Renting or buying in Mérida: the numbers no one shows you

“Buying always pays off” is a myth. In Mérida, with these numbers, sometimes it does and sometimes it doesn’t. Here’s the full calculation.

The question isn’t “do I rent or buy?” but “how long will I stay, and what do I do with the money I don’t put into a down payment?” Once that’s settled, the decision is almost automatic.

The example

Take a mid-range house in the north of Mérida:

• Purchase price: 3,000,000 pesos.
• Equivalent rent: 16,000 pesos a month.

If you buy with a mortgage (20% down = 600,000; loan of 2,400,000 at a fixed rate over 20 years):

Item	Amount
Down payment	600,000
Closing costs (~5%)	150,000
Monthly mortgage payment (approx.)	21,000 – 24,000
Property tax + maintenance + insurance (per month)	2,000 – 3,500

If you rent: 16,000 a month, plus a deposit. The 750,000 from the down payment and costs stays invested (in a conservative instrument at 9–10% a year, that’s about 5,500 – 6,000 a month in yield alone).

The honest comparison

• Renting, you pay 16,000 and “lose” that money, but your capital yields ~6,000 a month and you have zero maintenance, property tax or vacancy risk.
• Buying, you pay ~24,000 a month + 3,000 in costs, of which at first most is interest (not principal). In exchange, the house appreciates: capital gains in Mérida run 6–9% a year in established areas.

The practical rule

Buy if:

• You’ll stay more than 6–7 years (below that, the buying and selling costs eat the capital gains).
• You have the down payment without decapitalising yourself and the monthly payment isn’t more than 30% of your income.
• You want stability and to make the house your own.

Rent if:

• You don’t know how long you’ll stay, or you’re coming to “try out” Mérida.
• The down payment is all your savings.
• You prefer flexibility and having someone else deal with the water heater.

The middle path

Many people who arrive in Mérida rent for the first year to choose the neighbourhood well — see the best neighbourhoods to buy a house— and buy once they know the city. It’s the most sensible move.

If you decide to buy, continue with the pros and cons of investing in property developments and 7 benefits of hiring a real estate agency.