Spring arrives in Merida with a bang! And this year, that bang was just a little bit louder. We started spring with a huge and violent storm that took out a lot of trees, electrical lines and rained hail down on the centro of Merida.

Now we are in the two months that no one loves in Merida. Contrary to the expectations of many visitors, April and May are our two hottest and driest months. Usually April and May are VERY hot, and there is not a cloud in the sky. In this hot season, we residents stay in the shade and look forward to June’s daily thunderstorms. By the time June comes around, the rains are so welcome. They drop the temperature and bring the trees and gardens back to life.

This year the dry season has been pushed off a bit by dramatic displays of lightning and two very heavy storms over the past few days. Best of all, these storms have brought pleasant cool evenings.

One of the greatest pleasures of Merida is spending the evening on a patio somewhere, dining under the stars. For this ritual, I suggest sitting outside at Hennessy’s Irish Bar, or at the roof-top bar at Rosas y Xocolate for views of Paseo Montejo. Enjoy a glass of wine or a cold beer as a way to stay cool as you enjoy the view!

As we come to the end of yet another year in sunny Yucatan, we have much for which to be thankful. The heat is over now and we are entering those months of 75-80 degree weather which make winter in Merida such a complete delight. This year passed without any hurricanes, and even though Merida always weathers hurricanes beautifully, we are thankful for that as well. We are thankful, too, for the peace and safety we enjoy here in the Yucatan. There is so much bad news in the worldwide press about gang warfare in other parts of Mexico. It cannot be said enough that Yucatan remains a state completely unaffected – a world apart.

Merida was just the subject of the popular New York Times travel series, 36 Hours In…, which you might enjoy:

36 Hours in Merida, Mexico

Let me take this opportunity to wish all our friends a very happy Holiday Season and say many thanks to all of you for your support, which has made 2011 another great year for all of us! We look forward to 2012, not the end of the world but, as our Maya friends living here have said all along, the beginning of a new and exciting cycle.

I have had several questions lately regarding IRS filing requirements for US citizens with corporations, bank accounts and fideicomisos in Mexico.

Over the past few years, there have been a number of changes to the US tax code. Some of these changes affect American citizens who hold property in a foreign country, who belong to a foreign corporation or who are beneficiaries or trustees of a foreign-owned trust. My good friend Robert Schilling, a CPA in New York, has an investigation underway. More details will follow as I receive them.

Robert says that the following seems likely, although the IRS needs to provide additional rulings:

• Persons with their residential property (no cash) in a fideicomiso should probably file Forms 3520 and 3520A.
• Persons with a Mexican bank account need to file other forms (unknown at this time), in addition to the 3520 and 3520A.
• Persons with a foreign corporation need to consult a CPA who is well versed in tax law as it applies to foreign-owned property.

There is a great deal of confusion, and I think the majority of people do not file, simply because it is so difficult to get information. Bob recommends filing in order to avoid any potential penalty for not doing so.

If you want to do some investigating of your own, here are links to information and instructions about those forms on the IRS website:

• IRS Form 3520
• IRS Form 3520A

More information will be posted as we receive it.

Finally, back in Istanbul, I moved into part of an old Ottoman building (perhaps 150 years old) close to the Galata Tower on the Golden Horn. I was particularly looking forward to this for a number of reasons. My host, Fateh, who I met through the AirBnB website,  sounded just my kind of person… very interested in restoration work and the history of the older homes in Istanbul.

I know many of you already know and love this amazing, vibrant city.  It had been 17 years since I had been there and it has changed so much. Many people now speak English and many are fluent in Spanish too, due to Istanbul’s increased popularity as a tourist destination for people from all over Europe.  This was my chance to get to know the city and explore alone.

Many of the old areas of Istanbul are now being “gentrified”. Just like at home here in Merida, there is a new appreciation for the old architecture and for the advantages of living in the center of the city. Unfortunately prices have sky-rocketed, although I am sure the old homes in the city center are still a good investment. Unlike Merida where most homes are single story, Istanbul’s Ottoman homes are three or four stories high and are being divided into flats. Apartments, or flats, are the most economical option for most people, whether buying a second home or retiring full-time to Istanbul. They purchase one or perhaps two levels in the home, which then is operated as a co-op or condominium.

