Mexico, where in mexico to start investing in realstate
Member since 2024 · 3 posts · 1 vote
I am in Mexico city now for 3 months as we relocated from houston. Looking to invest in the realstate market. Been researching for long time before the move. Mexico City, Tulum, Merida and Puerto Vallarta are in my list however I do not know which one would be the best to:
Buy and flip, buy and rent or buy and Arnb?
What price market should I stay under knowing that Mexico City and Puerto Vallarta are the highest market now?
Finaly, what areas in the best city should I look in.
thank you for your inputs.
Hi Fawaz. I hope you're doing great.
As a licensed real estate broker in Tulum, I would like to share my opinion on this area with you. If you're planning to invest less than $400-500k USD, the properties you could find within that budget will not stand out in the market, and you'll face high competition in the STR (Short-Term Rental) market. Unfortunately, in recent years, Tulum has been overbuilt in the small properties segment, leading to a huge supply of them. If you are looking to invest over $500k, you might be able to find more unique properties with less competition.
Due to the current market conditions, many owners are deciding to sell, so today it is possible to find properties at great prices. However, it is not easy, as there is no MLS, and most people in this industry will try to sell preconstruction properties at any price.
I hope you find this information useful!
Hi Fawaz, it's always difficult to answer this kind of questions because we don't know what your objectives are and that would be the most important factor. So I'm going g to try to answer as best as possible by staying general.
Firstly though, it's important to understand that you can't apply all that you learn on BP and all that works in the US and expect it'll give you a similar result in Mexico. Many things work differently there. One of the main things is the financing so make sure you take care of that first to avoid potentially waisting a lot of time.
Now to your questions:
Buy and flip: that generally won't work in Mexico. There are exceptions though like you could buy a dilapidated colonial house in Merida and rehab it. Not sure if you can find that easily and if that would work with numbers. Another exception would be to buy condos pre-construction and flip the contract before delivery. Bear in mind that it isn't that easy anymore given the price rises over the last few years. You'd need to buy the right property in the right location, at the right time and, most importantly, at the right conditions.
Also, a realtor in Puerto Vallarta who deals with foreign clients once told me that every single of his clients who attempted a rehab regretted it and will never do it again. That included rehab pros in the US and people who normally love rehabbing.
Personally, I'd never rent anything long term. I don't think it's very profitable and even less given the risk.
That would leave you with the classic that most foreign investors do: short-term rentals. To determine the location, you just need to find out where you can get the returns you're looking for. Like everywhere else, investing is first and foremost about numbers.
While you generally don't run the regulatory risk like you would in the US, Mexico City might be the exception and I would stay away.
Tulum is being completely overbuilt so I'm not sure how you could be profitable long term there.
Merida doesn't have all year-round mass tourism buy maybe focusing on a niche could work.
Puerto Vallarta is great but it's become much pricier lately so you might need to find a deal if you want a decent return.
Hope this helps!
Hi Fawaz. I hope you're doing great.
As a licensed real estate broker in Tulum, I would like to share my opinion on this area with you. If you're planning to invest less than $400-500k USD, the properties you could find within that budget will not stand out in the market, and you'll face high competition in the STR (Short-Term Rental) market. Unfortunately, in recent years, Tulum has been overbuilt in the small properties segment, leading to a huge supply of them. If you are looking to invest over $500k, you might be able to find more unique properties with less competition.
Due to the current market conditions, many owners are deciding to sell, so today it is possible to find properties at great prices. However, it is not easy, as there is no MLS, and most people in this industry will try to sell preconstruction properties at any price.
I hope you find this information useful!
Hi Fawaz. I hope you're doing great.
As a licensed real estate broker in Tulum, I would like to share my opinion on this area with you. If you're planning to invest less than $400-500k USD, the properties you could find within that budget will not stand out in the market, and you'll face high competition in the STR (Short-Term Rental) market. Unfortunately, in recent years, Tulum has been overbuilt in the small properties segment, leading to a huge supply of them. If you are looking to invest over $500k, you might be able to find more unique properties with less competition.
