My wife and I are considering the purchase of two condos (next to each other, to do a lock off) for vacation rentals in Playa del Carmen, it's a pre-sell so we have a better price now, compared to when they're finished and we have a number of questions:
1. We will be purchasing two one-bedroom units that have a lock off between the units. Both units can sleep up to four people and if you combined the two they can sleep up to eight. We have the option of buying the units on the second floor or fifth floor. Currently, the fifth floor unit will have a moderate view of the ocean. But there is the potential of another developer building in front that may block the view. The price total difference to be on the top floor is approximately $40,000 (for both units). They have the same layouts and the same square footage. Is there a greater advantage with a higher floor unit if the view is blocked as opposed to a lower floor unit?
Also, from a marketability point, is the higher floor more desirable than a lower floor from a vacationer's point of view? (One elevator, 46 condos)
And lastly, would you/they be willing to pay more to be on a higher floor on a nightly basis?
2. Is someone familiar with the closing cost in Mexico, specifically Cancun?
3. What are potential red flags with the developer? How much room for negotiation is there?
4. Does anyone know of any lenders in the US who lend for these projects?
Any advise is greatly appreciated!
Good questions. Ask yourself, as a guest, would you pay a surcharge to be higher up with a view? Or without a view? Is it worth the $40,000 cost to you to recapture any price differential? Too risky, even if it was worth it to you, given the potential to level the playing field with views.
I’d walk up a flight but probably not 5. At the end of the day, if you were staying there, would you personally want the view ( of the same ocean) you’d see when you are lounging at the beach all day long?
I did some exploring of real estate in Mexico a couple of years ago - and I learned the laws governing real estate there are quite different than the U.S.! A very informative website is mexperience.com. Be sure you do your research regarding all the pros/cons and things to be aware of before you commit.
Regarding your specific questions, I don't think you'll get enough of a benefit from a higher floor to justify the additional cost. Personally, unless there was a view, I wouldn't care a bit which floor I was on for a vacation rental, especially when it's a difference between 2 and 5 (and I agree that lower = better for access via stairs, if there's only one elevator).
I don't believe there are U.S. lenders who will finance Mexican property, though you may be able to get financing through the developer.
I have no experience with condo developments or pre-sales so I'm afraid I can't comment there.
Good luck with your investment!
35 years ago I read some advice about staying in a resort or hotel. Stay between the 3rd and 5th floors. 3rd floor and above keeps you out of the line of random street gunfire. 5th floor and lower keeps you in the range of a ladder truck in the event of a fire.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing