Buying a vacation home as a short-term rental is one of the most exciting types of real estate investment, but it’s also a serious financial decision that requires careful consideration.
What are short-term rentals in Mexico?
Short-term rentals are properties that are rented for less than six months.
These rentals tend to be for 30 days or less, but can be rented for as little as a week.
Short-term rentals are sometimes referred to as vacation rentals because they are typically furnished and include amenities like WiFi, TV, kitchen appliances, and other amenities.
Why short-term rentals are so desirable in Mexico?
The reasons why short-term rentals are so desirable in Mexico are numerous and varied.
For example, there are over 120 million tourists that visit Mexico annually. This number keeps rising every year due to the country’s ability to provide both a great climate and an abundance of diverse landscapes, which makes it a popular tourist destination for people all around the world.
There are also many things to do in Mexico beyond just visiting one of its famous beach resorts like Playa del Carmen or Tulum.
Tourists can also go hiking through jungle forests or take part in a wide range of activities throughout the country.
In addition, Mexican history is rich with fascinating stories about ancient civilizations such as the Mayans who built pyramids hundreds of years ago.
Short-term rentals in Mexicos tourist cities such as Playa del Carmen and Tulum are popular and profitable as a business.
What is short-term rental investing in Mexico and how does it work?
Short-term rental investing is a way to earn money from owning a property by renting it out.
There are many different ways to invest in short-term rentals, from buying an entire home or condo and renting it out on Airbnb, to buying part of a shared property (called Fractional Ownership Unit) that’s managed like a hotel.
Short-term rentals can also be used as vacation homes or as income properties that help pay for themselves.
The key thing is finding the right place at the right price and doing your research ahead of time to make sure you know what you’re getting into before investing in this type of property.
An overview of Riviera Maya Short-term Rental Market.
As you may have noticed, most of the short-term rentals in Mexico are located in Riviera Maya.
The region offers a wide selection of properties and it’s possible to find everything from small studios to large villas with pools.
It is also worth mentioning that there are many different types of short-term rentals: from condos located in town centers to more secluded villas located on the beach.
Riviera Maya has become one of the most popular destinations for real estate buyers around the world due to its proximity to Cancun airport (less than an hour drive), access to Mayan ruins, and an abundance of restaurants and bars.
The best locations include Playacar Phase 1 or Phase 2; Tulum; Akumal; Puerto Aventuras; Playa del Carmen; and Puerto Morelos.
How to finance a short-term rental property purchase in Mexico?
As you may be aware, the restrictions on financing are a lot more stringent in Mexico than in other countries. This can make it difficult for foreign buyers, especially those who do not have a credit history or have limited assets.
The best way to finance your short-term rental property purchase in Mexico is by using cash or cash-out refinancing (COR) where you get the money out of the current home loan without having to sell your existing property at all.
Another option is using bridge financing (developer financing) while waiting for construction completion and before taking over possession which can be from a couple of months up to 2 years depending on the projects.
How much money you can get from your Mexican short-term rental property annually?
The amount of money you can make from your Mexican short-term rental property also depends on the location of your house.
Properties that are located closer to the beach tend to earn more money than those that are farther away.
For example, Tulum and Playa del Carmen collect some of the highest earnings every year because they’re close enough to enjoy all day but far enough out so as not to be uncomfortably crowded by tourists or other properties nearby.
What should I look for in a short-term rental property in Mexico?
A few things to look out for are:
- Location, location, location! The property should be situated in a highly desirable area for tourists such as Tulum and Playa del Carmen.
- Property condition. Building new or preconstruction is usually a better option for most people. This way there are no surprises with structural issues and/or mold damage on older homes that haven’t been well-maintained over time.
- Property amenities such as pools/jacuzzis/spas etc which come standard with newer developments make things easier too if anything breaks down during your stay there – they can easily be fixed by qualified personnel rather than having to wait weeks or even months just so someone could come to fix it themselves.
For most people, buying a vacation home as a short-term rental is one of the most exciting types of real estate investment, but it’s also a serious financial decision that requires careful consideration.
Buying a short-term rental in Mexico is one of the most exciting types of real estate investment, but it’s also a serious financial decision that requires careful consideration.
To help you get started, we have a team of real estate agents who specialize in Short-term rentals in Riviera Maya Mexico (Mexico’s top short-term rental location).
Conclusion
Short-term rental properties are a popular investment in Mexico, both for people looking to make money and those just wanting an affordable vacation home.
Short-term rentals have been booming throughout the country for several years now, but especially in the last few months.
Despite this growth, there are still many misconceptions about what it takes to make money with a short-term rental property.
In fact, there’s no need to be an expert on this topic before you start investing!
Would you like to learn more about buying a short-term rental in Riviera Maya Mexico? Click here to contact our real estate agents at no obligation and at no cost.
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