Condo vs. Custom build in Tulum?

Question

Hi,

Newbie here. Long time lurker, but first time post. Looking at investing in Tulum for both STR and as a vacation home for my family. Any thoughts/tips/advice on whether buying a condo vs. building a custom home is a better option in that area? Building seems appealing due to more privacy, and potentially a better deal (??). Then again, a condo is likely to have other amenities appealing to STR guests.

Thanks!

Quinn Olivarez · Answer

My wife and I have been going to tulum for the last 5 years or so and I gotta say, it seems like a terrible investment at this point for small timers looking to get a property or two. The prices are crazy for what you get, and the saturation is real. The amount of new condo builds since 2016 is staggering. There is very little opportunity to differentiate yourself in that space IMO, let alone as a new STR host. I worked for a Houston based real estate brokerage for a while that was pushing tulum condos, and tbh that lead to me eventually losing faith in the vision of the company and leaving for a different brokerage. The value just isn’t there, from pretty much any angle you look at it.

On the independent property side of things, there is much more risk when it comes to maintaining the property, plus, average tulum visitors will probably see the features of the condo stay more inviting, thus creating a ceiling for growth. An independent spot is going to need security and privacy, water features, outdoor space to be competitive with the condos. Maintenance and cap ex could be brutal, and building a team to rep your interests on the ground could prove to be more challenging.

best of luck to you!