6 Reasons for Owning Vacation Rentals in Tulum Mexico

Buying a vacation rental in Tulum Mexico is a great investment. You can earn money through rental income while having a place you can get away and stay in whenever you feel the urge.

Wondering if owning vacation rentals in Tulum Mexico is for you? This article will outline the investment opportunities of owning vacation rentals in Tulum Mexico, from rental income and tax breaks to how exciting it is to own a piece of paradise.

Here are 6 Reasons for owning a vacation rental in Tulum Mexico:

1. Booming vacation rental market

The vacation rental market is booming – internationally, with the rise of companies like Airbnb and VRBO.

You’ve likely heard of Airbnb. If you travel much, you might even be a customer. This company has grown exponentially in the past decade. In fact, according to TechCrunch, it’s valued at $31 billion as of September 2018. From 2008 to 2017 alone, Airbnb bookings have jumped 466%.

If this trend isn’t reason enough to invest in Tulum real estate for rent now, consider this: Mexico is also experiencing a boom in its vacation rental market!

2. Low comparative expenses

It is the low cost of living that attracts so many tourists to the Tulum area each year. Food, drinks, and housing are much more affordable than in most other places.

This means you can offer much better value for your guests without having to put in exorbitant rates.

The good thing with Tulum homes is that they are quite affordable–even luxury ones–when compared to other vacation homes abroad.

A beach-front luxury home in Tulum may cost less than $200 per night while the same type of property in Miami might go for close to $1000 a night.

Besides buying at a good price, you’ll be paying lower costs for property management services as well as property taxes and insurance.

One of the main reasons why foreigners are choosing Mexico as a destination to invest in is because they can get a lot of value for their money.

The cost of living in Mexico is relatively low, so you can get all kinds of things at affordable prices: from food and utilities to vacation homes.

Add that up with the fact that many property management services are very inexpensive and the property taxes are low, you’ll find that your expenses will be substantially lower than if you were to rent out an investment home in your own country.

3. High rent to value ratio

It’s an attractive buy in terms of your return on investment!
Tulum is one of the top destinations in the world with an average daily rate (ADR) as high as $560 USD, which is much higher than other vacation rentals in Mexico.
With Tulum’s rent to value ratio being the highest in Mexico, you can potentially earn back your purchase price in just 4 to 6 years.

Imagine, if you have a 2 bedroom apartment that rents for $500 per night and it’s rented out 180 days a year, you will earn $90,000 per year or your property’s value every four years. If you have a 3 bedroom apartment that rents for $1,100 a night and it’s rented out 240 days a year, you earn over $262,000 per year or your property purchase price every four years.

4. Excellent property appreciation

Tulum is an up-and-coming market and there will be significant appreciation of your property’s value over the coming years. Purchasing a vacation rental property in Tulum is a great way to diversify your portfolio as real estate investment can be a hedge against inflation.

The Mexican government has recently invested $250,000,000 USD into infrastructure in Tulum. This is expected to help the market grow even further, creating excellent conditions for property owners to see their returns on investment increase even more.

In Tulum, investors have seen their property values grow by as much as 9% or more per year so it is not surprising that this town has been labeled by Forbes magazine as one of the best places to invest in properties right now.

5. Collect high vacation rental returns

Owning a home in Tulum can be an excellent way to earn passive income. Tulum’s popularity ensures that rentals are always in high demand. Because of this, vacation rental returns tend to be quite high. There are several websites that can help you calculate your property’s estimated nightly rate with the click of a few buttons. As a result, it’s easy to see how much money your investment could make before even purchasing it.

Click here to visit Airdna which can help you find out the rental value of properties in Tulum Mexico.

6. Visit with family and friends

You and your family can use the villa as often as you like. You could potentially live there full-time or part-time, rent out your primary home while you are in Mexico, and invest the money that you earn into other properties. Because of the low cost of living in Tulum, it would be easy to supplement your income with something like an Airbnb on the side.

Hosting friends and family is something that is difficult to do when renting a hotel room because everything ends up getting pretty cramped. The best thing about renting a vacation home is that there is enough room for everyone to be comfortable and after everyone has gone to bed, you’ll still have all of the space that you need to relax quietly.

Summary

Owning vacation rentals in Tulum can be a great way for investors to maximize their return on investment. The ROI is excellent, the tourism numbers are high, and the return on investment (ROI) is high.

In order to buy a property are a great price and capitalize on Tulum’s growing vacation rental market you should buy this year.

Click here to contact our qualified real estate agents in Tulum Mexico today.

Are you interested in receiving the best listings in Riviera Maya Mexico? Click the links below:

Get the 10 Best Tulum Vacation Homes (to Rent Out) on Sale Now

Mexico Vacation & Investment Property for Sale

10 Best Tulum Condos for Sale Under $150k

10 Best Tulum Condos for Sale Now Under $300k

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Click here to read more about buying property in Mexico as a non-Mexican.