Puerto Vallarta ranks among the top tourist destinations around the World. Located on Mexico's Pacific Coast, situated near the Tropic of Cancer, Puerto Vallarta's temperate climatete makes for healthy living. Puerto Vallarta is located along the middle of the Bay of Banderas which is ringed by 100 miles of coastline and lush mountains. The Bay's beaches are considered some of the most beautiful in the World.

From a sleepy quaint Mexican village in the '50s Puerto Vallarta has "grown with the times" but has never lost its essence. Safe, clean and welcoming, Puerto Vallarta offers what permanent foreign residents seek yet it is close to major air gateways making it a perfect part-time home for many.

Activities

Puerto Vallarta's Foreign Community
A large community of foreign seasonal and full-time residents enjoy life in Puerto Va ll arta, including Americans, Canadians and Europeans. Puerto Vallarta is also home to the film industry and more and more international artists are finding inspiration from Puerto Vallarta's beauty. Why do people from all over the World choose to reside in Puerto Vallarta? The answers are as varied as the residents, but the following are generally underlying reasons for choosing to buy property and reside in Puerto Vallarta:

• The spectacular beauty of the Bay of Banderas, the climate, and the wide variety of leisure activities.
• The cost of living is far less than in the States or elsewhere and the cost of the same housing elsewhere is far greater.
• Safety, City facilities and services
• An active cohesive foreign resident community

Activities
In addition to the traditional Mexican Holidays and cultural activities, there are a large number of active civic and social groups for foreign residents. Outdoor activities abound. fine dining, Spanish classes, nightlife and the excellent medical community round out Puerto Vallarta's many amenities.

Some of the many organizations active in Puerto Vallarta are: The International Friendship Club, A.R.T.S. Anonymous. Ecology Group of Vallarta, the Hope Foundation, Writers' Group of Vallarta, the Jungle Quilters, a weekly Duplicate Bridge group, 'Amigos de Animales', the Cultural Center, The Women's Network, Rotary International, a chapter of the U.S. Navy League, and a very active ALANON Club.

Health Care
Several modern hospitals are located in Puerto Vallarta, with the two principal ones being CMQ and Medasist. Both have many bilingual doctors on staff, and accept U.S.-issued health insurance. In November 1996 Amerimed Trauma Center opened offering US trained paramedic personnel in their ambulances in addition to US medical staff on duty twenty-four hour notice. Medical air evacuation services are available to large medical centers in Guadalajara, Mexico City or the United States.

Churches
In addition to several Catholic churches, there are also weekly English-speaking services at the New Sunrise Christian Center, the Church of Jesus Christ of the Latter Day Saints, the First Baptist Church, the Jehovah's Witness church, Baha'i Faith among others.

Communications & Mail
Telephone lines are now easily obtained, Internet service, cellular telephones and fax services are readily available. Where the Mexican mail service is still somewhat slow, it has been supplemented by MexPost and the franchise Mailboxes Etc. Federal Express and DHL have local offices in Puerto Vallarta.

Bringing your car into Mexico
There are restrictions on bringing and keeping foreign cars in Mexico, but it is helpful to understand from the out-set that these are merely designed to protect the Mexican automobile industry against competition from illegally imported cars. Holders of the FMT and FM3 immigration status are allowed to drive foreign-plated vehicles in Mexico. Customs law basically state that foreigners may keep their cars in Mexico for the length of time of their visas. To be able to verify this, visas should be carried in the car at all times. Excellent US and Japanese cars are now available in Mexico.

Business Opportunities
There are restrictions on bringing and keeping foreign cars in Mexico, but it is helpful to understand from the out-set that these are merely designed to protect the Mexican automobile industry against competition from illegally imported cars. Holders of the FMT and FM3 immigration status are allowed to drive foreign-plated vehicles in Mexico. Customs law basically state that foreigners may keep their cars in Mexico for the length of time of their visas. To be able to verify this, visas should be carried in the car at all times. Excellent US and Japanese cars are now available in Mexico.

