By Jamie RosenOriginal Print Publication: May, 2008
Ever consider having a cave in your house for your wine collection? How about a fire pole to go from your bedroom to your dining room?, Perhaps an office in a treehouse? If you have eccentric tastes--or if you just want something different for your house, like an extra large chef's kitchen or an isolated bedroom for your mother-in-law--you may want to design and build one yourself. Although you might entertain building a house from scratch back home, tackling a project like this in Mexico may seem daunting.
For me, the build versus buy decision was settled the day I married a Mexican architect. But you don't need an architect in the family. If you have a clear idea of what you want and are willing to roll up your sleeves and find yourself a good architect and builder, you can turn your dream into your dream home. We did--and it ended up being a lot of fun.
Here are some tips from the two years my wife and I spent building our home in Mexico.
I. Finding the land
Where should you buy? Mexico has 5800 miles of coastline and lots of charming towns. If you're not already sure where you want to build, consider convenience. You may find a beautiful spot on a remote beach, but if getting there involves changing planes and a long drive, you may find yourself using your new house less than you think, especially if it's a vacation home.
Major airlines have been adding new routes and flights to Mexico, so if you're looking for a good deal, explore areas that are receiving more international flights. Not only will more flights make getting there easier and cheaper over time, it's also a good sign for rising property values and your ability to rent your house when you're not using it.
Once you find a piece of land that you like, check out the area at different times of day and on different days of the week (in Valle de Bravo, where we built our house, it's usually deserted during the week and packed on weekends). Inquire about the weather: is there a rainy season? Does it ever get hot and humid? Will you need to put in heat or air-conditioning? Valle de Bravo's mild climate is economical, and most people get by with neither--in our house, we have just fans and fireplaces.
Get a feel for the vibe, both for locals and expats. How are the schools, parks, restaurants, and supermarkets? Don't forget the hospital--where would you go if you had a medical emergency? We didn't find this out until later but Valle de Bravo doesn't even have a modern ambulance (a group of residents are pooling money to buy one now).
Consider environmental hazards. Is the land in a seismic zone? Is it vulnerable to storms? What will happen if sea levels rise? Unfortunately, Mexico has its share of earthquakes, hurricanes, and flooding. Don't be put off by problems. Problems are good--at least fixable ones. They scare off other buyers and bring down the price. And in solving problems you create value. In our case, the land had been used for years as an unofficial garbage dump and had mountains of trash. The land was also 15 feet below the level of the road on a steep hillside, making it a challenge to build on. But raw land almost always needs work. This is where you get to squint and imagine the possibilities that other people can't see. Remember that the view from your second-story deck will usually be better than what you can see on foot, so ask your broker to pack a ladder.
Do your due diligence on the local real estate market. Pick up old classifieds and see if the same properties have been listed continuously for months. If things are slow, you'll have more bargaining power. On the flip side, if the market is hot, consider subsidizing your project (if you can afford to) by buying a double-size lot and building two homes, one for you and one to sell. There are huge economies of scale in the building
process and you can engineer a great deal this way--you might even get your home for free!
process and you can engineer a great deal this way--you might even get your home for free!
Be sure to inquire what services come with the land, like water, sewage, power, and access roads. Raw land can be alluringly inexpensive but beware of the time and money needed to improve the infrastructure. But as with other fixable problems, the absence of services can be an opportunity, too. Many people have been building in remote areas in Baja where beachfront land is still dirt cheap. The opportunity here is to build your home in an eco-friendly way--with solar power, desalinization facilities, and waste treatment systems. You will have a cool, self-sustaining home and save money on utilities to boot.
Before buying land, invest a few hundred dollars to test the soil and do a topographical survey. We were pleasantly surprised to find that our land was larger than the seller had advertised. Had we found that the lot was smaller, we might have been able to negotiate a lower price. We also did a soil test but unfortunately it did not alert us to some rock hard subsoil. Excavating that subsoil to lay the foundation required more time and money than we anticipated. Had we done a better test, we could have at least budgeted for it.
Once you've found your dream land, get yourself a good notario. Notaries in Mexico are not like the clerks in the US who stamp signatures; they are lawyers sanctioned by the government to process transactions. Among other responsibilities, they verify that there are no liens or title disputes with your land. They can also set up your fideicomiso, the trust instrument that foreigners need to buy land near Mexico's coasts and borders. Although notarios are licensed to act on behalf of the government, their fees can vary greatly. Solicit recommendations and interview at least three before choosing.
