Puerto Vallarta Real Estate Articles

Building lots have been a smaller part of the real estate inventory in the Bay of Banderas until recently. Now there are more choices. There are existing lots offered by developers who have re-organized their marketing. New developments are going into the mountainsides of the ocean or around golf courses. Areas above the city of Vallarta and La Cruz have plans for more lot inventory. For those buyers who want to have their own custom home, there are more choices than previously.

Land is measured and priced in meters. One square meter is 10.76 square feet. A linear meter is 3.28 feet. There are 4,047 sq. meters in one acre. One hectare is 10,000 sq. meters or 2.47 acres. You will need to know these measurements to understand what you are purchasing.

There are no standardized contracts for buying land. The many questions that have to be answered before you spend your money, should be researched in advance, and put into a written offer in Spanish, with English being a courtesy translation.

It will surprise some buyers that an average size of lot is 10,000 meters or smaller. This is about l/4 of an acre. The amount of building coverage of the lot will be determined by the ordinances of the city jurisdiction. In the past few years, the municipalities have learned to require areas for garages and green space. They have changed the building codes to reflect these improvements.

The allowable height of the home, including the roofline, is commonly measured from the street elevation. Several areas allow a maximum of 8 meters in height. To obtain a waiver of any of the building requirements and/or to get approval of the planned building; the owner/builder must take the required documents to the city-planning department to be officially stamped and approved. A copy of the most recent paid tax bill will be necessary.

In older more developed areas, the most common shape of a lot is a rectangle, with the depth of the lot the longest dimension. The narrow width or street frontage of the lot influences the design of the home. This limitation of width gives the home the appearance of being a town home. The perimeter walls of the house are built to the lot line, in the effort to achieve as a much width inside the home as possible. Interior courtyards or back yards become important to admit light and air into the floor plan. Windows on the side of the home have not been allowed when the home is built to its side lot line and is adjacent to another home. This restriction is to protect privacy. At times, an opening of glass blocks or opaque glass has been allowed to admit light. Building the perimeter wall of the home away from the lot line can create conditions where approval is given for windows on the side. In many cases, the best thing for the owner to do is plan his home to have perimeter walls for privacy if he is going to have neighbors.

The protected view out of the home is normally the width of the lot. There is no assurance that you will have a 180 or 360-degree view, unless you build in a location where you will have no neighbors or you are "king of the mountain" above any neighboring lots.

New developments sometimes offer more atypical shapes for building lots, giving you the opportunity to have a wider choice of design for the floor plan. Some astute developers create view corridors and pre-determine building pads.

Utilities to the site: Don't assume. Obtain accurate information about the availability of water: whether it is city water, provided by a third party or comes from a river upstream. Sewer should be available within developed areas. Septic tanks, properly done, should not be a deterrent to purchasing a lot. If you getting a great view and location, the sewer may not be available until there is more development and infrastructure.

Availability of electric is important. The transformer you are connected to should be close by and have the capacity to provide adequate electric. If your new home is totally air-conditioned and has a microwave, a frost- free refrigerator, stereos, televisions, lots of lighting, etc. you will need to have an electric contract that provides you more kilowatt capacity. If you request more than the typical kilowatts in your electric contract, you can be required to pay for the right to this extra allotment. Gas is not natural pipelined gas, but propane that is paid for by the tankful.

You have a choice of companies to use for water if you are not on the city water, and a choice of companies from which to buy propane. The other utilities are government owned and your only choice.

Telephone service is important to most of us. Historically, future installations for needed phone lines have not been part of the business plan of the telephone company. Find out what the availability is for a phone line to your lot. It is not an accident that there are more cellular phones in Mexico than many other places in the world. You may need to be a cellular customer until you can obtain your own private line. In the interim, your access to the internet may be through one of the many "net houses."

If you purchase a lot and don't build on it right away, you will want to fence it or put up a basic structure if you are further delayed. It is a good idea to have someone check your lot periodically, if you are not in town, to make sure that squatters have not occupied it.

Every January you should pay the property tax, and pay your trust yearly administration fee on the date it becomes due. Until there is a home built and occupied, you cannot use the lot as your residence. If you sell a lot, you will need to anticipate a tax on your profit, which will be paid to the Mexican government.