EXPLANATION OF CLOSING COSTS

(These amounts are in us dollars)
(Considered Exchange Rate: $11.00)

The closing procedure generally takes from 30 to 45 days and these costs are paid by the buyer.

When a property is acquired through a Purchase-Offer or when a Trust Transfer Domain is carried out before a Notary Public, in order for them to be legally constituted they must meet with a series of permits and expenses, which are described as follows:

1. - TRUSTEE FEES: These are charged on a yearly basis and are paid upfront. They may vary according to the transaction and considering the property and the trustee; nonetheless most of them charge $ 450.00 USD in properties priced under $700,000.00. For properties priced up to $ l,500,000.00 USD they charge  $ 600.00 USD and over $1,500,001.00 USD they charge $ 1,000.00 USD.
In Addition to this all the Trustees collect the same fee for the Trust Acceptance, which is charged only once.

2. - FOREIGN AFFAIRS PERMIT (SRE): This is a permit that the Notary Public or the Trustee process through their agents and they may cost $1,100.00 USD as a maximum fee; this may be  in proportion to the agents fees, since the permit fee from the Foreign Relations Office does not vary.

3. NATIONAL FOREIGN INVESTMENTS REGISTRATION (RNIE):  The Trustee has the obligation to process the registration of the Deed within a 30 day period after the granting and the cost per fees and rights may vary from $ 285.00 USD to $330.00 USD according to the Trustee.

4. - NOTARY PUBLIC FEES:  These are regulated by a fee list authorized by the Notary Law valid in every State. In the State of Jalisco the fee list is as follows:

5. - PROPERTY ACQUISITION TAX: This is a State Tax. The notary Public is responsible to charge and declare it without surcharges. In the case of the State of Nayarit this takes place within a 30 day period after the granting of the Deed. It is 2% based on the highest value of the previously authorized construction appraisal.
In the case of the State of Jalisco it takes 60 days. This tax is charged based on the construction appraisal value using different percentages and fixed amounts. It is important to mention that in order to calculate this tax you must apply a special procedure and the real closing costs cannot be determined on your own, a notary must determine these costs.

6. - APPRAISAL AND DIVISION:  Your cost is calculated as follows:

7. - PUBLIC REGISTRY RIGHTS:  This permit can be processed through the notary. Once the corresponding rights are paid, the notary will be able to process the registration in the Local Public Registration Office where the property is located. The costs vary as stated by the valid law in every State.

8. - NO LIENS CERTIFICATE (NO LIENS ON PROPERTY TAX, NO LIENS ON WATER OR MAINTENANCE FEES): The notary has the obligation to check that the subject property has no lien. The notary will gather the certificates from the corresponding Government offices and from the Condominium administration. This charge is normally not more than $60.00

9. - OTHER CHARGES:  This depends on the notary and these can be:  Travel expenses when there is need to sign documents; copies and other administrative costs. This is usually not more than $767

10. - TITLE INSURANCE: This varies according to the value of the transaction and the Insurance company but it should not exceed 0.5% - 0.7%

11. - ESCROW ACCOUNT: In order to manage the funds for the purchase of a property it is recommended to open an ESCROW account. The fees are $500.00 USD as opening costs. It is important to mention that all the aforementioned expenses are mandatory and they must be made. In the case of a Trust Transfer Domain for a Purchase-Offer you can omit steps 1, 2 and 3.
With this information our clients can determine the real closing costs. Nevertheless, it is very important to visit your notary for assistance or if this is not possible then you should go to a Real Estate Agency which has qualified personnel to supervise your closing.
All of this information about closing costs it is necessary to have an idea of what your closing costs may be and according to my expertise in this field, I prepared a chart which can help determine the approximate costs very fast.
(only when constituting a trust) 

IMMIGRATION - a Brief Overview

Mexico has designed three different immigration status's for visttors, depending upon your intentions for remaining in this country.

The most basic is the FMT, or tourist card, which allows visitors to remain in Mexico for up to six months, without working. The FMT may be easily and continually renewed by simply leaving Mexico within the allotted six month period, and then re-entering.

