Budgeting for Baja

A checklist for planning your escape to Baja: Part II

Here you’ll find more important things to consider when budgeting for your life in beautiful Baja.

Property Taxes. While lower than in the US, property taxes are on the rise here. When you purchase your property, it will be appraised by the government and your tax rate adjusted… up, of course. The rate and payment options will depend on the municipality your property is in. The division between the Los Cabos and La Paz municipalities is in the town of Buena Vista. Both municipalities offer great discounts if you pay your taxes before they are due each January.

Fideicomiso Fees. If your title is held in a Fideicomiso (a requirement for most expat purchases in Baja) you will owe the bank about $500 each year in service fees around the anniversary of your signing date. If you have a special type of fideicomiso or have multiple properties in one fideicomiso your rate can be higher. Mark your calendar; the fines for late payments can be steep!

Yard Maintenance. This expense can vary widely. When planning your landscaping, keep in mind the amount of upkeep that it will require and don’t overestimate your DIY contribution. Even an automated drip system will need regular attention as the drippers tend to clog and power outages may reset your timers. If you have a pool, include an allowance for maintenance and the cost of replacement filters and chemicals.

Property Management. If you intend to rent your home when you are away, a good property manager is a must. In addition to making your guests feel welcome and making sure the home is well maintained, they can help you navigate the tax implications of renting your property.

Housekeeping. I have found regular house cleaning to be an affordable luxury here. My housekeeper also helps me practice my Spanish and keeps me up to date on local happenings. The size of the house will impact the cost, as well as what you want done. Most housekeepers here have no trouble doing windows and even laundry. Don’t be afraid to ask for everything you want, but please pay fairly for the services.

Home Owner’s Association Fees (HOA Fees). Be sure to ask your Realtor® if your desired property is governed by a Home Owner’s Association. If so, you will want to see a history of those fees and recent assessments in order to estimate your potential costs.

Home Owner’s Insurance. While many of us “Self Insure” (i.e. set a little aside each month in case something bad happens) new types of policies are becoming available that make the cost of homeowner’s insurance pencil out. When shopping for insurance be sure to get a copy of the policy in English. If the agent cannot provide this, it is worth the cost to have the Spanish version translated before you sign up.

Maintenance. A well built home here will cause you little trouble. We have very little mold for example and the concrete block or foam construction methods produce sturdy homes when done right. You need to budget for things like annual maintenance of your air conditioning, re-sealing of flat roofs every 3-5 years, painting metal details, etc. Fortunately, labor is still a bargain here and the quality of materials available at your local construction supply store are better all the time.

Fumigation. There is not much for pests to eat in the desert, so make sure your home does not become their buffet. Have it treated regularly - at least twice a year.

Vehicle Registration/Insurance. If you are going to keep a car here, you should bite the bullet and get it imported. Alternatively, you can register it in South Dakota using an online process. If you register it in Baja, the annual fees for keeping it up-to-date are minimal and insurance is also quite reasonable.

Health Insurance. Many people have good coverage in their home country and simply need to be able to get there if they have a serious health issue. Air evacuation insurance is available from multiple vendors for just for this purpose. If you are not insured back home, international policies can be a good option and may allow you to seek care in countries that offer cutting edge treatments not yet approved in the US or Canada. You can also participate in Mexico’s socialized medical plan or just pay cash if you need care. While private hospitals have a bad reputation for gouging foreigners, many local clinics can provide good care at a reasonable price.

Travel. How often are you going to want to visit friends and family in your home country? Be sure to allocate funds for these trips. You can also get great deals on flights to the mainland from Cabo or La Paz. We’ve really enjoyed exploring the old cities on the mainland… of course, we are always happy to come home to our tranquil little village by the sea.

This list does not include one-time fees like closing costs, building, or adding a water purification system but those are often lower here than in the states, further making your Total Cost of Ownership a bargain in sunny Baja. Factor in the Happiness Quotient and you will surely find that that your Baja home is a great investment.

Read the full article on Pam’s blog at www.homesandlandofbaja.com. Pam has lived and worked in Los Barriles for 12 years. She holds the CIPS® and ABR® designations. Reach her at Pam@HomesAndLandOfBaja.com or visit the Homes and Land Tourist Information Center on your next trip to Los Barriles. ,