Investing in Tulum Mexico
CA · Member since 2018 · 124 posts · 33 votes
Im considering investing i na new construction condo in Tulum or other outlying areas or possibly a home.. Does anyone have any experience with Tulum? I wanted to buy as a second home and use it as a vacation and on the months Im not there use it a an AirBnB. Not sure what the condos rules are regarding that? Being that its in mexico, it seems that everything is laxed compared to US. Any advice, suggestions, referrals to agents or lenders would be appreciated.
@Mike Lambert Did you end up investing in Tulum? I'm considering myself and would love to hear any experiences/knowledge you'd be willing to share.
I understand if you felt attacked by my comment. I agree to let us maintain respectful and constructive attitudes in all forum exchanges.
I thought your comment to @Edgar DeLeon: "The era of building and selling anything in Tulum is over" was a very extreme statement and didn’t account for the nuances of the situation.
There is rarely an absolute truth in investing, we should be cautious with our opinions as they are just that, opinions, we don’t have a crystal ball and cannot predict the future with 100% accuracy.
The pandemic has certainly thrown a curveball in the real estate market, and it has been difficult to predict its long-term effects.
I appreciate your suggestion to focus on the substance of our conversation and have a healthy debate while respecting each other's opinions.
Investing involves some degree of speculation, but we should try to base our decisions on solid data and analysis, this is a big challenge in the real estate market, especially in a place like Tulum where data can be scarce and unreliable.
Allow me to share my thoughts regarding some of the points you have made:
FUTURE PROJECTS & DEMAND:
The irony of the situation is that you qualified a statement I made as very extreme and, in your reply, you pretty much wrote the same as what I meant, using difference words, I imagine that this is because you misunderstood what I wrote as being negative even though it wasn't meant to be. Everybody will understand that you defend your market as a realtor but, with that statement, I wasn't even being negative about it.
Let's put our statements side by side.
I wrote "The era of building and selling anything in Tulum is over".
You wrote "However there are so many reasons why Tulum will keep growing, maybe not at the surreal pace it grew the past years, however it will continue to grow."
Basically what I meant is pretty much similar to what you wrote in the underlined part. The only difference is that you use the term "maybe" and I didn't but then you used the term "surreal" so you' seem to be hinting at the fact that it's probably not going to last.
I could comment on what you wrote but the reality is I don't have a crystal bowl. Recognizing this, the way I look at the situation is pretty simple. The Riviera Maya has been built following the "build it and they'll come" model. While it's risky, the Mexican government has been a master at it and we know the result. The problem is, as they continue to build more and more, a growing number of visitors isn't enough. You pretty much need exponential visitor growth. This is actually what Tulum got up to the pandemic.
From what I could see with my own eyes, what I was told and what I read, things recently drastically changed and the exponential growth seems to have stopped and, worse, the number of visitors seems to have dropped. Will the train or they airport save the day? I'm not sure they address the root cause of Tulum's recent problems. We're waiting for the statistics but, with all the supply coming up, the market can ill-afford any drop in demand in my opinion.
There are other locations in Mexico that have been in almost uninterrupted growth for decades as that growth was build on substance with supply following demand and not the other way around and that's still continuing. Will Tulum follow in those footsteps? Time will tell but it might end up being the victim of having been too much overhyped by social media.
Like you concluded, when it comes to investing, it's all about risk and return. I'm waiting to see the facts and figures and, if they're not good, I think you can find higher returns with less risk elsewhere. And, don't worry if you love Mexico. You don't have to leave the country to find that.
@Michelle Reshel I own several properties in Tulum and also manage a portfolio of vacation rentals there (my properties included). There are some great opportunities in Tulum. Also some risks. It's important to think carefully about (1) the type of property, (2) the developer, and (3) location. There's a lot of supply on the market so one really needs to stand out on Airbnb to be successful. A lot of competition. And certain properties work better than others. Hope this helps and happy to answer any specific questions you have!
Hi, I am seriously considering buying a plot of land in region 11 (RETORNO SAN JOSE). My plan is to build a 4bedroom villa. Given the increase in supply, do you believe this type of property will stand out compared to others? The plot of land will cost 70-80 USD and the villa may cost between 350-400K to build. What are you thouhts abt these numbers? I obtained these numbers from real estate agency in Tulum
Hello @Jonathan E Francois
You are on the right path if you're considering investing in a 4-bedroom villa in Tulum, Mexico, however, it's important to take location into account. While owning a property on the other side of the highway in Retorno San Jose or Riviera Tulum may seem appealing, it's not the best idea. You'll be far from the beach, and with the increase in supply in Tulum, it's all about location now.
Instead, I suggest focusing on being as close to the beach as possible or facing the Tulum National Archeological Park (Jaguar Park). Investing in a lot on the other side of the highway will put you 7 km away from the beach (a 20-minute drive), which may not be worth the investment unless the property is unique and low-cost. Plus, there are already 4 bedroom villas generating income for a lower price point in a way better location.
Building in Tulum can be a challenge, so you'll need to find a good contractor, I recommend being onsite supervising everything if you want the project to come out in the right delivery times and qualities. (If you go that route we have worked with a couple of good builders and can share the contact info) That said, there are other locations where you can get a 4-bedroom villa for less or a similar price point.
For example, the Tulum National Archeological Park is a project that just got announced (Parque del Jaguar) is a federal park with 1,000 federal protected hectares (2471.05 acres) (just to give you an idea Central Park in NYC is only 843 acres), it will have jogging and bike trails with views to the Caribbean, ancient Mayan ruins, 7 new beach accesses, a pier for boats in front of the lighthouse of the park, plant nurseries, viewpoints, butterfly farms, and cenotes. This is HUGE for Tulum! Here is a video it's in Spanish but you can turn on English subtitles:
Alternatively, the Veleta or Region 15 or R8 is the trendiest local spot, with cool bars, restaurants, and shops on 7 sur street. Region 8 is the closest area to the beach you can invest in, and it will make a big difference in your investment and your resale/exit strategy if you ever want to sell. So, my suggestion is to keep these locations in mind when considering investing in a 4-bedroom villa in Tulum.
There are other premium locations but the price point can be slightly higher for a 4BD villa.
Hope this info helps!
Does anyone know about a company or person with experience that can help me managing an apartment in Tulum ?
thank you
Does anyone know about a company or person with experience that can help me managing an apartment in Tulum ?
thank you
Hola Juan Carlos - My company Nocturna Rentals can help with this depending on the property size. We typically only take on properties with 3+ bedrooms. Please feel free to send me a message if you'd like to discuss! Happy to help if we can.