The FM3 is designed for someone who wants to live at least part time in Mexico, but does not intend to make this their permanent home. To be granted an FM3 status, you may prove ownership of property or that you have sufficient resources to be financially independent, or meet certain requirements to be able to work or own a business in Mexico. FM3 'Rentista' status is available to anyone with monthly income (from investments or social security) of at least US $500, plus US $500 for each dependent. An individual with FM3 status, because of the non-permanency of their residency, is allowed to own foreign¬plated vehicles, and operate them in Mexico (see below).

The FM2 status is designed for those who intend to permanently reside and work in Mexico, with qualifications only slightly more stringent than that of FM3 status. After five-years of successfully meeting the requirements of FM2 (including restricted time out of Mexico), one may apply for Inmigrado status, which allows you to enjoy most of the rights and privileges of Mexican citizens, the primary exception being the right to vote. Inmigrado status does not require you give up your native citizenship, but holders may freely work and remain in Mexico without annual renewals of immigration papers.

Which visa is the best? For most people the FM3 is the most practical. For one thing it is much easier to obtain and you can do most of the paperwork yourself. You also obtain it more quickly than a FM 2 because it is granted through the local Immigration office. FM2 applications go through Mexico city and can be detained there for months. Many FM2 applicants need professional help to fill out the required papers.

Privileges are the same whether you are a FM2 or a FM3. At the same time the FM 2 has disadvantages. For example, if you bring a foreign-plated automobile to Mexico you must sell it outside the country at the end of the five-year visa period. FM3s can keep their vehicles indefinitely so long as they renew their FM3 annually. Also, you may not leave Mexico during the five-year period of an FM2 visa for more than eighteen months total. There is no such requirement under the FM3 you are free to come and go as you please.

It is wise to visit your nearest Mexican consulate office in the U.S. or when you are in Puerto Vallarta to verify the current FM3/FM2 processes and requirements.

Owning Property in Mexico

Since 1973 foreigners (non-Mexican) have been able to purchase property with coastal and border properties owned through a trust deed established with a Mexican bank. Foreigners may directly own rural or urban land in the interior of Mexico with certain limitations on specific agricultural tracts.

Trust Deed Ownership
The Trust Deed is established through a Mexican bank assunng foreign buyers of all rights and privileges of ownership. As of 1994, the Foreign Investment Law allows these deeds to be established for a term of 50 years and are renewable upon termination. This process protects the rights of foreigners and makes sure that the transaction is legal and unencumbered.

Title Insurance
Starting in 1996, Stewart Title Guarantee Company has agreed to underwrite title insurance to our clients, should they wish to have it. The cost for this insurance will be approximately I % of the insured amount. We view this commitment by the one of the largest and most liquid Title Guarantee companies in the World as a strong endorsement of the security of the Real Estate business in Mexico.

Taxes
Property taxes are very low in Puerto Vallarta. Known as 'Predial' - the mil rate is .08 % of the assessed value, paid every bi mester. determined at the time of sale. Property taxes have historically been low in Mexico because they have never been considered a source of govemmental revenue.

The Closing Process
The closing process generally takes between 30-45 days, with paperwork and escrow processes coordinated through our offices and a local public Notary. Closing costs are paid by the buyer; with the seller paying any capital gains taxes and real estate fees. The buyer and seller need not be present at closing, but may be represented by their Sales Associate via a power of attorney.

Property Ownership Through a Corporation
A 1994 change in the Foreign Investment Law now allows Mexican corporations -- even those with 100% foreign ownership -- to own property in the 'restricted' area, as long as it is commercial property. Commercial properties carry higher water & electricity rates, plus require additional governmental reporting.

Maintaining Your Property
For condominium owners, maintenance and security is handled by the Condominium Owners Association, paid for via monthly fees. Homeowners who will be away from their property for any length of time may want to consider Real Estate Vallarta and Beyond's Property Management.

Insurance
Various types of insurance -- including property, liability, damage, and earthquake -- are all readily available in Mexico, at low cost. All types of policies can be written to pay claims in U.S. dollars.

Financing
Real estate purchases in Mexico are no longer all cash transactions, with limited cases of owner financing available. Ask us for details as to how we can pre-approve your credit application within hours.