Our huge older homes in Merida often got divided into slices as families grew, but there are separate footprints and the homes have separate titles. You can see this on some blocks in the city, where there are two to four homes that share a common architecture or even the same roofline, but are painted different colors and now have different addresses. In Merida, because of this, we have no need for the co-op model.  The other big difference between Merida and Istanbul are the construction materials.

In Istanbul, wood was and still is plentiful. And between the wood, they use brick, another Merida rarity.  Here in Merida, when you open a wall,  you find rock and more rock, held together with lime mortar. In Istanbul, both old and new construction includes wood and brick.

The narrow winding lanes lined with tall houses on each side have meant that major fires have gutted and destroyed much of Istanbul’s old architecture. Still,  much remains and can be a challenge to restore…  so much so that in some cases I wasn’t sure whether I was seeing a house being built from scratch or a restoration!  It was quite difficult to get good photographs, too. The owners thought it would be dangerous to have me wandering about on their scaffolding and I also felt sure that some work was being done without all permits being entirely in place. This doesn’t mean that the work was being done badly or not up to standard. I have been told paperwork can be extremely tedious and time consuming in Turkey… always one more rubber stamp to be obtained and another few month’s wait while paperwork sits in the pile.

Here in Merida, while that may have been the case years ago, nowadays we are thankful to have a far more organized permitting system, making it relatively easy and cheap to get your plans approved and work started.

Rainy Season has a bad sound to it.  If you live in another part of the world, you might hear those words and expect Yucatan to be  muddy,  soggy and full of mosquitoes during that time.  So,  you decide to visit the Yucatan Peninsula between the months of June and November, which is  our “rainy season”,  I think you will be in for a pleasant surprise.

Unless there is some highly unusual weather pattern,  mornings will be sunny and bright… in other words, perfect weather for doing almost anything there is to do in Yucatan. It will be hot.. in the high 80s or mid- 90′s many days. And it may be a little humid. But the humidity here is nothing like I have experienced on the US Eastern seaboard.

Our very hot months are April and May when the heat can be scorching. You might even call that time of year the Yucatan summer.  But I have found that most visitors, are not uncomfortable in July, August and September in Yucatan.  As Yucatan has no standing water, other than fresh-water cenotes that are constantly being refreshed from underground, you will find surprisingly few mosquitoes. And the benefits of being here during this time far outweigh the drawbacks.

Rainy season is actually my favorite time of the year.  The heavy thunderstorms that we get on many afternoons around 4-5 PM drop the temperatures into the 80s or even the 70s in the evening. The countryside is lush and green, and the corn is “as high as an elephant’s eye”.

Best of all are the literally thousands of butterflies of all sizes and colors.  It is worth venturing out for a day in the country onto the smaller roads just to experience the butterflies.  While use of chemical fertilizers and weedkillers is growing, these  are generally only applied on a few small parcels of land. This leaves the vast majority of Yucatan chemical-free.  As agricultural plots are very small and cash is limited, I have never seem aerial spraying.

Growing up in England as a child, I remember the many butterflies most of all. It is a sadness and disappointment now to go back in summer and see very few of my beautiful friends, even though my parents live in the countryside.  On Yucatan’s back country roads, they rise up around you in clouds – yellow, brown, blue, black, big and small.  And the summertime is the best time to view them. Take a trip out to the countryside in the Yucatan and you’ll see what I mean.

When last we chatted, I was in the town of Harrar, beginning a long circuit through Eastern Turkey. Another place I visited that is worth mentioning is Mardin.

The town of Mardin, is carved into terraces of rock beneath a steep cliff topped with a ruined citadel. It looks out from its perch over the dry plains which run uninterrupted the short distance to the border with Syria. Here, there is one drivable street and a spider’s web of narrow alleys running up and down and around the terraces on which the town is built. Mardin reminded me a little of Zacatecas, Mexico! The town is flanked on both sides with three- and four-story stone houses. No wood here. I noticed this in other parts of Turkey too… stone where we would use wood. In the photo you can clearly see the stone corbels supporting the second story. (Even here in Yucatan where there is much more stone than wood, our corbels are always made from wood.)

