Palacio del Mar: Luxury Oceanfront Living with Investment Potential – Costs, Documentation, and Ownership - Palacio del Mar

Palacio del Mar: Luxury Oceanfront Living with Investment Potential – Costs, Documentation, and Ownership

Whether you’re considering a weekend getaway or a permanent residence, luxury living at Palacio del Mar is a sound investment.

Excellent location

Palacio del Mar is in a prime oceanfront location near El Descanso, away from the more densely populated areas that can get crowded in the summer, but still conveniently close to stores and restaurants.

There is a toll road exit about a mile south that can take you to the San Diego border in around 45 minutes. Downtown Rosarito is just a 15-minute drive, and the richest wine region in the country is only 35 minutes away.

Family-friendly, peaceful environment year-round

Palacio del Mar is a distinguished oceanfront community that prides itself on maintaining a safe and peaceful environment for all its residents.

To achieve this, we have implemented a policy that limits the number of short-term rentals in the community. Our minimum rental period is one month, which helps to prevent weekend party rentals that can otherwise disrupt the tranquility of the community.

By ensuring that our renters stay for at least one month, we can promote a more stable and family-friendly atmosphere year-round. We believe that this approach is essential in creating a welcoming and harmonious community where everyone can enjoy a high quality of life.

However, as an owner of an oceanfront property in Palacio del Mar, you can rent your property for any period longer than the minimum required – You are free to rent month-to-month, 3 months, 6 months, or up to a year. Availability of rentals in Palacio del Mar is low, and because it is an exclusive community there is usually a demand for these.

Full ownership

Yes, non-Mexicans can own property in Mexico. There are a variety of simple, safe, and perfectly legal ways you can own beachfront real estate in Mexico without having Mexican citizenship.

The most practical way to own property in Mexico is through a trust, commonly known as a “Fidecomiso” in Spanish. In this scenario a Mexican Bank acts as a depository, holding the property in a trust while the beneficiary, the buyer, enjoys all the same rights under the trust (to buy, sell, lease, use, bequeath, improve, transfer, and encumber) as they would under free simple ownership.

A Fidecomiso operates similarly to a family trust in the United States. It’s the safest, simplest way to possess real estate on Mexico’s coasts as a foreigner. In the Baja Peninsula alone, 2 million U.S. citizens and corporations have invested billions of dollars through Fideicomisos in the last decade.

With the complete legal framework in place, it’s now easy and affordable to purchase real estate in Mexico. Financing is also available. At Palacio del Mar we have teamed up with the top real-estate professionals who are qualified and knowledgeable in the field and can guide you throughout the purchase process, making it hassle-free.

Closing costs:

To record your purchase of a property, whether it is as a fee simple title for Mexican Nationals, or under a Bank Trust (Fideicomiso) for foreigners, the contract of purchase and sale has to be formalized and signed in the presence of a Public Registry.

The Notary, to sign off on the formalization of the contract, will request a series of documents to be sure that the transaction is legal, that the parties appearing to such signature have the legal capacities to do so, that the property is free and clear to be transferred, and that all permits have been obtained. Those documents are typically referred to as “documentos administrativos” and these include the following:

Certificates of no liens
Survey or certification of blueprints
Appraisal
Preventive recording (Aviso Preventivo)

Separately from the “documentos administrativos”, the parties will need to provide the following before the closing:

IDs: Typically 2 forms of identification are required, these have to be current and include pictures (such as a Driver’s license, Passport, INE card, Mexican resident’s card, etc).
POA: If anyone is signing on behalf of someone else with a power of attorney, the power of attorney has to be presented before the signature and it has to be either notarized by a Mexican Notary or if it is signed outside of Mexico, the POA has to be presented to the Mexican Notary already translated and apostilled.
Property deed: The seller will have to provide the original or a certified copy of the title of the property.
Promissory Contract: For the notary to prepare the deed, the parties have to provide a signed Promissory Contract. The Notary will reflect on the deed the terms of the contract, such as price, form and method of payment, inclusions, exclusions, conditions, contingencies, terms of delivery of possession, etc.
Proof of payment: To comply with the current anti-money laundry law, the notary will request from the parties proof of the payments made for the purchase.

Closing costs will depend on different factors, but generally speaking, they are about 5% of the value of the property.* (*As of the time of this writing, may change without notice.)

Around 2% is acquisition taxes, approximately 1% will be Notario fees, and then there are some fixed expenses, including the bank trust fees (if applicable) and the permit from the Secretary of Foreign Affairs.

If you hire the services of a Closing Coordinator, they will be able to provide you with a full breakdown of the closing costs for your condo, you can also coordinate your closing directly with the Notario’s offices.