Rental Potential
In Puerto Vallarta, there exists a very strong rental market for both homes and condos, and Real Estate Vallarta & Beyond is an experienced rental agent who can provide a full range of these services for you. Good properties can expect to rent at least as well as good hotels, which average occupancy of 85%.

Needs Analysis Questionnaire

After many years of experience and thousands of satisfied clients, we have developed the following to help you find your ideal home in Puerto Vallarta. These questions will assist you in determining what type of property best suits your needs, bringing you closer to your dream home.

• Do you feel comfortable about owning property in Mexico?
• Have you ever owned a second or vacation home before, and if so, where?
• Do you prefer a home or condominium?
• How large a place (how many bedrooms) would you be interested in?
• What would you use this property for?
• How often would you be coming here over the next five years? 5-10 years? Ten years in the future?
• Where do you want to be? (Close to the beach, mountains, downtown or modern services... )
• Would you be interested in renting your property while it IS not being personally used?
• How soon would you be ready to acquire your property?
• What price range are you considering?
• Do you have this amount currently available in cash or cash equivalents?
• Are there any other considerations that are important for us to know about in selecting properties for you to view?

Puerto Vallarta Real Estate Market - Overview

The question posed the most by foreign purchasers is "Will my property increase in value'?" Short-term property speculation, and resulting personal net worth increases, is not a concept that can be readily applied to the Mexican real estate market. Traditionally, buyers have purchased properties in Puerto Vallarta for second home or retirement purposes and not to increase personal wealth through speculation. Until very recently it was necessary to pay all cash. With the advent of mortgage and developer financing, combined with increasing housing quality and foreign demand, price escalation has taken place - and, as a result, owners in the desired areas are seeing rising property values.

Another intrinsic question is "Am I getting a good deal'?" The answer is yes if you are comparing what money will buy, in relative terms, to the housing market elsewhere (outside of Mexico). A buyer's concept of "value" and "price" here in Mexico encompasses more than mathematics: the beauty, the ambiance, safety, cost of living, and life goals...

General Overview
The 1995 Peso devaluation severely impacted real estate development in Puerto Vallarta. Many projects in the planning stage were abandoned, while projects underway were left for bank foreclosure, in a state of partial completion, or terminated and sold at fires ale prices. Internal devaluation hit the Mexican middle class hard, virtually drying up demand from within Mexico. Externally, foreign investors and purchasers became leery of buying property in a foreign country experiencing economic uncertai nty. The Peso devaluation left Puerto Vallarta with excess inventory which has taken over two years to absorb.
During the past two years, new projects were virtually on hold and those completed were small-scale in nature or of infill proportions. Over the past 12 months Puerto Vallarta's real estate sector has seen resurgence in demand by foreign investors and purchasers, whether it be for mega-developments, small-scale infill projects, single-family cases and villas, or condominium units. The healthy state of the United States' economy, the now externally perceived stability of Mexico, the entry of US-based mortgage financing, and positive consumer confidence have underpinned and enhanced the increased real estate demand in Puerto Vallarta.

Around the Bay of Banderas
The real estate market can be divided into five distinct zones. The most northern zone, in the STATE OF NAYARIT, is approximately 45 minutes from central downtown Puerto Vallarta. The mega-resort in c- Punta de Mita is under way and this area will become one of exclusivity, anchored by the Four Seasons Hotel. Returning toward Puerto Vallarta are the towns of Destiladeras and Bucerias which are fast becoming desired residential areas. Next is Nuevo Vallarta which is desired by those seeking privacy and yachting facilities. There are plenty of buildable lots and large parcels available, but the choice pieces along the ocean are beginning to dwindle and prices are starting to firm. For residential properties, there is a myriad in all prices ranges, but choice pieces begin in the mid-$200s.