This contrasts with Istanbul, where the old houses are almost entirely wood, and few remain after fires, neglect and termite attacks. In Mardin, stone protects your home from these hazards, and the snake goddess will protect it from all others! Just to be on the safe side, locally made Mardin soap, pure and natural will take care of any physical ailments.

We detoured through the town of Diyarbakir, one of the largest cities in southeastern Turkey. At 1.5 million people, it’s about 50% larger than Merida is today. We went there to see the famous black basalt walls which form a 3.4 mile circle around the city and have protected the city for more than a thousand years. These are second in length only to the Great Wall of China.  There are four gates and 82 watchtowers along the walls, all built in antiquity and RESTORED in 349 A.D. (I wonder if any of Merida’s restored houses will last that long…).

In the 20th Century, the city went through many turbulent times, including massacres of Armenians and Kurds.  It was also the site of a major NATO Air Force Base for many years, but this was closed down in 1997. And Diyarbakir has been a center for Kurdish guerilla activity…but as you can see, the locals were singularly unthreatening! (And THAT reminded me of almost all of Mexico… reported in the press to be dangerous, but warm and welcoming and safe when you actually go there…)

Diyarbakir is situated on the banks of the Tigris and was once a hub of the ancient Silk Roads.  It became known for its craftsmen who produced glass and metalwork.  For instance, the gold and silver decorated doors of the tomb of Imam-i Azam in Baghdad were made by craftsmen from Diyarbakir.  There are still some jewelry makers and silversmiths in the city, but the fame of the craftsmen from here has long passed.

Today this city is relatively unvisited by tourists. This is a city where I would love to spend more time.

The main joy of traveling and the impetus to get out and see the world is always the people we meet along the way.

Here in my last photo are two more little friends from Eastern Turkey.

I came to Mexico originally because I love to travel… meet new people, experience new cultures, see new horizons. Of all the places I’ve traveled, I chose Mexico as my home. But that doesn’t mean my wanderlust is gone. Luckily for me and so many of us, I can run my business thanks to the Internet, and still indulge my desire to see other parts of the world.

I have been away from the office now for more than a month. The work goes on at Tierra Yucatan, of course, and the wonders of modern communications have let me stay on top of business from some fairly distant parts of the world. For the last few weeks of June that distant part of the planet was Eastern Turkey, on the borders with Syria and Iran.  Eastern Turkey is less developed than the western part of the country and is filled with fascinating people and cultures. People come to this austere landscape of desert and mountains to get a glimpse of ancient cultures through architecture, museums and the living descendants of those cultures… much like they do when they come to the Yucatan.  Ruins and sites date back to before Biblical times… the Book of Genesis in the Old Testament mentions that Abraham and his family lived in Harran for awhile, and this is a city that I visited.

Of course, although the history and archaeology always fascinate me, I found myself consistently wandering off in the direction of interesting architecture. I thought you might like to see some photos and hear about what I saw there.

The mud brick and rock “beehive houses” of Harran (also called Altınbaşak)  are quite unique in Turkey, but I did learn that there are villages in Syria that still are using this method of construction.  The house in the photograph here (and in the photo gallery on our Facebook page) consists of 26 rooms! Each room has a conical roof built of mud brick with no mortar.  The bricks are placed so that each is slightly overlapping the one below. Gravity and I’m convinced a little bit of prayer hold them all in place as the cone narrows towards the top.  A small opening at the tip of the cone allows hot air to vent, and I found the whole house to be deliciously cool and breezy. Even the kitchen, pictured below and to the right, was cool enough. And you can see from the photo how the bricks are the basic building element, which are then covered over with mud. There are not as many colors in the architecture here as we have in Merida – mostly earth tones and the villages blend into the landscape… this architecture is more analogous to the Mayan huts that you see in the countryside outside the city.

