investing in real estate is an excellent way to protect money. Especially, acquiring a second property allows people to have a second source of income or to reach economic independence. For this reason, buying a second home is an excellent option to increase profits through rents or its eventual sale.
In the case of Mexico, is common for people to decide to buy a second property to grow their capital. However, amid the COVID-19 pandemic, second homes have become more popular since people have started working remotely and can now escape from the big cities like Mexico City, deciding to move to smaller towns with big open spaces and some other amenities.
A second property has two different ways to develop. One way is through the housing scale, which means selling the first property on hand for a higher price, so the profit obtained will allow the acquisition of larger properties that will adapt to people’s needs.
The second way is through a mortgage loan. It is critical to do a previous evaluation with financial tools and have the advice of a real estate professional to have better results. Also, it´s important to corroborate incomes since the economic stability must be in place to verify the payments for the credit.
Among the financial credits offered by government institutions in Mexico for second credits, the highlights are:
- The National Workers’ Housing Fund Institute (called Infonavit by its Spanish acronym)
It is considered the main Mexican federal institute for worker’s housing. Among its services is an option to obtain a second credit, which is especially for beneficiaries who previously used a mortgage and liquidated it.
To be a candidate for this second credit, people must meet requirements like having been employed in the last two years and more than six months of payments made (without delay) on the first loan; a credit history review; and being under 65 years.
- The Housing Fund of the Institute of Social Security and Services for State Workers (called FOVISSSTE by its Spanish acronym)
This federal institution is only for State workers. It also allows second credits to its beneficiaries. The requirements include being finished with the payment of the first loan; being an active State worker for at least 18 months; not being on a temporary or permanent pension; and demonstrating that the previous credit was paid regularly; among others.
Also, it´s possible to acquire mortgage loans with the banking institutions that operate in the country. Among the most important are BBVA, Citibanamex, Banorte, Santander, HSBC, Scotiabank, and Inbursa.
In conclusion, whether choosing a bank or a government institution, or the housing scale scheme, people should remember the following:
- Consider the current market situation when deciding to buy a home as an investment.
- The property must have a good location since the profit is better in neighborhoods with high capital gains.
- The property must be in perfect condition and must be nearby services and amenities.
- Verify that the cost per square meter and the price are correct to obtain a good profit.
- Make a market study to ensure that the property can be rented or sold in the future.