Can't Afford to Live in Malibu?
Perhaps you can’t afford to live in Malibu, but if you can afford
to drive a Malibu, read on-you are about to be introduced to a lifestyle
in Paradise equal to or better than Malibu at a fraction of the cost!
In 1997 we purchased a beautiful, newly constructed villa located in the
Sierra Madres overlooking Banderas Bay and El Centro, the downtown area
of Puerto Vallarta, Mexico. During the first four years of living in PV,
we doubled the size of the villa bringing it to nearly 20,000 square feet
of construction. It has been featured in a number of architectural books
and real estate magazines and was shown many times on the nationally syndicated
TV program, “Famous Homes and Hideaways”. That being said,
a very unusual incident recently occurred when we received a phone call
from a film studio in Mexico City requesting an opportunity to preview
our villa with a group of executives from the Disney Company in Los Angeles.
They were searching for the ideal set for filming a new project titled
“South of the Border” which is to be released in 2008. It
is cute story about a Beverly Hills socialite that lost her chihuahua
while visiting a spa in Mexico. The story was actually taken from the
true story about Paris Hilton and the pup that she thought was stolen
but was left with her grandmother. The folks from Disney toured the villa,
loved what they saw, but rejected it as a possible movie set. The story
is to take place in Beverly Hills and they said that although the villa
is furnished like the finest mansions in Beverly Hills, the location was
too much like Malibu. Since our villa is not going to be the movie set
for “South of the Border”, as a consolation, we’ll just
have to continue living in an area just like Malibu!
Recently, we had a realtor friend from Santa Cruz, California visit us.
After touring our villa, she informed us what she estimated the selling
price would be if we were in Malibu. We are absolutely flabbergasted every
time that we’re told that our villa would sell for three or four
times as much if it were in California. In all probability, we couldn’t
afford to live there! Located on the Mexican Riviera, our view in Vallarta
is equal to or better than Malibu and the weather is substantially better
during the seven month “high season” of November through May.
In Vallarta there are thousands of new houses and tens of thousands of
new condos, all having sweeping views of 
Banderas Bay, El Centro or downtown,
and the Sierra Madres. Palm trees, flowering amapa trees, orchids, bougainvilleas,
and other tropical vegetation abound. Multi-colored parrots and tropical
birds are routinely seen as they live in the neighborhoods of Vallarta.
The climate has to be one of the finest on the planet with an average
daily temperature of 73°F, highs of 83°F and lows of 64°F,
during the “high season”. There is normally one wet day per
month during that period with an average of .6 inch of rain, which if
it occurs, will do so in the evening.
The houses and
condos in PV include all the amenities found in any houses or condos in
the States, however, their costs are approximately half of what they are
in Florida and a third of what they are in California. Malibu, forget
it! Property taxes are .1% of the selling price. During the ten years
that we’ve lived here, there have been no property tax hikes and
no property revaluations, even though values have tripled. It’s
difficult to imagine what the property taxes on our villa would be if
it were located in Malibu. As another note of interest, you pay no capital
gains tax on the sale of property in PV if you can show that it was your
primary residence for more than five years. On the downside, mortgages
are somewhat difficult to obtain and therefore, most properties are paid
for in full upon purchase. Also, when living on the Mexican Riviera, foreigners
do not receive title and deed to their property. Instead, the property
is held in a 50 year trust where we have the exclusive right to usage.
Unfortunately, we’ll probably not survive the 50 year period, however
if we do, it will be automatically renewed for another 50 year period.
Upon death, our heirs receive the trust and can renew it for another 50
years. Upon sale, the buyer sets up a new 50 year trust. The trust is
as safe as holding title and deed and is virtually untouchable by any
entity.
Perhaps we can’t afford to live in Malibu but maybe, just maybe,
we have something here in the Paradise known as Vallarta that is a little
nicer than anything in Malibu!
Author: The founder of Puerto Vallarta Real Estate Buyers' Agents (PVREBA), Jim Scherrer is a retired entrepreneur who has owned property in Puerto Vallarta for 24 years. Utilizing his experience and extensive knowledge of the area, Jim has written a series of informative articles about travel to and retirement in Puerto Vallarta, which you can read on his website at PVREBA.com.