After two years of dipping our toes into Mexico, we decided it was time to brave the rough roads and head further down into Baja. On our last trip to San Felipe, we had scouted part of the route in our Jeep and thought the Bago would be up to the challenge if we took it slow – very slow. This meant dodging as many potholes as possible and not trying to drive too many kilometers in a single day.
After four days of quick overnight stops bouncing down the Baja, our plan was to rest for two nights in Mulegé (pronounced MooLaHey) and then head for the beautiful beaches of Bahia Concepcion. Those stressful days of driving the narrow roads of Baja Highway 1 had worn us out more than we realized, and we opted to stay in a full-hookup RV park outside of town recommended by friends. Hacienda de la Habana turned out to be a little oasis in the desert with grassy spots and orange groves.
Two nights turned into a week. A week turned into two weeks and soon the monthly rate kicked in. We did make it to those beautiful white sand beaches but appreciated coming back to long hot showers and a sand-free RV. We explored Spanish missions, saw 7,500-year-old cave paintings, and drove the Jeep deep into the mountains on day trips. We ate all the tacos, drank the margaritas, made friends, and fell in love with the town and area.
Adjacent to the RV park are individual, privately owned lots. One was especially interesting as it was beautifully landscaped, but seemed to be vacant. When we peered over the bougainvillea-covered arched gate, we could see an RV pad and a quaint little casita with outdoor kitchen and palapa (thatch-palm umbrella).
In the afternoons, after the Hacienda groundkeepers had gone home, we snuck our dog Crosby in for zoomies behind the safety of the casita property walls. There wasn’t a for sale sign on the lot, but the RV park owner informed us it was indeed for sale and gave us a tour. It was interesting and seemed pretty perfect for our current lifestyle. But it would be crazy to buy after only our first trip. Who does that? To further tempt us, after our month in the RV park, the owner invited us to move into the lot for the same monthly rate we were paying at the RV park. Done. We moved onto the lot and loved having the private outdoor space, the security to let Crosby run around off-leash, and the larger kitchen while still having the comforts of our Bago.
Overview of Buying Process
After spending a month at the casita, we took a break from ranch life and made a short drive to camp at the beach a half-hour away where we had no cell service. We talked a lot about buying the casita and making Mulegé our winter home. And then talked ourselves out of it. It was too soon. There was still so much to see. Maybe next year. A day later, the Hacienda owner showed up with news that her real estate agent had found a potential buyer who wanted to rent the casita. She knew we loved the place and drove out to give us first right of refusal. The thought of losing the casita was too much to bear and just the motivation we needed.
We made an offer that day and were able to strike a deal to buy it a few days later. The price was a fraction of what we would have paid in the U.S. Because it was nearing the end of the season, we secured the casita with a down payment and agreed that we would make it official the following winter.
We could have simply bought the casita and land improvements with a bill of sale and then leased the land from the Hacienda, but decided that if we were going to own property, we didn’t want to be bound to an increasing annual rent. Currently, the Mexican constitution prohibits foreigners from acquiring direct title of any land located in the “restricted zone” or within 50 kilometers of the coastline. Mexico’s Foreign Investment Law, however, does allow foreigners to acquire indirect title to land in the restricted zone by either forming a Mexican corporation or establishing a bank trust called a Fidecomiso.
We consulted with a highly recommended attorney in La Paz who explained that a corporation made sense if we planned to purchase multiple properties or rental income properties, that it would require a Mexican partner and that corporations are responsible for significantly higher property and income taxes. Since that wasn’t our situation, we opted to establish a Fidecomiso where a bank would hold the title of the property and we would be the beneficiaries of the trust. Over the summer, the attorney guided us through the slightly complicated process to establish the Fideocomiso, get the necessary approvals from the Mexican Government and translate the final contract from Spanish to English at the closing this winter in La Paz.
Driving back down to Mulegé this past November, we were pleasantly surprised by how much Highway 1 had improved. It’s still narrow in spots, but the road crews had fixed most of the potholes and almost finished fully paving a long-delayed connection to Highway 5. We spent two weeks exploring more of Baja, camping along the coast, and generally enjoying the slow journey down.
Once we got back to Mulege and the casita, it didn’t take us long to unpack all the supplies we hauled down in the Bago and settle back into sleepy country life in Mexico, catching up with our Mulege friends, trying out the new brewery, taking trips to the beach, and visiting the neighboring farm for fresh produce. In December, we welcomed our first visitors and loved entertaining with the large outdoor kitchen and patio area. The slightly cool evenings were perfect for a festive fire and grilling over open flames. We still mostly live out of the Bago and she, of course, allows us to continue to explore Baja in style and comfort.
In fact, we’re writing this article while parking lot camping, so that we can basically roll out of bed to get a bright and early start to see gray whales on the Pacific side of Baja! For us, it’s the perfect blend of full-time summer RVing while having a winter home base in a place we love to explore!
If you are thinking about a similar purchase in Mexico, our best advice is to go see it for yourself. Internet research and photos only go so far to giving you an idea of what it’s like to experience a place. Talking to the locals can give you a wealth of information and insights into the sometimes-hidden real estate market.
This post is originally appeared in WinnebagoLife.