Real Estate Investment in Manzanillo
If you're thinking of
retiring in a few years,
or need a secure, high percentage of return on your investment, here's why you should buy property in Manzanillo NOW!
by Susan Dearing
Please click on photos to enlarge.
Expansion of the Port of Manzanillo
Manzanillo is growing by leaps and bounds. Within the last year, port business and container movement has surpassed Veracruz, making Manzanillo the largest port in Mexico. Expansion is also underway to make the port even larger and deeper, to accommodate bigger ships, heavier traffic, and even more foreign and Mexican companies whose business interests center around cargo movement. In addition to the container ships, several cruise ship lines are now making Manzanillo one of its main stops.
Facelift for Downtown
|Manzanillo, now larger
than Puerto Vallarta with a population of 130,000, is also the headquarters for
the Mexican Pacific Naval Fleet and the Mexican Army.
Manzanillo's growth and improvements don't stop at the port. Downtown, "El Centro," has gotten a face lift. A new central plaza, or "Jardin," with rose gardens, sculptured topiary trees, giant sailfish sculpture, and 2-mile boardwalk along the ocean (complete with benches, statuary, trash cans and palm trees) make visiting the downtown area a pleasure.
|To complete the pretty
picture, electricity has gone underground, and a Moorish-style facade offers visitors
a shady place to walk while they peruse the many shops and restaurants.
Visitors can purchase hand-crafted items, such as embroidered clothing, pottery and glassware, as well as silver jewelry, hats, a variety of T-shirts, liquor, vanilla, coconut candy, native coffee, hammocks, and a variety of other Mexican souvenirs.
|Frequently there are exhibitors (most recently from Oaxaca) with a variety of times to sell, from jewelry to clothing to native liqueurs.|
| City Hall has also
been renovated, and parking, though still a problem, has been expanded.
The streets have been widened with interlocking paving stones; the traffic circle helps direct the traffic flow, and non-skid tile graces the sidewalks in the main shopping district. Here and there are sidewalk tables to stop and sit for a spell, people watch and sip a cold drink.
Power Plant Conversion
|One of Manzanillo's biggest eyesores, the federal power plant, is also undergoing a complete retrofitting. No longer will it burn "combustoleo," a type of crude oil by-product residue (fuel oil #6). It is being converted to natural gas, and the new storage facility for the frozen natural gas brought up from Bolivia and Peru is being built in Campos, an area alongside the power plant. In addition to the conversion, a second port will be built in an area to the south of Manzanillo, Tepalcates. This port will receive the ships carrying liquid natural gas. A regasification facility is also being built, to convert the liquid natural gas into the gas product. The completion of the conversion is estimated to take approximately 3 years.|
The plant is owned by the federal government, and its main purpose is to generate power to sell. The electricity is sold to other states in Mexico, and several Latin American countries. At this time, Manzanillo receives little monetary benefit from the power plant other than jobs for its citizens.
NAFTA Treaty & the Port of Manzanillo
|Another big change is coming in Colima's highway system. When the NAFTA (North American Free Trade Agreement) treaty was initiated in 1994, one of the stipulations was that all three parties (Mexico, United States and Canada) must comply with "international standards" to fulfill its objectives, including "geographical, technological or infrastructural factors." (Chapter 9: Standards Related Measures).|
In layman's terms, this means that Mexico must, on all levels involving trade, bring itself up to international standards. This affects Manzanillo (and all of Mexico) because the entire route to the border and beyond (to the dry port of Kansas City) must be 4-lane. The only stretch left to complete between Manzanillo and Guadalajara is a 52-mile section of Highway 54 in the state of Jalisco. Goods bound for the U.S. and Canada will pass through customs in Manzanillo, but will not be opened or inspected here. Instead, the containers that arrive by ship in Manzanillo will be sealed by federal customs agents, then sent on by semi-trailer to Kansas City, Houston, or St. Louis, where the customs inspection will take place. This will help solve congestion issues, capacity issues, and time delays. (The dry port destination will be determined by the final destination of the containers.)