These houses are really family compounds, built around a central courtyard where all family activities take place.  As the family grows and children marry, new mud brick rooms are easily added and the house expands. If you feel like enjoying the experience, there is even a compound in the village that serves as a simple hotel where visitors can spend a night or two! I found the architecture fascinating, but was happy to sleep in my more modern hotel.

The architecture in Harran is so different from our colonial architecture in Merida, but I noticed some similarities to both the colonial homes and the Maya houses. The houses in Turkey and the colonial homes of Merida are often centered around a courtyard, the place where the family gathers and enjoys visiting. That is true here in the Yucatan as well, where our courtyards are often the most beautiful place in the home… totally private and hidden from the public eye. The Mayans, on the other hand, seem to build family compounds by having a group of separate oval-shaped houses that all share the same property and often have a common kitchen. Merida doesn’t have the same rug tradition as the Middle East, but in Merida’s colonial homes, we adorn our floors with tapetes (rugs) of tile. Everyone around the world loves a beautiful floor! And it is certainly true that a beautiful handmade Kilim rug looks beautiful in both places!

In my little village of Tepakan, an hour outside of Merida, it is our annual Fiesta time!  Or at least, we are getting ready for the first official day of the fiesta, April 28th, which is the date of the feast in honor of the patron saint of the village.  The temporary bullring is being built, and there will be traditional dancing at the city hall accompanied by free cochinita tacos for all.

Here in Yucatan, our bullfights are rather different – in most cases, the bulls are not killed.  The ring is built each year from poles and palm leaves provided by the townspeople. It is a communal event as different families from the village build their own sections, and then have the right to rent out the seats in their section.

Every Friday, Saturday and Sunday for two weeks we will have very loud dances  with very loud music from midnight to 5 a.m. with many voladores being set off. Voladores are those home-made bottle rockets which are sent up into the air with a big swoosh, and make a huge BANG. There won’t be much sleep to be had and much beer will be drunk during that time.  I thought you might want to share the fun by seeing my photos of the preparations….

Click here to see our Facebook photo gallery (even if you aren’t on Facebook…) of the preparations. And if you are on Facebook, “like” our page while you are there! We update our Facebook page often, including a new feature: weekly real estate specials, sometimes with significant price discounts!

“As individual investors, it makes sense that we would look to the investment activities of larger corporations and governments as an indication of where to put our money. When considering investing in Mexico, it might help to take a look at who else is investing here, what they are investing and what they are saying about it.

According to the United Nations Conference on Trade and Development, UNCTAD, the total foreign investment in Mexico in 2010 reached a total of $19 billion dollars (USD). This placed Mexico at Number Six in the list of countries receiving direct foreign investment, ahead of places like Germany and the United Kingdom.

Canada, as it turns out, is one of the leading investors in Mexico. From the year 2000 until 2010, Canada accumulated a combined investment of $9.125 billion USD in Mexico. The leading Canadian corporation investing in Mexico is the mining company, Gold Corp, which invests in real estate for reasons different from most of our clients. Last year, Gold Corp was the leading foreign investment entity in Mexico, with a total 2010 investment of $1.5 billion USD.

Other Canadian companies that heavily invested in Mexico last year include Bombadier, which will be building its Learjet 85 near Queretaro and auto part maker Magna International, which is building a new plant in the state of San Luis Potosí.

According to the State Department website, Mexico’s total foreign investment in 2009 was $14.4 billion USD, showing us what effect the economic downturn has had on Mexico in terms of foreign investment (FDI was $24.7 billion in 2001). The United States was (and still is) the largest foreign investor in Mexico, with a 2009 figure set at $6.4 billion USD.  The Netherlands and Spain are also large investors, with the Netherlands investing $7 billion USD in the first half of 2009.

Of course, Foreign Direct Investment (FDI) in Mexico has increased dramatically since the North American Free Trade Agreement (NAFTA) started, bringing with it many questions about its effect on the Mexican economy and culture. What isn’t in question, however, is that the Mexican economy presents many opportunities for investment and for realizing substantial returns on that investment.

