I'm new to Real Estate Investing but have always being attracted by the idea of cash flow, and passive income. I'm currently thinking on investing on rental properties in Puerto Vallarta, Mexico. This would be my first time investing. I looked at the prices of properties being and property taxes being lower than in the US. I'd like to see if anyone has any advice as to what kind of property would be best to invest on, what area of town and how much cash you could pull out of a vacation rental in average. I'll be traveling there soon to check it out myself, but I've read good things so far and it looks a good business. Thanks!
I don't know anything about invest overseas but I recommend you looking at the law. I though I read somewhere that the land couldn't be "bought" buy foreigners but only a 99 year lease. Or something to that throughout.
Thanks for your reply. I've done some research and is my understanding foreigners could buy through a bank trust. Also, my wife is Mexican/ US citizen, so worst-case scenario she would buy the property under her name. Thanks for the info though
My BIL has owned a home on the shores of Puerto Penasco (aka Rocky Point) for 20 odd years on a 99 year lease. But pricing is stagnant as newer properties are selling low & it has been difficult keeping corrupt individuals off the board running the association & stripping the treasury.
But they do enjoy using it constantly, regardless of the 3-4 hour daylight only drive from Phoenix.
The last time we were there a case of Corona was $9, pitchers of margaritas at at happy hour was $1 & it was still SAFE.
Love it there but would only use a small portion of net worth. The corruption is a fact of life down there.
Knew an American that was building in Sayulita and running it like a motel. He was doing great but like most businesses down there not paying any taxes; another fact of life. Not my comfort level.
Puerto Vallarta is an excellent option to invest in real estate.
Being a favorite resort destination in North America over two million people visit this beautiful city every year.
Like in any other real estate option, location is very important. Most people visiting PV look to be close to popular amenities such as restaurants, shopping, beach, etc… so getting familiar with the different areas in the bay is very recommended.
Some people investing in Puerto Vallarta shy away from becoming a part of the productive circle in Mexican society and do not pay taxes. This seems attractive but I strongly advice against it.
Mexican laws have been updated in the last few years and make it easier and very practical to become an active tax payer.
There are several factors that you'll have to take into account when choosing a rental property, such as HOA monthly dues; income taxes, property management, utilities.
Due to the late world financial crises many financing options are not available for a second home in Mexico, therefore securing a loan or line of credit in the US may be a better option for you.
When you finally decide to start looking for the “one”; a real estate professional is the best way to proceed. The professional will familiarize you with the different areas and will help you maximize your investment by finding the right property at the right price and the right location that will have the potential to generate the return you want.
Best of luck in your search!
Nos vemos en Vallarta!!!
@Pat L. @Jeff S. Thank you both for your reply. I've heard of Puerto Penasco, however the reason I am interested in Puerto Vallarta is because I'm looking to move there sometime in the short future. I know a little bit about corruption myself, I was born and raised in Chile, but I prefer honest business as well.
@Luis Daniel Duran Sanchez Thanks for your reply and all the information. Are you from Vallarta yourself? I will be traveling next week to check it out. is there any good company or investor-friendly real estate agent you'd recommend there?
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No dealmaking in this forum please. That must be done in the Marketplace.
I was in Puerto Vallarta, about a month ago and will be going back next week. If you find that Puerto Vallarta is too expensive or the numbers don't work you may want to check out an area about 20 minutes away called Sayulita. It has a great downtown area with many restaurants and resorts and of course the beach. A friend just finished building a 12 unit resort hotel and has it booked for most of the season. Another area is La Penita which is about 45 minutes from Puerto Vallarta which has much lower price points but it is also not as nice. With that said I met many Canadians who were renting 3 to 4 months at a time but I don't know if the units are vacant or rented during summer months.
Good luck and let us know what you find. I am also thinking about how I can do real estate in Mexico.
I purchased a condo in Puerto Vallarta. I am planning to have the money from AirBnB deposited into my US bank account as opposed to my Mexican bank account. Any pros/cons to this approach?
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