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Considering buying a nice property in San Miguel de Allende? You're not alone!
Many people are captivated by San Miguel de Allende's colonial charm and dream of owning a historic mansion or a modern apartment there.
Still, would it be a smart investment? Are property prices increasing in San Miguel de Allende? What is the current trend? Should you consider investing in the Centro or Atascadero? What are the property taxes? Can I get a very good rental yield? Where?
We know the answers.
At TheLatinvestor, we've done our homework and know this market well. Actually, we've organized all our findings in a pack. Get it now.
In this article, we're happy to share useful information with you.
How's the real estate market in San Miguel de Allende?
Is the property market doing well or poorly? Data will provide us with answers.
In San Miguel de Allende, you can find various types of properties for sale.
These include charming colonial-style houses with colorful facades, modern apartments with convenient amenities, cozy townhomes nestled within the historic streets, spacious villas with beautiful gardens and views, and even land or lots where you can build your dream home.
Whether you're looking for traditional charm, contemporary comfort, or a blank canvas for your vision, San Miguel de Allende offers a diverse range of properties to choose from.
What's better: buy or rent?
(If you're purchasing for personal use and not for renting)
If San Miguel de Allende has captured your heart as your city of choice, you might be considering whether it's better to buy a property or opt for renting in this charming Mexican town.
Usually, buying is better than renting in San Miguel de Allende due to its low cost of living and the potential for appreciation of the property.
Nonetheless, if you favor flexibility, renting is the ideal route.
Property pricing in San Miguel de Allende
On average, according to the updated data from National Institute of Statistics and Geography (INEGI), purchasing a property in San Miguel de Allende would cost you around $4,000 per square meter.
It's evident that there are significant disparities. An upscale property in San Miguel de Allende might have a higher price per square meter than a house in Centro. You'll get a more detailed in our pack for buying property in San Miguel de Allende and in Mexico.
To help you understand better, it means that, instead of buying an apartment in New York, you can get almost 3 properties in San Miguel de Allende.
Also it's good to know that housing prices in San Miguel de Allende are similar to the prices in Mexico City.
The most expensive neighbourhoods in San Miguel de Allende are probably Centro Historico and El Chorro, while the cheapest areas are likely San Antonio and El Charco.
First and foremost, we have to acknowledge that Mexico is, today, a relatively stable country. The last Fragile State Index that has been reported for this place is 70.3.
Don't overlook this while weighing the pros and cons of buying a property in San Miguel de Allende.
Also, according to the International Monetary Fund (IMF), Mexico's economy is expected to soar by 8.3% in the coming 5 years, resulting in an average GDP growth rate of 1.7%.
If you intend to invest in real estate in San Miguel de Allende it's a good thing because when the economy grows, people often experience an increase in wealth, it typically translates to a surge in housing costs.
Also, in Mexico, the average GDP per capita has changed by -3.6% over the last 5 years. It's not a good number.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Mexico right now.
Buying property in San Miguel de Allende
It can be difficult to buy property in San Miguel de Allende due to the lack of reliable and updated information available, making it difficult to make informed decisions. That's why we have created the pack to buy property in San Miguel de Allende and in Mexico.
Inside our pack, we've outlined the complete buying process, including a detailed breakdown of prices and yields per area, tips for negotiating the price, and information about mortgage options.
Here, we're presenting you with a more straightforward version.
This is the step-by-step process to purchase a property in San Miguel de Allende:
- Research the local real estate market and set a budget in Mexican pesos.
- Engage a certified Mexican real estate agent with knowledge of the San Miguel de Allende market.
- Visit properties and shortlist options, considering factors like proximity to amenities and colonial charm.
- Conduct thorough inspections, checking for structural integrity and verifying utilities like water and electricity.
- Request the "Avaluo" (property appraisal) and review the "Escritura" (property deed) to confirm ownership and encumbrances.
- Negotiate the purchase price and terms, including the "Arras" (earnest money) deposit, usually 5-10% of the property value.
- Hire a Mexican notary to draft the "Contrato de Promesa de Compraventa" (Promise of Sale Agreement), outlining conditions and timelines.
- Pay the "Enganche" (down payment), usually 10-30% of the property price, to the notary's escrow account.
- Secure financing if needed, obtaining a "Carta de Aprobación" (pre-approval letter) from a Mexican bank.
- Complete the "Due Diligence" process, including a title search and certificate from the Public Property Registry.
- Sign the final "Escritura" (property deed) at the notary's office, in the presence of both parties and the notary.
- Pay the remaining balance and closing costs, approximately 4-5% of the property price, and register the property with the Public Property Registry.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Mexico.
Make a profitable investment in San Miguel de Allende
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Where to find a property
Discover these websites to find properties in San Miguel de Allende:
- Mexico Real Estate Group - Specializing in luxury properties in Mexico, this multilingual brokerage serves international buyers and investors.