Although hiring a closing company is not mandatory, it will speed up the closing process and make it much easier for you. The closing company is in charge of coordinating the delivery and obtention of all of the pertinent documents that have to be delivered to the Notario and the bank (if applicable) from the developer and from you, as the buyer.

The closing company will ultimately secure an appointment for the signature of the new deed, when all of the file is ready for the transfer of property. You can opt to work with any closing company of your choice.

Financing available

Here is more information about the several ways in which you can buy a condo in Palacio del Mar:

Developer’s Financing

Palacio del Mar offers direct short-term financing with very reasonable terms to ease the purchase of your brand-new oceanfront home – visit Palacio del Mar for a tour, pick your ideal condo, and discuss the direct financing options offered by the developer with our Real Estate experts.

Financing with a Mexican Bank

Many Mexican banks offer Mortgage Loans to buy property in Mexico. The terms, interest rate, and length of the mortgage will vary depending on the bank and the type of loan you apply for. The banks have their internal processes for approval and will request more documentation which will likely increase the time needed to be ready for the closing, and there might also be some additional expenses.

Antecedentes (Property Background): Once you have been pre-approved for a loan, the bank will require more information about the property you intend to purchase.

The property that you apply for must meet certain criteria established by the Bank, to protect your and their investment – they will be thorough in their review of the property background, the property type, and even the location before they approve of the loan.

Fortunately, Palacio del Mar has all the documentation required by the bank, and we have successfully closed with banks and lenders such as BBVA, Banamex, and MOXI; and we will happily provide all the information and documentation requested by the bank.

Avalúo (Bank appraisal): Additionally, they will send someone from the bank to conduct an appraisal of the property – this is also to see that the property you are buying meets certain criteria, but also to conduct an appraisal and confirm that the value of the property is more or less equivalent to the amount that the bank will be lending.

Before they schedule the appraisal they will request payment. The cost for this appraisal will vary depending on the bank.

Your personal Identifications and legal status in Mexico: Mexican banks will request, besides a copy of your identifications, for you to have a “Mexican Resident’s Card” which can be a temporary or a permanent one. You can read more about how to obtain your “Mexican Resident’s Card” here.

Insurances related to Financing: Another requirement to close a financing contract with a lender is for the buyer to purchase property insurance and life insurance. These insurances will be issued with the lender in the first place for the unpaid balance, and you or your heirs as beneficiaries for any excess amount.

Maintenance costs

Below is a list of other recurring expenses to maintain your condo at Palacio del Mar:

HOA Dues (Monthly):
The HOA at Palacio del Mar is currently (*2024) $450 USD per month. This amount can only change if voted by the owners in a general assembly after a budget for the year is presented.
The HOA is formally and properly registered in the city. The HOA monthly dues cover the cleaning and maintenance of all the common areas and amenities, the 24-hour security guards, and other staff at Palacio del Mar.
Once the possession of your condo is delivered, there will be a one-time contribution of $1,350 USD by all new homeowners that will go to the Tower 2 reserves. These reserves are to be used in the future, at the discretion of the Homeowners after a vote.
Some of the services available through the HOA administration that do not have additional costs are bill-pay services and assistance to pay bills, use of common areas such as jacuzzi, swimming pools, steam, sauna, clubhouse showers, lobby, cinema room, pool room, tennis courts, basketball court, etc.
Some of the services that have an additional cost, available through the HOA administration are the use of the shuttle bus, cleaning your condo or patio, use of maintenance staff for the interior of your condo or patio, and cleaning of a common area used for a private event.
Basic Utilities (Monthly): Water, gas, and electricity are all metered, you will only pay for the amount consumed per month, if you don’t use these services for an entire month, you may still have a fixed minimum fee to pay to the utility company for that month. Internet is a fixed amount per month, based on the speed and package of your choice.
Property Taxes (Yearly): A 3-bedroom condo in Palacio del Mar Tower II in 2024 paid $250 USD. The 2-bedroom condos paid $190 USD. This tax amount may change yearly and is set by the city in pesos.
Fideicomiso (Yearly): If you are a foreigner, you will need to hire a bank to hold your title, the contract between you and the bank is called “Fideicomiso” which will have a fee to be set up at closing. There will also be a yearly fee that will vary depending on the property and the bank holding the Fideicomiso, which typically ranges around $750 USD.
Property Insurance: The HOA fees include coverage for the building itself against accidents and natural disasters, you as the owner of an individual condo, will be required to purchase contents and third-party liability insurance. The cost of your contents and third-party liability insurance will be based on the amount that you set for your contents, but a standard common amount is somewhere between $300 to $550 USD a year.