Live In Mexico-cheap, Huh?

Mexico on $5 a day? Sure, not a problem if youin the Marina Area of Vallarta, would cost roughly
can survive on four cervezas during the day andtwice as much. On average, one can safely
sleep in a tent pitched somewhere in the woodsassume that housing costs in PV are
during the night. Of course, if you live on theapproximately half of that in the States, keeping
Mexican Riviera, you'll only be able to afford ain mind that housing prices have almost tripled
couple cervezas a day but you will be able toduring 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, andduring the past year, while the boom in PV is
inevitably, when meeting folks in the States, we'reexpected to continue for at least another ten
asked why in the world we would live there. Mostyears. As the baby boomers retire and discover
assume it's due to the low cost of living in MexicoVallarta, 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 forlabor, resulting in escalating real estate prices.
ten years have very little to do with the cost ofForecasts suggest that property values will double
living. One of the reasons has to do with thein 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 yourestate or property taxes. The annual predial or
hobby is for seven months a year, Novemberproperty tax in Mexico is about .1% of the
through May.purchase price of the property. Assume you
The population of PV, our sleepy little Mexicanbought a condo in PV for $200,000 ten years
fishing village located on Banderas Bay on theago, keeping in mind that it was twice as much as
Pacific Ocean, just surpassed 350,000 making ityou could have bought in the States. It's value
equal in size to Anaheim, California or twice thetoday would be about $600,000, however it's still
size of Boise, the capital of Idaho. Of the 350,000on the books as $200,000 and it's annual taxes
inhabitants, there are close to 50,000 Northare 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 theFlorida or California could be taxed anywhere
many world class restaurants, seven magnificentfrom $5,000 to $15,000 today and remember,
golf courses, world class deep sea fishing, modernthis $200,000 condo would have been half of
supermarkets and shopping malls, and night lifewhat you could have purchased in Vallarta. Also, if
galore. Most of these North American residents ofyou're a resident for more than five years in
Vallarta have satellite TV with 350 channels, highVallarta and can show that it's your primary
speed internet service, air conditioning, and all theresidence, there is no capital gains tax upon the
other modern conveniences that could be found insale of your property. Annual automobile taxes
the States. Clean water, clean food, modernand consumption taxes are equivalent to those in
hospitals with the latest in sophisticated equipmentthe States.
for first class medical care, and a high regard forFirst class medical and dental care is available in
safety will be found here in PV. Actually, there areVallarta 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'selectronics repair, carpentry, plumbing, air
cheap! As an example, gasoline is about 8 pesosconditioning, and electrical work are about the
per liter or $4.00 per gallon. Electricity is about thesame as in the States. Of course, there are
same as in the US, while telephone calls to themany non-professionals available in PV that will
States are about four times as much as thework for half the price, but you get what you
same calls from the States. Food in thepay for! The one exception has to do with
supermarkets is about the same as in the US; themasonry. For a fourth the price of that in the
imported products are much more, while theStates, 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, atAnother 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 theThey are readily available for $20 per day but
same products in the States. Automobiles aredon't expect the most efficient work in the world.
approximately 20% more expensive, importedAgain, you get what you pay for!
clothing 50% more expensive, etc. From aIn summarizing, the cost of living in Vallarta is
residents perspective, NAFTA isn't working tooprobably somewhat lower than that in Florida and
well because all imported items are taxed to thesubstantially less than California, given similar
hilt and cost substantially more than they do instandards. It is probably higher than Milwaukee,
the States.Wisconsin or Cincinnati, Ohio but there's no
Housing, on the other hand, is generally muchcomparison in life styles. One thing is for certain,
lower than in the States. Of course, this dependswe don't know of any Americans or Canadians
on where in the States and where in PV, but asliving in PV solely on their Social Security
an example, a small house in Central Florida wouldpayments. In order to live on a tight budget in
compare to a casita in PV with no view andMexico, you have to head inland, away from the
would cost twice as much. A grand estate intourist areas, away from Paradise, and can
Pebble Beach would compare to a luxurious villaexpect a totally different life style. For the
on the hillside overlooking Banderas Bay and wouldmoney, Vallarta is extremely hard to beat, but it's
cost two to four times as much. A 2,000 squarecertainly not cheap!
foot condo in St. Petersburg, Florida, similar to one