The Smart Way to Invest in Mexico Real Estate
People buy property in Mexico, buy as an investment. This can be for their own personal use and as an investment.
Buying a rental property in Mexico as an investment to hold and sell is an excellent investment.
But is Mexico property a reliable investment that appreciates in value? And how does investing in Mexico differ from your country?
What happens to the value of your property in Mexico? And what is a smart investment when buying a property in Mexico? We answer everything in this article.
Mexico Property that almost always appreciates in value
With appreciating property in Mexico, there are two types that are very reliable.
1) Beachfront Property
2) Mexican Land.
Why? It’s about supply and demand. Both are in high demand and both are in limited supply. However, where you buy is very important. But either of these types of properties of property is an excellent investment.
Beachfront property in Mexico
There is a limited supply of “beachfront property” in Mexico and throughout the world. Of course, this makes it well sought after.
That’s why beachfront land and houses very rarely lose value here in the Riviera Maya Mexico. And there is not that much available to investors.
As an example: Playa Del Carmen has only a small amount of houses on the beach (found in the Playacar Phase 1 zone).In fact, most beachfront property in the Riviera Maya hotels and resorts occupy.
However, condos with great beach views and are in fact beachfront. These condos are wonderful investments. They always attract renters and hold their value because they are beachfront.
Property on the beach has by far the best potential as an investment. But don’t overlook buying a beachfront condo such as in Mareazul as they are a fantastic investment right now.
Where to Buy Beachfront Property in Riviera Maya Mexico
There are few places you can buy beachfront land or houses in the Riviera Maya. They are in exclusive private areas and are of a premium price.
In only a few years, beachfront land and homes have drastically risen. Because of demand, foreigners investment and the growing popularity of the area.
Buying land in Riviera Maya Mexico
Beachfront Riviera Maya land is very scarce because there is a limited supply available on the market. But it’s a little more challenging for foreigners wanting to invest in Mexican land. Why?
Because not all land in Mexico has a property title. This land is ejido.
What is ejido land?
In many areas of Mexico, there is land set aside as communal land and overseen by communities.
People are allowed to occupy and live on this land. But they are not allowed to sell it outside of the community, as it basically belongs to the community and not one person.
Mistakenly buying ejido land can happen and its terrible news for you as a foreigner.
So it’s important you seek advice from a Real advisor who can show you verified properties and can check the land you are looking to buy.
Tip: Check for property title and land agreements to avoid buying the wrong land. Work with a Real estate advisor who can show you verified properties with property titles and help you understand land agreements for ejido land.
We help you find and purchase your property in Riviera Maya Mexico.
Does most land in Riviera Maya Mexico have a property title?
Most towns and cities in Riviera Maya have plots of land that are titled. Though there are many rural lands that are ejido and not available for buying.
Tip: If you are closing on a property, it’s important to seek expert advice on this matter.
The fact that much of Mexico’s land is Ejido land makes titled land even more limited and valuable.
If you are looking into buying land, it is always best to check that all it’s paperwork is correct. This ensures you will have a clear property title and safe ownership.
Most realtors do not have a legal representative who can ensure safe property buying. Many foreigners buying a property in Riviera Maya Mexico must seek their own real estate lawyer.
However, we have a Real Estate legal advisor on our team who is a qualified lawyer that specially helps you every step of the way.
And our real estate agents work together with you, only advising you land that has been verified to have a clear property title.
What land investments are profitable in Riviera Maya?
Here are 2 places in Riviera Maya that have proven to be great investment opportunities for you.
Buying land in Playa Del Carmen
Buying land in and around central Playa del Carmen can be a good investment. Especially when you buy in a location where future developments are coming.
Not all land is going to be in a good location for buying. But some good land purchases have been in Playa Del Carmen where there once was a house. The lot can be cleared and a three or four story condo built.
Tip: Chat with our advisors and real estate agents as they advise you on which areas are developing in Playa del Carmen.
Once you know the direction the developments are moving you will know where to invest.
For example: Playa Del Carmen has been moving northward over the past few years. You may have noticed many developments between 5th Avenue and 30th Avenue from 34th to CTM Avenue.
Many of the small houses and lands have been sold and replaced by condo buildings that maximize your investment potential.
Buying land in Tulum
You may have noticed a real recent boom in the Tulum property market. Tulum’s popularity is growing incredibly every year.
In the early 2000’s, people began buying land in Tulum at a rapid rate. Many big investors bought massive amounts of land in Tulum. This is called land banking.
Though at the time it was more like a bet. Those who bought sizeable amounts of land were banking on Tulum growing and the value of land rising.
Over time this has proven to be a good bet. Land in Tulum has doubled, tripled, and even quadrupled in a small amount of time.
We suggest buying land in a developing area of Tulum as it’s a good way to have an investment that will appreciate in value quickly.
A quick tip: If you want to buy land to build a house, or to hold on to it as an investment, it is best to do so though a trust real estate agent or advisor.
It is very difficult to shop for land online by yourself. You will see many posts for lots in development and by independent owners. However the information online could be inaccurate.
Land purchases need to be properly checked due to many factors in Mexico to be sure you are getting a clear title.
Also sometimes family-owned land has disputes or difficulties getting all the signatures and approvals. This is something you will want to know early rather than later.
How to get a quick property appreciation
There is another type of property that can leapfrog in value fast. This is buying presale condos.
You can expect a 10% to 20% appreciation on your property when the property is delivered.
Ask us today for a list of presale properties in Tulum and Playa del Carmen.
There is another type of presale which has an even better deal than the normal presales. These are often at the very first public announcement of a project. These are pre presales and are generally offered to friends and family. This is where the first few units are reserved. These can even be the best ones. From the time the project breaks ground to the start of public sales, many of the units have appreciated in value. This can mean that the market value of your investment can go up a further 10-15%.
Property appreciation in Mexico Compared to Other Countries
In many places around the world there is a steady and gradual increase in value of real estate investment. As an example: In the United States it’s somewhere between 3% and 5% yearly gains. Of course this varies depending on individual areas and how value is calculated. There can also be downturns in the market. So does Mexico Real Estate differ?
Is Mexico affected by Real estate bubbles?
In Mexico is there are no price swings in the real estate market as it’s mainly a cash market. So there are no real bubbles that form and burst like many other markets in the world. Though there are factors that can affect the strength of the rental market income. But no wide price swings.
Fees and cost of buying property for investors
There are the traditional closing costs like anywhere, but there are also bank trust fees (fidecomisco). Since investments in Riviera Maya are within 50 kilometers from the coast in Mexico, a special bank trust is needed to be set up. When buying a property and flipping you will need to calculate this cost into the equation. It’s why most investors buy and hold properties longer.
The value of investment properties in Mexico
Many investors look at the ROI (return on investment) in the form of rental income. Though it can come from the appreciation value of the property and sale to get a great return. ROI is advertized on most real estate in the Riviera Maya.
Most people want a condo to rent out most of the year and then come visit from time to time. Rental income is a great way to get a healthy ROI on your investment.
The truth is ROI is not everything and many people don’t focus on it. For many real estate is a passion and a great lifestyle. That’s why if you are going to be living in your property or visit for part of the year, you should love your place and have a passion for Riviera Maya Mexico.
Having a space and location you love here in Riviera Maya will give you the dream lifestyle you want. This is worth a lot more than making money. As the quality of life in Mexico can add a lot of value to your life as it does for many people.