Jul 31, 2010, 5:29 PM
Post #21 of 54
With all due respect, Jim (Bentein), your recall of your astute projections for Lake Chapala is selective. In 2001, you predicted the crashing of the Chapala/Ajijic real estate market because you predicted doomsday for the lake which, according to your prediction, was to be close to a dismal, dry lakebed by about now with catastrophic consequences for the local real estate market, not because you predicted any serious financial distress in the homeland of so many of Lakeside´s expat retirees. Today the lake has recovered to the point that it is closer to capacity than it has been in 32 years according to the Guadalajara Reporter. Also according to The Reporter, the lake has regained 77 centimeters in level so far this rainy season which compares with 39 cm. in all of last year´s rainy season ending in October. The beaches are alive and thriving and the municipality has constructed new malecons that make the once moribund, dry and pathetic waterfront an exciting place to visit for countless local families and tourists. Construction, both commercial and residential, from Chapala to Jocotepec, is occurring at a frenetic pace. Unlike when you were here, we have new Soriana and Walmart superstores and the restaurant scene is far healthier than the hick town you left for Mazatlan.
We moved to Lakeside at about the same time you did, I believe, in early 2001. We bought a house immediately upon arrival and, even with the problems you cite in your posting, we could, today, sell, that house for anywhere from 75% to 100% more than we paid for it and that was no cheap house when we bought it. Sure, we have invested in some home improvements over the years but we have more than recovered every dime of that investment several times over. By buying instead of renting we have had nine years plus here free of capricious landlords and rental payments over the past nine years that would, in total, have cumulatively exceeded 70% of our original purchase price without building a cent in equity for us. Meanwhile, during those nine plus years we have had no significant fixed expenses and have been able, consequently, to buy a second home in San Cristóbal de Las Casas, Chiapas in 2006 which has also increased significantly in resale value should we decide to sell today which is something we would not even contemplate unless we decided to sell either Ajijic or San Cristóbal or both of those houses to buy another house which, had we rented over the past better part of a decade, we would not be able to afford.
I tell you and the reader all this not to brag about our good fortune, which is modest at best, but to relate our experience in building home equity and assuring we have a place that belongs solely to us and is inviolate barring a descent into social chaos. This experience mirrors the experiences of countless other homebuyers at Lakeside and I am pointing out that there is an opportunity cost downside to renting which could be substantial - especially beyond a brief interim period while getting to know the lay of the land.
Anyone who tells you, dear reader, that the only solution for you is to buy or to rent and that his/her solution to that quandary is the only solution for all - is blowing major smoke at you. We have friends who decided to rent when they moved here at the same time we did and, today, that rental expense has provided them a roof over their heads subject to the whims of a landlord and nothing more.
Just remember a couple of things. Never invest more in real estate whether at Lakeside, or in Phoenix or Las Vegas for that matter, than you can afford to lose and that´s especially true at Lakeside where you cannot leverage the deal with a mortgage but must come up with cash out-of-pocket. Also remember that, since the real estate market at Lakeside, and even more so in Chiapas, is a cash only market without the speculative incentive of excessive mortgage leverage, the real estate market values here more accurately reflect the supply and demand forces of knowledgable buyers and sellers without the "bubble" affect of cheap and easy mortgage access. Therefore, when a house sells here, it´s because the buyer has the cash to afford the damn thing and thinks it´s worth the agreed price. Now, the buyer may overpay based on the buyer´s financial capacity but here at Lakeside, unlike Mazatlan, one can live without air conditioning or burdensome property taxes and assessments so, folks, if you have to, you can dine on sardines, Spam and crackers for a while until things get better without being evicted by a bank or landlord for non-performance. That´s important, yáll.
Now that I have sung the praises of Lakeside real estate investment, I think I´ll head down to the lake water´s edge which is now only one house and a lawn from mine whereas, when Jim was here was about a half kilometer to the south, and make sure that sucker has slowed its aggressive seasonal surge. If it gets much closer, I may put this place on the market and get the hell out of here.
(This post was edited by Hound Dog on Jul 31, 2010, 6:04 PM)