Cost of building: Lots on steep slopes, such as Amapas and Conchas Chinas, require more foundation expense. Foundations are required to be designed and engineered to withstand a specific level of earthquake tremor. The cost of piers and beams on a slope can cost as much as the rest of the shell of the home. Obra negra is the common term for the foundation and cement shell.

Builders in the Bay say that their building costs, including cement, brick and other building materials, have increased every year for the past 3 years. Hardwoods for doors, windows, and cabinets are in demand and the supply is limited. There are no kilns close by to dry the wood after it is cut and before it is formed into doors and windows. Many times a major delay in construction is because of the time it takes to receive the wood and dry it properly before the carpenter can begin his work. The cost for delay in construction and maintenance has helped create a market for window frames and doors of alternative materials. The better products of these other materials are not necessarily less expensive.

Payment to the builder for the construction is normally done out of the owner's cash. It is rare to have a construction loan. If there are draws for certain time frames, there are several choices of how to arrange the payments. Some American Title companies will handle the draws, hiring an architect or engineer to approve the payment schedule to coincide with the degree of completion of work. In return for this service, the title company will provide, at your cost, title insurance. Some local banks may provide a similar service. Or the owner may be on site and determine the draw request himself.

What can be misunderstood is that draws can include the ordering of supplies, not the installation of them. Much of the work is truly custom and pre-made products are rare. Doors and windows are not standard sizes. Even window screens must be measured and custom built. Materials must be ordered and paid for before the labor can make the product. A favorite quote from a client is that his home is "handmade", just like his expensive car. Even a home under 200,000US can be custom. Without assembly line building products, it takes longer for completion of construction. Money is tied up longer. The end product can be more unique and truly customized.

Building trades are affected by supply and demand. Skill levels vary, so you will want to take your time or have your builder seek out the best people for the job. Be careful to not assume that you are only shopping for the lowest price or wage to pay. You want to balance getting the best price with the best value. Certain building products or services can cost as much or more here than they do in the United States and Canada.

The cost of land: Ocean front property demands a higher price per meter. Until you learn the range of sales prices in the area where you want to be, you can be making wrong comparisons. The cost of the land is one factor, but also important is the availability of utilities, road access, and title to the land, building, and environmental restrictions. Actual sales prices are not commonly reported, making "sold" comparables harder to know.

If the lot you decide on is adjacent to a body of water: a stream, river or ocean, you need to be aware that there will be a federal easement next to the water. Water belongs to the government and federal zones should not be built into without written permission first. Fines and legal problems can come up now or later to spoil your enjoyment and monetary investment.

If you are fortunate enough to find a lot adjacent to the ocean, your will want to check into the maritime zone and obtain a concession for the use of the beachfront adjacent to your lot. Someone else could obtain the concession in front of your home and build a temporary structure and start a business. If you don't want this to be the case, you must obtain the concession, which is for a specific number of years, in addition to paying the yearly concession fee/tax.

A federal zone also exists adjacent to highways. Many buildings use the federal zone for their parking spaces. You will want to know where the zone is in regard to your lot, even though you may be able to use some of the federal zone for parking. You will have to check out the individual situation to determine the correct answer.

Variety of choices: There are some wonderful choices of where to look for a building lot. On the south side you have verdant jungle, mountains and ocean view. In town you have great views of the city and the entire bay. If you go north of Vallarta, you can find flatter lots with long walking, surfing beaches and a large variety of native trees. You can build your home on a golf course, the edge of a river, inside a secluded cove, or on a mountain.

Regularized land has been through a lengthy process before it can be sold to an individual, including a foreigner within a bank trust. Ejido land must move from communal land in the proper way before it can be sold to an individual. If you determine that the price for buying land in the process of being regularized is worth the risk and the wait, you need to learn a lot about the process and a obtain competent help on how to proceed.

The Bay of Banderas is one of the most beautiful in the world, and you will be fortunate to lay claim to a small part of it. Good hunting!

This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas area. I recommend that each potential buyer or seller conduct his own due diligence and review.