Here are 5 common property development mistakes to avoid in Mexico.
Developing real estate in Mexico can be tricky. But there are 5 common pitfalls many first-time buyers neglect to consider before developing property in Mexico. Here are the risks that may turn your dream home into a nightmare.
1. The market is the king!
A successful property developer in Mexico knows the market and reacts to it. They create a product that follows consumer trends and needs and finance in an accessible way.
The best property developers and builders come up with a vision and an understanding of future trends, and then produce a cost-competitive product that satisfies the market.
Developing a vision and a way to predict future trends is a big part of being successful. It’s also important to plan well in advance so you have the right product at the right time.
Developers in Mexico don’t just rely on trial and error to succeed. Instead, they stay informed and understand how the market works.
They’re able to see which properties they should buy, sell, or rent based on how the market is doing.
In order to create the right product, you need to know how the market works.
2. Buying the wrong property for development
Buying the wrong property for development can be a costly decision on your part in Mexico.
If you buy a plot for property development in Mexico, there are several important things to consider before sealing the deal.
As a property developer, never get too excited about an opportunity and don’t buy a property just because you want it. You must be objective and do your research.
Don’t let your emotions cloud your judgment when buying property.
When it comes to property development, patience is key. If you’re not patient, you risk losing out.
If you can’t find a property that fits your criteria, keep looking and keep your options open.
Consider all of the costs that go into maintaining your property, including maintenance, taxes etc.
Consider buying when real estate prices are reasonable and the potential is high. It’s true that the price you’ll pay may not be ideal, but it will still be less than if you buy in a booming market.
A property developer who purchases the incorrect property will be stuck with an illiquid asset that takes a long time to sell. Additionally, a developer should ensure that he/she has a diversified portfolio and adequate cash reserves for a prolonged downturn.
Market knowledge in Mexico plays a big role in property investment. This means you should always consult the market prices of comparable properties in the area when making a decision to invest.
3. Trying to sell your property alone
Some people think they can develop and sell their own property, but it’s hard to compete with the big companies.
As a first-time developer in Mexico, it can be even harder as you do not know the ins and outs of selling property in Mexico.
One of the worst mistakes property developers make is trying to save money by doing all the work themselves.
Some developers try to sell their own properties, but it’s far more effective to spend your time building new developments instead of selling properties.
Developing and then trying to sell your property by yourself is a lot of work that you could be saving yourself by partnering with a real estate sales agency.
Trying to develop and sell your property by yourself will make it difficult for you to obtain financing and/or obtain a good price for your property as lenders want to feel secure that their money will be returned.
Thats why part of your plan must involve the sales of your property and its best to partner with experts who do this day in and day out.
Click here to contact us to talk about partnering together to help you get your properties SOLD. So you can think about your next development in Mexico.
4. Seeking little to no advice
A study recently revealed that many property developers are purchasing land in Mexico without seeking advice from experts.
If you are not familiar with the local property laws, it would be a good idea to seek advice from experts.
Don’t rely on advice from people who don’t know the area well. Get advice from people who live in Mexico and have experience investing in property there.
It’s easy to underestimate the risks of developing property to Mexico.
It’s important to find a company that has a deep understanding of the local market and who is able to help you achieve your goals of developing in Mexico.
Not talking to lawyers, architects, real estate agents and contractors in advance is another way to make costly mistakes in the future.
If you would like advice on the real estate market in Riviera Maya Mexico as a property developer then – Click here to contact us today.
5. No Marketing and Promotions strategy
One big mistake property developers make is not having a marketing and promotions strategy for sales of their property.
The problem with not having a marketing and promotions strategy for sales is that you may be missing out on a lot of potential buyers. This means missing out on precious sales.
You need to have a clear plan for promoting your property in Mexico.
If you don’t have a marketing strategy, you’ll struggle to sell your property. In fact, it’s common for developers to have a hard time simply selling all the units in a development.
When you partner with a real estate agency, they will provide potential clients as well as ensure that you have a highly visible outreach campaign.
Partnering with a real estate agency to sell your property will help you get the best possible price for it.
Frankly, a lot of local real estate agents in Mexico don’t have a clue about marketing their partner’s properties.
That’s why it’s important that you partner with a real estate agency that knows how to do it well and has the local experience you need to guarantee you get your properties sold.