | | tourist areas, away from Paradise, and can |
| Pebble Beach would compare to a luxurious villa | | | | expect a totally different life style. For the |
| on the hillside overlooking Banderas Bay and would | | | | money, Vallarta is extremely hard to beat, but it's |
| cost two to four times as much. A 2,000 square | | | | certainly not cheap! |
| foot condo in St. Petersburg, Florida, similar to one | | | | |