Due to the current market conditions, many owners are deciding to sell, so today it is possible to find properties at great prices. However, it is not easy, as there is no MLS, and most people in this industry will try to sell preconstruction properties at any price.
I hope you find this information useful!
Hello Bruno and Thank you. Yes they are practically giving away these cookie cutters new construction for low prices. My strategy is not to invest in one place only, 400k Cash or less in each, looking for 4 properties, different location in Mexico .... sorry you must have heard that alot "The next Tulum" where I can go early. Is there such a Place?
Hi Fawaz. I hope you're doing great.
As a licensed real estate broker in Tulum, I would like to share my opinion on this area with you. If you're planning to invest less than $400-500k USD, the properties you could find within that budget will not stand out in the market, and you'll face high competition in the STR (Short-Term Rental) market. Unfortunately, in recent years, Tulum has been overbuilt in the small properties segment, leading to a huge supply of them. If you are looking to invest over $500k, you might be able to find more unique properties with less competition.
Due to the current market conditions, many owners are deciding to sell, so today it is possible to find properties at great prices. However, it is not easy, as there is no MLS, and most people in this industry will try to sell preconstruction properties at any price.
I hope you find this information useful!
Hello Bruno and Thank you. Yes they are practically giving away these cookie cutters new construction for low prices. My strategy is not to invest in one place only, 400k Cash or less in each, looking for 4 properties, different location in Mexico .... sorry you must have heard that alot "The next Tulum" where I can go early. Is there such a Place?
I cannot tell. Some people mention Bacalar and Mahahual. In my opinion they aren't, and there isn't another Tulum in Quintana Roo. Perhaps there is one somewhere in Mexico, but I do not know.
A few things:
1. I don't know that I'm necessarily the right person to listen to (it's in the eye of the beholder) but I'm just commenting of subjects I know, I try to give comprehensive unbiased answers whenever possible and I'm trying yo help. I'm telling people what I wish they'd tell me if I was in their shoes.
2. Kudos to you for opening a hair salon in Mexico City after being there for just 3 months.
3. I'm going to be the last person to criticize the stock market because that's my other passion, which I've been doing for 20+ years and I'm even coaching people on doing it successfully. It's like real estate. You need to invest in the right stocks, not any stock. I've been doing extremely well and the beauty is that I don't need rates to go down. But yes, sadly most retail investors don't know what they're doing and end up gambling.
4. Being in Mexico isn't mandatory if you buy a short-term rental. If you want to do anything more sophisticated, you need to be on the ground while it happens.
5. There are several issues with Tulum but the main one I was alluding do is the result of the former governor of Quintana Roo (the state in which the Riviera Maya is located: Cancun, Playa del Carmen, Tulum) gave 40,000 construction permits in a record time and there's no demand for that many housing. The end result is inevitably going to be a huge amount of properties you won't be able to sell or rent without taking losses, potentially very large. It's the typical oversupply situation but on steroids. That ship has sailed a long time ago.
6. The better the market, the harder it is to find a property because, in those markets, you have the reverse situation, in which the supply can't satisfy the demand. For example, I'm currently trying to find land for a development and, in spite of my knowledge and deep connections, it's extremely difficult.
7. A like-for-like property in Mexico is much generally cheaper than in the US but properties in great locations aren't that cheap that you can pay cash for 4 properties with $400k (unless they're minuscule) but you could use financing if you have access to it.
8. Nobody has a crystal bowl when it comes to the "next places" and, even if you find it, you don't know how long it's going to take , will you have the patience to wait and possibly be wrong? Mind you, there are signs but you can bet people in the know aren't going to share it and create a competition for themselves so you'll generally be on your own on this one.
9. There are no rules when it comes to price range, square meters and type of property. It depends on the markets and the specific properties.