MARINA VALLARTA is the next most northern area, located close to the airport and 15 minutes by taxi from downtown. This is a master-planned community with a marina, golf course. residential units, hotels and vacation clubs. The 465-unit Bay View Grand condominium complex has just initiated a 3-year sales program. There are still buildable lots available. Complete buiIdout of this area should occur by the end of the decade. The marina environment looks and feels like "home" back in the States, but with a Mexican flair of flora and fauna. Buyers choose this area because of its ambiance, golf, pricing, and American development similarity. Prices and rental income for residential real estate are still somewhat soft and will remain so until this area is entirely developed. Lots can be obtained starting from the mid-$50s, condominiums from the low $100s, and homes from the lower-$200s.

THE HOTEL ZONE stretches from Marina Vallarta to the edge of "Old Town" south side Puerto Vallarta. Stores and restaurants are within walking distance. This area is practically totally build out although buildable lots are still obtainable. There is a variety of homes and condominiums in all price ranges. Real estate is of typical Mexican architectural style appealing to the lower-end buyer. No large-scale residential or condominium projects have recently been undertaken except for Marbella appealing to the budget-minded (starting in the 10w-$60s). The residential area of Las Gaviotas attracts middle-class Mexican buyers with homes starting in the upper $200s. Above downtown is the residential area of Gringo Gulch, so named because many foreigners purchased homes here close to where Elizabeth Taylor and Richard Burton resided. This area is typified by narrow winding streets, density, and older homes emphasizing Mexican architecture, appealing to buyers looking for residences in the older, central section of Puerto Vallarta. Prices here are firm for the premier properties and demand has not waned since Richard and Elizabeth first chose to reside here. Home prices begin in the low $300s.

SOUTH OF THE RIVER CUALE is "LOS MUERTOS" Zone, a 10-minute walk from the Malecon. The area has gone through "regentrification," becoming an eclectic blend of restaurants, gift stores, art galleries, and traditional Mexican tiendas. Basillio Badillo is "restaurant row," offering fine dining establishments. The atmosphere is less hectic than the Malecon. The mix of people gives this area a relaxed atmosphere, from well-heeled international tourists to local residents doing their daily shopping. The area is totally built out, comprised mainly of condominium buildings. Located along the public beach are some very well designed and maintained condominium buildings. This area and the southerly contiguous Amapas area are highly in demand. Rental income is all but guaranteed, and resale prices are firm for better quality condominium buildings. Condominiums start in the mid $100s and homes in the Amapas area start in the high-$400s.

THE CONCHAS CHINAS portion includes some of the most beautiful villas in all of Mexico. This area from the beach, winding up into the hills, is probably the most coveted in all of Puerto Vallarta. It is purely residential (the majority are homes) bordering on the exclusive, which is a major attraction. Property values are very firm, rental income is guaranteed. Since this is a low-growth area, price speculation is a certainty. Buildable lots are available, but those remaining will required higher construction costs due to the hillside location. A new 10-unit project overlooking the Bay (Villas Banderas) has just opened its doors priced in the mid-$300s. Other projects are anticipated, but the beach area is, essentially, all built out New building ordinances enacted within the last three years have added to the cost of construction, additionally firming the price of choice real estate. A new proposed condominium project on the hillside is still in the planning stages (La Vista). Homes in this area begin around $400,000.

THE LAST ZONE, STRECHING FROM OLD TOWN SOUTH TO MISMALOY A, is the SOUTH SIDE. This area is tranquil and has the feel of seclusion, yet is close to downtown activities. Generally, a 10- 15 minute taxi ride is required. There are condominiums, villas, a few time-share projects, 4- and 5-star hotels, buildable lots and acreage within this zone. Purely residential, the sweeping views of the Bay, lush jungle backdrop, and tranquility are very much in demand. The last new project in this area, Los Palmares priced from the upper-$200s, has met with success. Remaining beachfront vacant land is suitable for casa/villa development. Rehab projects of existing condominium buildings are in progress. Further new construction in this area will have to wind its way up the hillside. Residential real estate prices are firm and should remain so. Lots can be obtain from the low $40s, condominiums from the 10w-$100s, and homes/villas from the low $300s.