- Top Mexico Real Estate - A professional agency dedicated to helping American and Canadian buyers find their ideal homes in Mexico.
- Bay Realty Mexico - With over 15 years of experience, this local agency excels in the Puerto Vallarta and Riviera Nayarit real estate market.
- Cochran Real Estate - A boutique agency focused on aiding buyers and sellers in Jalisco and Nayarit, Mexico.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Mexico.
Which properties for which budget?
As mentioned before, the average price per sqm in San Miguel de Allende is $4,000. A one-bedroom property with an area of 60 square meters would cost approximately $240,000, and a two-bedroom property with an area of 85 square meters would be approximately $340,000.
However, property prices can vary because of their qualities and where they're located.
Property prices in the top areas of San Miguel de Allende are commonly at a premium. If you're considering Centro, a house could be around $760,000, but a house in Atascadero might be priced at $700,000.
On the other hand, some places are more affordable. You may find an apartment in San Rafael for $130,000, or an apartment in San Luis Rey priced only at $110,000.
Find a more detailed price list in our full pack for buying property in Mexico.
Here are the main pitfalls when buying property in San Miguel de Allende, Mexico:
- Ejido Land Issues: Buying from communal lands (ejidos) may pose ownership disputes and hinder property transactions.
- Fideicomiso: Foreigners must use a trust (fideicomiso) to buy property within the restricted zone, incurring additional costs and complexities.
- Historical Heritage Restrictions: Some properties are subject to strict preservation regulations, limiting renovation and development options.
- Water Supply: Ensuring a reliable water supply can be challenging due to seasonal shortages and infrastructure limitations.
- Cultural Differences: Navigating the local real estate market and transactions may be complex without understanding Mexican customs and language.
- Hidden Costs: Additional fees, such as capital gains tax for sellers, might catch buyers unaware.
- Unpermitted Construction: Verify that all structures have proper permits to avoid potential legal issues and demolition orders.
- Closeness to Volcanoes: Although San Miguel de Allende is not in an active volcanic area, consider proximity to volcanoes for safety and insurance purposes.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Mexico Property Pack
Living in San Miguel de Allende
San Miguel de Allende is a vibrant and culturally rich city offering a unique lifestyle with stunning scenery, great food, and a friendly atmosphere, making it an ideal location for those looking to buy property.
Cost of living
The cost of living in San Miguel de Allende is generally lower than in other parts of Mexico, making it an attractive destination for expats and retirees. Groceries, rent, and utilities are all relatively affordable, although prices can vary depending on the area of the city.
Here are some examples to better understand the cost of living in San Miguel de Allende, Mexico:
- Margarita cocktail at a rooftop bar in Centro: $6.
- Rent for a one-bedroom apartment in Colonia Guadalupe: $900/month.
- Tacos al pastor for two at a local taqueria: $12.
- 1.5-liter bottle of Jarritos (Mexican soda): $1 at a supermarket.
- Electricity bill for an 85m² apartment using CFE (Federal Electricity Commission): $70/month.
- Monthly membership at LifePath Center gym and wellness center: $50.
- Ticket to a Mexican film at Teatro Ángela Peralta: $8.
- Cup of artisanal mezcal at a mezcalería in Centro: $5.
Centro Histórico is the heart of San Miguel de Allende, featuring cobbled streets, colonial architecture, historic landmarks, and a vibrant arts scene.
Rich cultural heritage, picturesque streets, arts and crafts markets, central location.
Traffic congestion, limited parking, higher property prices.
Colonia Guadalupe is an up-and-coming neighborhood known for its artistic and hipster vibe, offering art galleries, street murals, and trendy cafes.
Artistic community, hip and modern atmosphere, affordable housing options.
Less developed infrastructure, noise from nightlife activities.
Atascadero is a residential area situated on a hill, providing stunning views of the city and the surrounding countryside.
Scenic views, quiet ambiance, cooler temperatures.
Further from the city center, hilly terrain may be challenging for some.
La Aurora is a neighborhood with a mix of local residences and art studios, hosting the famous Fabrica La Aurora art and design center.
Artistic community, design center, local atmosphere.
Some areas may lack modern amenities, fewer dining options.
El Malanquín is a tranquil residential area with a suburban feel, offering a more peaceful living environment away from the tourist crowds.
Peaceful atmosphere, local community, green spaces.
Farther from the city center, limited commercial activity.
Los Frailes is a traditional neighborhood with a mix of local homes and expat residences, offering a sense of community and Mexican culture.
Local ambiance, affordable housing options, community spirit.
Less touristy, fewer amenities compared to tourist zones.
San Antonio is a residential area known for its local market, diverse dining options, and a laid-back atmosphere.
Local market, affordable dining, relaxed living environment.
Further from the city center, limited tourist-oriented services.
El Charco del Ingenio
El Charco del Ingenio is an ecological reserve with botanical gardens and hiking trails, offering a serene natural environment for nature enthusiasts.
Nature reserve, botanical gardens, hiking opportunities.