Now that many Asian countries are using the port of Manzanillo, instead of the ports of Long Beach and Los Angeles, California, the pressure on Mexico (and Manzanillo) for modernization on all levels has increased. (During the longshoreman's strike in Long Beach in 2002, products from Asian countries were diverted to Manzanillo. Surprisingly, though the distance the ships must travel is slightly longer, the lack of delays in the port of Manzanillo have made many shipping lines consider switching. A delay of only one day can cost a shipping line as much as $45,000.) Additionally, rail and driving distances between Manzanillo and Houston are 1,080 miles, and between Los Angeles and Houston 1,495 miles.
|Manzanillo may handle 1
million 20-foot-long container equivalent units (TEUs) this year, a 20 percent
The port is negotiating with Wal-Mart Stores Inc. and Target Corp., the two biggest U.S. discount retailers, said Alfonso Perez Martinez, the port's marketing vice president.
Nissan Motor Co. ships auto parts from Japan to a Tennessee plant using Manzanillo.
|Plans are to enlarge the port even more, so it can handle the new Goliaths of the shipping industry. The new ships are so large, with TEUs stacked 18 wide across their decks, that fully loading and unloading one can take up to three days, even with the fastest available cranes. They're far too large to fit through the Panama Canal, and they ride so deep in the water they can't be handled at certain West Coast ports, notably the Port of Portland. The cargo from just one ship, if it were unloaded all at once and 70 percent of that were destined for points inland, would fill up 16 standard, 350-container trains.|
Foreign Investment in Real Estate
|With more conveniences and a better infrastructure, certain costs are sure to escalate in the future. Of main concern is property values. Demand is up, supply is down. This year, almost all properties sold in Manzanillo were purchased for a minimum of 30%percent more than the previous year. For example, a one bedroom condo on the Peninsula de Santiago sold for $48,500. Eleven months earlier it was purchased for $30,000 USD. And that's only one example. Why the sudden interest in Manzanillo by foreigners? After all, it's been Mexico's best kept secret for all these years.|
According to Candy King, an American who moved to Manzanillo several years ago, and also sells real estate, Manzanillo was "discovered" about 3 years ago. "I think it was a combination of more airlines flying in, more cruise ships, and various articles written by the travel industry," she states. "Also," she continues, "the 'baby-boomers' are now at an age where they are looking for an affordable place to buy for their retirement. Both the Canadian and American dollar are strong, so foreigners have more buying power here than in their respective countries. That's one of the reasons why there are more buyers, and with more buyers, more demand, thus the prices are going up."
Canadian Gerry Szakacs, another real estate agent, agrees with King's reasoning. Szakacs notes that in 2003 approximately 12 cruise ships visited Manzanillo, but in 2004, more than 50. Next year, the port is expecting that figure to triple, he says. He also believes that U.S. and Canadian residents have gotten over the 9-11 terrorist scare and are now starting to travel again. He proudly announces the Canadian dollar "has increased its buying power against the U.S. buck, making it more advantageous to invest abroad."
Modern Living in Manzanillo
What are new homeowners saying about living in Manzanillo? How can you adequately describe Paradise? New residents have been relieved that Manzanillo has all the conveniences of a modern city. The are two new hospitals with intensive care wings, several private clinics, two major supermarket department stores, affordable quality dental care, a variety of restaurants and bars, clean unpopulated beaches and the best climate year-round than anywhere in the world.
Now Manzanillo boasts American chains WalMart, Domino's Pizza, KFC, Burger King, and a soon-to-be-built Subway. A casino is in the near future with off-track betting and slots. Other Mexican chain stores in are VIPS (finished, in the WalMart parking lot), and Liverpool (a department store similar to Nieman Marcus).
In Colima City, just an hour away, there's Sears, City Club, Wal-Mart, Sam's Club, McDonald's, Domino's Pizza, and an Office Depot. A Home Depot is planned. The pace is slow, there's no stress or pressure, and the people are friendly. King adds, "The newcomers I've sold homes to just love living in Mexico!"
Why are more foreigners moving to Manzanillo?