The Outlook
The real estate sector IS a textbook case of supply and demand. The su pply of prime desirable property is limited, and demand IS beginning to exceed supply. These areas (central and nearby environs along the beach with views) are almost completely built out. New construction before this year has been biased toward the North and South sides within 20-25 minutes of the downtown area. Now, it is anticipated that demand will continue on the upswing and the northernmost stretches (Punta de Mi ta) are being developed. Real estate price inflation is becoming a reality and savvy buyers are taking advantage of new projects and pre-construction discounts. Mortgage financing, by developers and others is available and is another big inducement to purchase. Puerto Vallarta, at this time, is a sellerfs market and knowledgeable buyers sense that they should buy before they are priced out of prime property. Sellers are now holding firm on their price in the most desired areas of Puerto Vallarta.

In summary, the saying "Location, Location, Location" holds true in Puerto Vallarta. The premier real estate properties are situated close to town and along the beach with commanding views of the Bay. Anyone contemplating buying are looking for just that. Virtually almost all prime property has been built out, and prices are firm in the desirable locations.

AREA DESCRIPTIONS

Marina Vallarta
A complete resort community combining a SSO-slip marina with championship golf, shopping, dining, entertainment, night life and a range of residential options. Numerous luxury condominiums and villas border on both the marina and golf course, plus lots are available for construction of single family homes. A full array of services are found in easy reach, oriented to English-speaking foreign residents and tourists. The most modern of Vallarta's exclusive communities.

North Vallarta (Hotel Zone)
These areas are the pr im e residential areas for Vallarta's professional community. Las Gaviotas is the preferred place for Mexican residential, country-style living, while Versalles offers excellent values in smaller homes. Numerous lots are available, as are existing home sites. All services are within easy access to these neighborhoods.

Central 'Viejo' Vallarta
For those longing to live in Puerto Vallarta and to truly feel the soul of this quaint Mexican village, there is no better place to live than in 'Viejo' Vallarta. The first foreigners to settle here chose the area now known as 'Gringo Gulch' to build their villas, lured by the panoramic views of the bay, mountains and Cuale River. Constant, cooling breezes add to the enjoyment of the wide terraces and open 'Vallarta' architecture employed in the majority of homes found here. In addition to villas, duplexes and isolated condominium buildings. a limited number of small lots remain available.

Nearby Los Muertos beach also offers residents a truly authentic Vallarta ambiance, with easy access to all services. Here, condominiums offer excellent values in oceanfront living, plus a popular neighborhood for dining, night life and lazy days at a lively beach. The appeal of Los M uertos is enhanced by the excellent rental potential in this area.

Conchas Chinas / Amapas
This is the favored area in Puerto Vallarta, where convenience combines with exclusivity, and breathtaking views are enjoyed in privacy. Conchas Chinas is known for its superior construction and strong neighborhood association which works to maintain the quality of services in this area. With limited growth potential and strict density restrictions, its limited supply leads to higher prices in both the luxury condos and exclusive villas found there. This is the area of first choice for well-to-do foreigners looking to acquire a home in Puerto Vallarta.

Mismaloya
Mismaloya was chosen by famed film director John Huston to be the location for his movie "The Night of the Iguana". Drawn to this small, sheltered bay by its tranquillity and spectacular natural beauty, Huston would still find much of its original appeal in tact today. This is a favored area for those who are looking for peace and quiet, plus an preferred neighborhood. There are excellent condominium projects located directly on the beach, all offering strong rental and resale markets. The geography will limit future growth and ensure the exclusive essence of this area remains. Home sites and lots are available on the hillside, and to a lesser extent along the oceanfront. Still a key attraction IS the exceptional beaches that surround Mismaloya Bay.

Nuevo Vallarta
Located just north of Puerto Vallarta's International Airport across the Nayarit state border, Nuevo Vallarta is designed for privacy and exclusive living. An abundance of shade trees and tropical flowers cover Nuevo Vallarta, while a series of canals and waterways makes it an ideal community for boaters. Many of the privileged villas located here come with private docks. A new marina development 'Marina Norte' is under development and will enhance existing marine facilities, plus add a 500 slip marina and additional home sites. There are only a limited number of small condo projects in the area, but single family lots are available for construction. Several five-star resorts line the beaches, which are considered some of the best in the bay with soft, white sand.