Farther from the city center, limited residential development.
La Lejona is a residential area with a mix of local and expat residents, providing a quieter living environment.
Quiet atmosphere, local community, affordable housing options.
Farther from the city center, limited amenities.
Ojo de Agua
Ojo de Agua is a charming neighborhood with narrow streets and traditional houses, offering a sense of authentic Mexican life.
Local ambiance, traditional architecture, community spirit.
Limited commercial activity, less developed infrastructure.
Life in San Miguel de Allende
San Miguel de Allende is a popular tourist destination, and its economy is largely based on tourism, hospitality, and real estate. The city also has a growing manufacturing sector and is home to a number of small businesses.
What expats usually like the most in San Miguel de Allende are its vibrant cultural attractions, such as the Parroquia de San Miguel Arcángel church, and its colorful colonial architecture.
Unfortunately, there is a bit of crime in San Miguel de Allende (the crime rate index is around 52, which is not so low. Examples of crimes in San Miguel de Allende include petty theft, pickpocketing, and home burglaries, which are primarily targeted at the local population and rarely affect expats.
San Miguel de Allende has good access to healthcare, with several hospitals and clinics providing quality medical services.
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Renting out in San Miguel de Allende
If you're interested in buying property not to live in, but to rent out and generate income, this section is for you.
Tenant Profiles in San Miguel de Allende
According to the data reported by Wikipedia, the home ownership rate in Mexico is 80%, which is rather high.
It is probably a bit less in San Miguel de Allende though.
If you decide to buy and rent out to long-term tenants, you should target digital nomads, retirees, and foreign students looking for a place to stay in San Miguel de Allende. Short-term rental tenants may include tourists, business travelers, and event attendees.
Here is a little summary table we've made for you.
|Property type and area
|Profiles of potential tenants
|What they are looking for
|Expected monthly rent in $
Colonial House in Centro
Historic charm, cultural events
$1000 - $3000
Apartment in Colonia Guadalupe
Artists, digital nomads
Artistic community, local markets
$600 - $1500
Villa in Atascadero
Tranquil setting, hillside views
$1200 - $3000
Condo in La Aldea
Young professionals, couples
Modern amenities, close to town
$800 - $2000
Casa in Colonia San Antonio
Local community, convenience
$900 - $2500
Studio in Balcones
Scenic views, peaceful atmosphere
$500 - $1200
Hacienda in Los Frailes
Luxury seekers, vacationers
Private estate, high-end features
$2000 - $5000
Nowadays, the rental yields you get in San Miguel de Allende are between 5% and 7%. There are some opportunities. So you know, a "good" rental yield is above 7%.
In San Miguel de Allende, rental yields tend to be higher for properties located in the city center, as these are in high demand due to their proximity to popular attractions and amenities. Additionally, properties with extra features, such as terraces, balconies, and pools, tend to be more attractive to tourists and can also command higher rental yields.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Finally, be aware that rental incomes in San Miguel de Allende are taxed at 25%, which is average.
You could also decide to rent short-term to vacationers, artists, and digital nomads looking to explore the vibrant culture and colonial architecture of San Miguel de Allende. Additionally, business travelers looking for a unique and memorable stay in the city could also be potential tenants.
If you decide to go with that option, look for properties in the Centro Historico district and in the San Antonio neighborhood. Both areas are popular with tourists and offer plenty of rental opportunities.
Currently, there are approximately 3,290 active Airbnb listings in San Miguel de Allende, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $131.
You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in San Miguel de Allende can make around $1100 per month. Also, the average occupancy rate is estimated at 38%.
Is it worth buying real estate in San Miguel de Allende then?
Buying property in San Miguel de Allende can be an excellent decision, but it's not for everyone. If you're planning to make this picturesque Mexican city your long-term home or a frequent vacation spot, buying makes a lot of sense. The low cost of living, potential for property appreciation, and the opportunity to generate rental income are compelling reasons.
Plus, the diverse property options cater to various preferences. However, if you're looking for short-term flexibility or concerned about economic uncertainties, renting might be a better choice. Additionally, the complexities of foreign ownership, hidden costs, and potential pitfalls should not be underestimated. Property taxes and rental income taxes are also factors to consider.
In short, buying in San Miguel de Allende can be a fantastic investment, but it's crucial to evaluate your unique circumstances and objectives carefully.
In essence, if you're drawn to San Miguel de Allende's charm, cultural richness, and long-term potential, buying a property here can be a smart move. On the other hand, if you seek short-term flexibility, are risk-averse in a changing economic climate, or prefer to avoid the complexities of foreign ownership, renting may be the more suitable option.
It all boils down to your personal goals, financial situation, and how much you're willing to invest, both financially and emotionally, in this captivating city.
So, take your time, do your homework, and make an informed choice that aligns with your aspirations.
Make sure you understand the real estate market in San Miguel de Allende
Don't rush into buying the wrong property in Mexico. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.