One of the best reasons to move to Manzanillo is the low crime rate. Not only does the state of Colima have the lowest crime rate in the country, but Manzanillo has the lowest in the state. Hearing those statistics gets many foreigners, who live in big cities, where there is a crime every 20-30 seconds, look very closely at safe, laid-back Manzanillo.
Here's an example from this author. Where else could this happen?
"Three days ago, I was, as usual, in a hurry, and shopping at Soriana supermarket. After receiving an emergency call from my office, I quickly checked out, threw the groceries in the car, and raced back to the store. An hour later, I noticed my purse was missing. All credit cards, debit card, prescription glasses, cell phone, passport and other I.D. were in the bag--in short, my life! It was more than 2 hours before I could get back to Soriana, and no purse. I tried calling my cell phone. No answer. About an hour later, I tried again. A man answered. He was a taxi driver, and he said I had left my purse in a cart outside in the parking lot. He had it and offered to meet me back at the Soriana lot. When my purse was returned to me, everything was there, including the money. If you want to meet nice, honest, people, you'll find them here. That's why I've stayed in Manzanillo for 17 years. There are more special people here than anyplace I've even lived." To find out what other residents are saying, read "Manzanillo is a Magical Place."
An area realtor believes that "foreigners are moving to Manzanillo for the same reason we all did. It is a very livable community. The people are wonderful. We are welcomed. There is zero unemployment, so crime is not a problem. It is safe to walk down the street, or walk the beach at night, unlike many places in the U.S. We have approximately 130,000 people, but it still feels like a small town."
She continues, "There are no vendors or time-share salesmen hassling us on every corner. The town is clean and growing every day, with more choice in goods and services. With high-speed internet and our big grocery stores, there is very little that we cannot find to live the way we are accustomed."
In Florida, Lisa and Juan Martinez were living out the American dream, working very hard, making lots of money, feeling the stress. Finally one day, Juan sat Lisa down, and said, "We can't go on like this. We have everything we ever wanted, but no time to enjoy it. Something needs to change."
Soon they started looking for a new lifestyle, and safety and security for their children. Juan was searching for a new business opportunity and included Mexico as a possibility. He found the Hotel La Posada in Manzanillo, which was in an area that was known for being one of the safest in all of Mexico and a good place to raise a family.
Lisa and Juan were a little worried because they were
leaving everything they had ever known, and investing all their money--and
the rest of their lives in an unknown, unproven hotel, and in a foreign
country to boot. But they were willing to work hard, and they wanted a
better life for their children.
It will be 4 years in May since they embarked on this adventure and they haven’t looked back. They are healthier, happier and closer than ever and would not change their life for any amount of money. Their girls are in a wonderful bi-lingual school, they participate in local activities (swimming, dancing, etc.), they have a wonderful, tranquil beach to frolic on and there is plenty of “family time”. And, the hotel business is thriving. They are truly a “Manzanillo success story.”
Roberto Soberano, the "Guardian Angel" of Manzanillo, has lived here all his life. As Radio K'lien'T's "problem solver," he talks with all members of the community and government officials. He tried living in the states for a while, but came back to Manzanillo. He says of Colima, the state capital, "Colima is a big city, with the heart of a small village." The same can be said about Manzanillo. He swears he will never leave Manzanillo again.
Although property values have risen about 30% this year, it is still much more affordable to purchase property here than in other areas with a large foreign population, such as Cancun, Acapulco or Puerto Vallarta. And there are still a few houses with great views priced under $100,000 USD. Try finding anything on the west coast anywhere for a price like that! Of course, Manzanillo has numerous gated communities, such as La Punta and Club Santiago, offering amenities such as golf and tennis. There are also several major spas and health clubs, and a variety of water sports activities available, including kayaking, deep sea fishing and scuba diving and snorkeling. Manzanillo's twin bays offer two 5-mile stretches of unpopulated beach for walking or jogging, and there are areas for bird watching, hiking and camping. Other beaches nearby are good for beachcombing, surfing or nude sunbathing.
Is it Difficult to Purchase Property, and How Long Does it Take to Close?