Consider getting title insurance, which costs about 0.7% of the total. I've heard horror stories about Americans who bought land in Mexico only to find that the seller did not have the right to sell them the land in the first place. This is particularly true of ejido land--communally owned land that is especially tricky to buy and sell. Two American title companies have recently become active in underwriting title insurance policies in Mexico. This has paved the way for US lenders to issue mortgages in dollars, collateralized by Mexican property. In the past, foreign buyers either had to pay in cash, borrow against their property back home, or get an expensive mortgage in pesos from a Mexican bank.
II. Finding a great architect and builder
A good architect can make or break your experience. If you can't marry one, take the time to find someone that's right for you. Drive around the neighborhood, pick out homes you like, and inquire about the architect. This lets you start with someone whose design style you like and who has experience in your area. Materials and building methods are very different in Mexico than in the US and Canada, so beware of using an architect that doesn't have local experience.
As important as a good architect is a rock-solid general contractor. Fortunately for us, Mariana has worked with the same builder for years, Ramon Calzada, who has a deserved reputation for always being on time and on budget. If you don't know a local builder, you will once again need to do some research. Ask everyone--your architect, your future neighbors, your realtor. Check references and visit other homes he's built to inspect the quality and to find out if the owners were happy working with him.
Some contractors will offer to "throw in" the architecture if you hire them to build your house. If you care for aesthetics, pass. Architects are not expensive in Mexico (generally 5% or less of construction costs) and contractors, if unchecked, will build your house in a way that's the fastest and most profitable for them. Indeed, a good architect can police your builder, which is especially important if you aren't around to
do this yourself. It will cost a bit extra to have your architect perform this supervisory role but it's worth it to ensure that everything is going according to plan.
do this yourself. It will cost a bit extra to have your architect perform this supervisory role but it's worth it to ensure that everything is going according to plan.
Make sure to implement a pricing structure with your contractor that suits your interests. When we hired Ramon, we gave him the architectural designs and specifications and had him tally up the quantity and cost of every element, down to the last nail--a full binder's worth of numbers. Mariana then reviewed this with him. We ended up with a detailed estimate of how much the house was going to cost. Based on that, we negotiated a fixed percentage as Ramon's fee. Once we were all happy with this, we stopped being on opposite sides of the negotiating table. Ramon was free to cut costs without the perverse incentives that exist when contractors earn more by spending more (i.e., the common "cost-plus" arrangement). This worked beautifully for us. Ramon built the house as if it were his own--saving money at every turn by being creative and by negotiating tooth-and-nail on our behalf with every vendor.
III. Building and finishing your dream home
Visit the job site frequently. It's a lot of fun to see your dream house come to life: I took lots of pictures and made a scrapbook documenting the effort. Midway through the process, I printed 40 copies of the book (using a digital book printing company called Blurb) and we gave them out as gifts to the construction workers, which they all appreciated.
The risk in being on site a lot is that you will be tempted to make changes on the fly. In the US, this is frowned upon. In Mexico, however, while changes can be expensive and demoralizing to the workers, they are tolerated. We ended up making lots of last-minute modifications-moving columns when we saw they were blocking a view, extending a roof when we saw that we needed more shade. No matter how thorough your architect is, some design decisions are hard to make in the abstract; your house will be better if you're around to make improvements as you watch it going up. Indeed, one of the perks of building your own house is getting it precisely the way you want it. My only advice is to be prudent about what you change and how late in the game it is. Budget accordingly.
To save money, consider buying certain finishings in the US. Jamie traveled back and forth to the US on business and brought back all kinds of hardware, lamps, ceiling fans, electronics, etc. Many home furnishings are cheaper and better in the US. For example, we found brass doorknobs on sale at Expo Design Center for a fraction of the cost of comparable ones in Mexico. If you happen to be going back and forth regularly, consider sourcing certain things back home. It's worth the puzzled looks you'll get going through customs with a garment bag full of doorknobs.
Monitor your progress. We have friends who were nearly bankrupted when the cost of their house veered out of control. Ask your contractor for a detailed master schedule up front, and get weekly reports to track your progress. You can minimize surprises by staying on top of everything. If you can't do this yourself, hire your architect to do it for you.
Finally, make sure your builder guarantees your house for a period of time after completion. He may not like this arrangement, but you should negotiate a small holdback for a few months. When you move in, keep a list of everything that needs fine tuning. The holdback will give you some leverage to do what might otherwise be impossible: get him to return within an agreed-upon warranty period and fix whatever is not working properly. It will also be an extra incentive for him to get everything right the first time.
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