23 July 2022

Renting a Home in Mexico Can Pose Challenges

Renting a Home in Mexico Can Pose Challenges

When moving to Mexico, chances are you’ll want to rent a house or apartment. Buying is risky and living in a hotel or Airbnb long term gets expensive. The problem is that renting in Mexico is a pretty bureaucratic and complex process.

Most landlords require a fiador (sometimes called an aval). This is a third party that will guarantee to pay your rent if you default. It’s basically a co-signer on your lease that acts as an insurance policy for the landlord.

Before renting, you may have to find a reliable fiador. These can be individuals or a company. They must own property in the state where you are trying to rent. This property is put up as collateral.

If you can’t find a fiador, you can buy an insurance policy that serves the same purpose. This is called a fianza. This policy usually costs around 10% of the annual rent. You will need to submit several financial documents and your work history in order to qualify.

One way to get around this requirement is to rent a room. In a roommate situation, you usually won’t need to sign a lease. The process is very informal. You just pay first month’s rent plus a month’s rent as a deposit and move in. All you need is cash. There no paperwork involved most of the time.

Mexico Has a Cash-Based Economy

You have to pay for pretty much everything in cash. Banking and payment processing aren’t quite as advanced in Mexico as they are in the US and Canada. Direct debit, credit cards, and bank transfers are rare. In Mexico, you’ll pay your rent and utilities as well as restaurants, bars, shops, etc all in cash. Many businesses just don’t accept credit cards.

This poses a safety risk. In order to pay your rent or a bill, you have to go to the bank or ATM and withdraw a stack of cash. Even day to day, you always have cash on you. If someone sees you withdraw thousands of pesos or just sees inside of your wallet, you become a target for theft.

Always having to carry cash and a pocketful of change is a minor annoyance as well. In the US, I can pretty much live my life without ever having to touch cash. This isn’t the case in Mexico.

Of course, some businesses do accept credit and debit cards. For example, I always pay for my groceries Match quizzes with my card. Many chain restaurants accept cards as well.

Banking and Bill Payments Have to Be Done in Person

In order to set up online banking or transfer money, you’ll have to go into the bank in person. This is the case with pretty much all Mexican banks as far as I’m aware. If you want to pay your electric bill, you have to go down to the nearest OXXO to pay it. When rent is due, you must go to the rental office and pay in person.

This is mostly just an inconvenience. It takes time out of your day to physically to these places. It’s also kind of irritating when the technology exists to complete all of these transactions online. In the US for example, I could pay all of my bills from the comfort of my bed.

People aren’t Punctual or Reliable

I’m the kind of person that always arrives early. I get anxious if I’m running late. It’s just the way I was raised. This doesn’t work too out too well in Mexico. People tend to show up whenever they want. Particularly for informal meetings like dates or hanging out with friends. It’s not uncommon to meet up an hour or more later than planned.