It used to take a very long time to complete a transaction when a foreigner purchased property in Mexico. Today, the laws have changed to make purchasing property by foreigners more "user friendly," and the Mexican lawyers and notaries involved in a transaction have processed so many closings on homes purchased by foreigners that things can move along rather quickly. Computer technology has been a big boon to searching titles, and filing documents, as well as the standard typing and printing out of contracts and purchase agreements. In a normal transaction, you can close on a property in 45-90 days, exempting Mexican holidays and weekends.
Is it Safe to Own Property in Mexico?
Naturally, there are laws regulating the purchasing of property by foreigners, so when you purchase property, be sure to do it correctly. If you do, buying real estate in Mexico is one of the safest and best investments you'll make. Other articles on this website get into how to buy property and Mexican law.
By setting up a fideicomiso, or bank trust (required by law when a foreigner buys property), the bank looks out after your best interests. You and your family are beneficiaries to the trust, and have all rights to use the property as you wish, e.g., sell, remodel, rent it out, build, etc. To ensure that everything is recorded with the right state and municipal agencies, a "notario" is normally used. A notary in Mexico has the legal authority to affirm that all legal documents are in order, and record the sale through the proper government agencies. A notary's signature is law, and if he handles the closing and takes care of registering all of the documents, your rights are totally protected.
Foreign Investment by Colima Development
Americans from Minnesota have purchased 541 acres of land in Colima on Santiago Bay. Their $400-million project, complete with financing is one of the reasons Manzanillo is becoming very popular and better known.
Spearheading this project and the "Sister City Program" between Manzanillo and St. Paul, Minnesota, is Robert Koens, whose family has owned property in Manzanillo for many years.
| Though still in its
early stages of development, "Las
Cascadas de Manzanillo," will be a 5-star gated community, featuring
winding cobblestone streets, waterfalls and lagoons, and a golf course.
Koens is also responsible for Manzanillo being chosen for the only "Snoopy" statue outside of the United states. (Charles Schultz was one of Minnesota's most famous residents.)
At right: "Snoopy," sharing his photo op with the Mexican Navy training vessel, holds a sailfish (Manzanillo's symbol as "Sailfish Capital of the World") and a Northern Pike (Minnesota's claim to fame).
Other Sister Cities
The Mission Statement of the international Sister City Program: Promote peace through mutual respect, understanding, & cooperation - one individual, one community at a time. Manzanillo is fortunate to have Sister Cities in San Pablo and Hermosa Beach, California; Flagstaff, Arizona; Houston, Texas; Kansas City, Missouri; and St. Paul, Minnesota. Shanghai, China just became a Sister City. The city of Colima has Sister Cities in Redwood City, California, and Norman, Oklahoma.
Sister Cities International is a nonprofit citizen diplomacy network creating and strengthening partnerships between U.S. and international communities in an effort to increase global cooperation at the municipal level, to promote cultural understanding and to stimulate economic development. Sister Cities International leads the movement for local community development and volunteer action by motivating and empowering private citizens, municipal officials and business leaders to conduct long-term programs of mutual benefit.
In the Future
A Wal-Mart in Manzanillo? Now open!
The largest brewery in the world? Modelo is coming to Colima.
Other industries already here? The iron mine, banana and coconut plantations, lime producing orchards and processing plants, coffee plantations, melon farms, organic sea salt marked for world-wide distribution, Coca Cola bottling and distribution plants, irrigation technologies, mango orchards, green chili and jalapeño farms, papaya and avocado plantations, private schools, technical schools, expansion of the University of Colima, to name a few. Get involved in the growth before it outgrows your pocketbook.
Questions? Contact Susan Dearing. Susan has lived in Manzanillo for 17 years, has a scuba shop, owns the web sites www.gomanzanillo.com and www.divemanzanillo.com, and has written two guidebooks. She is a partner in PropertyPros Real estate, the Maria Cumbé Boutique and Bazaar, and Coco Loco Tours.
For a 135-page tourist guidebook about Manzanillo and the state of Colima, click here.
A very special thanks to John Frost who donated the aerial photos for this feature story. John has been photographing and promoting Manzanillo and the "Coasta Allegre" for more than 25 years.