So, you’ve made the exciting move to Mexico, and you’re now exploring rental options. As you settle into your new life, one of the first practical questions is: paying rent in Mexico?
This comprehensive guide will answer that question and provide insights into managing your finances while living in this vibrant country. We’ll delve into local rental practices, various payment methods landlords typically prefer, accessing your money from foreign bank accounts, and handling everyday expenses.
Whether you’re a retiree seeking a peaceful paradise, a digital nomad embracing adventure, or a part-time snowbird chasing the sun, this guide is your essential companion to confidently navigating Mexico’s rental landscape and banking system.
Cash in Mexico is KING, But Why?
In Mexico, the phrase “Cash is King” holds true, which might seem odd if you’re accustomed to the prevalence of debit and credit cards in North America. Cash remains the preferred method for countless transactions, including paying rent in Mexico.
Even though some businesses, particularly in urban areas, have adapted to accept card payments after COVID-19, many landlords still prefer cold hard cash.
Imagine this: your rent is due on the 30th or 15th of the month, the expected rent payment dates in Mexico. What happens next? A rush of people heads to the ATMs, often leading to some machines running out of cash. To avoid this, plan ahead by increasing your daily ATM withdrawal limit with your home bank and withdrawing your rent a week or a few days before the popular payment dates. It’s the only way to ensure you have the cash you need on time.
But why the reliance on cash?
One possible reason is that many landlords aim to evade taxes on rental income, and cash transactions enable them to fly under the taxman’s radar. While this might raise moral questions, it’s crucial to note that finding rentals with bank transfer payment options, especially in the lower-cost segment, can be challenging.
Exploring Bank Transfers
Suppose you have a bank account in Mexico. In that case, you can use SPEI (Sistema de Pagos Electrónicos Interbancarios) for domestic bank-to-bank transfers within Mexico.
Paying rent in Mexico through SPEI is highly efficient if you and your landlord have Mexican bank accounts. It’s like the ACH system in the U.S. or EFT in Canada, facilitating quick, low-cost transfers between banks. To initiate a SPEI transfer, you’ll need your landlord’s CLABE or the 10-digit number linked to their bank account. However, ensure that your bank participates in SPEI – you can check the latest list of participating banks for confirmation.
There are numerous benefits to paying rent via SPEI. It establishes a clear transaction trail in your bank account, enhancing transparency. Importantly, it lets you avoid the hassle of withdrawing large sums from ATMs, mitigating potential risks associated with cash withdrawals, including scams and thefts.
While convincing your landlord to accept wire transfers can be advantageous in multiple ways, it’s only sometimes feasible due to various factors, such as their banking preferences. In such cases, try to stagger your ATM visits to avoid the rush and potential security issues.
Paying The Wise Way
Many foreigners living in Mexico live their whole lives without opening a Mexican bank account. So, transferring via SPEI isn’t an option. Instead, you can pay your rent in Mexico using services like Wise, Remitly, XE or similar to access your money.
Assuming your landlord accepts wire transfers, setting up a quick transfer through Wise is safe, secure, and usually cost-effective.
Remember that the choice of transfer method often depends on your specific circumstances, your landlord’s preferences, the exchange rate offered, and your level of comfort with each option.
Should You Open A Bank Account in Mexico?
Opening a bank account in Mexico is more challenging than you may be used to. Banks have high-security practices in place, and they usually want the account holder to not only be a permanent resident of Mexico but also have an RFC.
Not only that, but you’ll be asked for an insurmountable amount of documents, and you can expect the process to be a few hours with no guarantee that you’ll walk out as a new account holder.
For this reason, many expats living in Mexico opt out of having a Mexican bank account. Instead, they access their money in Mexico from a foreign bank by using ATMs regularly or paying with their debit/credit card whenever possible. And if you think this will be you, I recommend looking into a Charles Schwab checking account. Which offers zero international transaction fees and zero ATM fees. That way, you can get more of your money without all the extra fees.
When I DO Recommend Having A Mexican Bank Account
If you plan to live in Mexico long term, paying your rent won’t be the only expense you have. You’ll likely want to shop on Amazon Mexico, Mercado Libre, Rappi, Grocery delivery or some other online retailers. They sell everything from handmade items to furniture, household goods, and even vitamins. But without a bank account in Mexico, you won’t be able to check out on these platforms.
Therefor if you need help opening a bank account in Mexico, I recommend asking a Spanish speaker to accompany you and help assist you with a personal banker if the staff foesn’t speak English. Or you can hire one of our recommended bank facilitators.
To get instant access to our directory of contacts, which includes our recommended bank facilitators, check out our COMPLETE Mexico Relocation Guide.