How does this apply to the individual looking to buy real estate in Mexico? Certainly, the more foreign corporations that invest in Mexico, the more there will be an influx of foreigners coming to look after those investments. In addition, the large corporate investments here speak to the inherent growth of Mexico as an economy. Mexico is a country full of young, upwardly mobile and acquisitive citizens… many of them getting degrees, good jobs, houses and cars that were not in the picture for their parents or grandparents. Anyone who lives here can attest to the consistent building and development that has been continuing, despite a slowdown that occurred from the worldwide economic downturn and from the swine flu scare.

The swine flu scare is now a thing of the past. The increasingly negative press coverage of violence in Mexico fails to discriminate or make comparisons to levels of violence in other countries, but truthfully that violence affects a very tiny percentage of areas and people in Mexico. And the economic downturn’s effects are definitely diminishing. The Mexican population and the attractiveness of Mexico as a tourist and retirement destination continues to grow and flourish… we think that means investing in Mexico is a good idea, now more than ever.

A recent review of real estate trends as reported from around the world point to good news for those of us invested in or investing in Mexico.

Latin America is quickly becoming the darling of investors of all kinds, as they cast their eyes around the planet, looking for the next area of rapid growth. The Economist magazine reports that the region has 15% of the world’s oil reserves, some of the largest stocks of minerals, 25% of the world’s arable land, much of it untilled, and 30% of its fresh water (from this article on a hotel industry website).

The article goes on to say that many Latin American countries are actively embracing globalization, led by Brazil and Mexico… those two countries alone account for 65% of Latin America’s GDP. The hotel industry article points out that Mexico alone has over 110 new large hotel projects breaking ground in 2011.

A trio of real estate investment researchers from Price Waterhouse Cooper (PwC) in New York and London also report that Brazil and Mexico are two emerging real estate markets with enormous potential. “Where the US has gone boom-bust and Canada offers only modest growth, Latin America’s story centres on the enormous potential of two emerging markets – Brazil and Mexico. Together they account for two-thirds of the region’s population and most of its growth dynamics.”

While acknowledging that investors have concerns about the violence associated with the Drug War in Mexico and the corruption associated with the politicians there as well, the triple benefits of a hard-working population, a growing middle class and an increasing demand for homes and consumer goods bodes well for the future of real estate in the country. Mexicans have not over-borrowed or over-built, like their American counterparts, so there is still a demand for capital and for development.

The violence issue is always painted with a large brush in the US and International media, but as we know and as has been acknowledged publicly, the Yucatan is one of the safest places to be in Mexico. Not only that, a recent article in USA Today states that the safety record of the Yucatan compares its 2009 murder rate with that of Wyoming and Montana:

“The state with the lowest murder rate is Yucatán, the Gulf of Mexico state known for its beaches and Mayan ruins. Its murder rate of 2 per 100,000 was comparable to Wyoming and Montana.”

The Price Waterhouse Cooper analysts quote a survey of more than 1,000 leading real estate experts, including investors, developers, property company representatives, lenders, brokers and consultants.

“There’s a large hole to fill, especially for construction loans. New laws allow domestic pension funds to invest in real estate and infrastructure, which could increase property market liquidity and demand for product. We’re seeing the chequebook at the end of the tunnel.”

Even though the downturn in the US economy has definitely hurt Mexico, there are some ways that it has helped as well. More US manufacturers have relocated to Mexico recently, helped by the downturn in the Mexican peso. Retail is definitely on the rise here, as members of that growing middle class strive to live just like their American counterparts (the ecological impact of this phenomenon is another discussion…). There is a huge population of Mexicans with disposable income who don’t have a TV in every room or a car for every driver, so the potential is tremendous. And of course a growing economy also means a growing demand for real estate.

In a recent interview, Carlos Slim, the richest man in the world, told the reporter that he will be focusing on two aspects of his holdings in the year to come: mining and real estate. Mexico’s stock market hit an all time high early in December of this year. These signs and more point to a growing real estate market in the next year, even if the United States’ economy does not significantly improve.