Vacation Rental in Rocky Point Mexico?
Investor · Mesa, AZ · Member since 2016 · 50 posts · 7 votes
I currently live in AZ and have been to Rocky Point a few times and can see the appeal down here for a vacation rental.
Does anyone have any experience down there with what kind of ROI people get and what demand looks like throughout the year?
Looking for any insight with purchasing process owning long term and eventually maybe one day selling?
Thank you!
We have a vacation rental condo at the Princesa Resort on Sandy Beach in Puerto Penasco (Aka Rocky Point). We have owned it for a little over 3 years. The number of visitors to the area was always good but has been steadily increasing over that period.
Occupancy is very high from March 1 to July 31,and then starts to decline. Traditionally the winter months...October through February have been slow, but even that period has been increasing. Weekends in October and November seem to be doing well based on some local events, such as a big bike rally in mid November. December is still slow...maybe 20-25% occupancy. January and February are now getting interest from retired people and snowbirds that want to visit in the less busy/noisy times. We have had bookings for maybe 10 days worth in each of Jan and Feb. This year we started getting inquiries for month long stays in that period although so far most of those have wanted ridiculously low rates. And as I mentioned above, the place just goes crazy starting March 1 due to Spring Break and almost every day will be booked.
Condo prices have been rising quickly over the last few years and condos that go on the market seem to sell quickly now. Partially just because it has been “discovered” resulting in more visits...and partly because they are working on a “Home Port” cruise ship port. Construction has been going on for more than 3 years in fits and starts, but there has been some recent recommitment noises from the government which has increased confidence that it may actually get finished and cruise ships may actually visit. If that happens then activity and prices could really jump.
The major attraction is that Puerto Penasco is only about 3.5 hours (1 hour on the Mexico side) from Phoenix or Tucson and it is the closest ocean beach...closer than San Diego. So it is close enough for a weekend getaway for a pretty large population. Having said that we still see maybe 25% of our guests coming from farther away....even Canada. The highway down from Phoenix through Lukeville and Sonoyta is good, and well travelled.
The only real drawback is that while there is an airport there waiting for good sized commercial planes, there is not yet a reliable commercial schedule. Periodically a small regional airline will start flying there but so far it hasn’t stuck. Eventually I think it will though. Once there is a regular commercial flight, that will make it much more convenient for visitors from elsewhere.
No knowledge of the area, but get on AirBNB and VRBO and take a look at vacation rentals in the area. How many are there? What are they asking per night? (plug in a variety of dates to get an accurate idea) How booked up are their calendars? Etc. Then crunch some numbers. Don't forget to factor in additional expenses like utilities and supply costs. Message a bunch of self-managing owners and see if anyone's willing to talk to you about their experiences in the area.
Re: long term purchase, if you're looking for appreciation, research the area and see what the historical trends are. Most vacation rentals are more about cash flow than long-term appreciation, since they tend to be in areas more reliant on tourism than population/jobs growth.
Hi Justin,
I too have some interest in this area though I have never been. We are considering a road trip the next time I'm in Phoenix to check it out. I do have a bit of concern over what has been transpiring politically/crime in MX right now so I would make sure to take your time and research that piece right now. You might want to check-out airdna.co (not dot com) and do a little research with them. Would like to learn more about your experience during your visits if you would like to connect. I'll send you a request.
Thanks,
Mike
@Julie McCoy Thank you for your input, I still have a lot of research to do and ask people who have homes down there what that look like for them. I am not overly worried about appreciation but more focused on the cash flow for the time being.
@Michael Greenberg I will reach out and we can connect. Looking forward to it!
Crime wise, I haven't ran into many issues during my visits. The town is mostly ran off of tourism so any bad PR really hurts them. I have talked to some residents and they said that there isn't more crime compared to their home in Tucson. Which for empirical data really doesn't mean squat but they did feel safe enough to buy a condo down there...
I'm in agreement with @Michael Greenberg about the politics and crime in Mexico. What's the worst that could happen? You could end up like Mussolini after WW2 and the Mexican government takes your property away from your heirs. But don't let that discourage you.
Take airdna.co data with a whole shaker of salt - it can be useful for seeing patterns in the area, but their numbers re: nightly rates, occupancy % etc. are not at all reliable.
I second @Julie McCoy. There is a lot of information that you can find out from searching current listings in Airbnb and VRBO. I would be very leery of a property in MX due to the reasons stated above. That's just my level of risk tolerance though. If you have a higher risk tolerance, go for it!
LOL somehow I missed in the thread title that Rocky Point is in Mexico...
Purchasing land in Mexico is very different from purchasing in the U.S. If you decide to pursue this further, I recommend doing a good deal of research on the process - there's a very good website called Mexperience that will give you a quite thorough overview of the process.
@Julie McCoy My day job actually has a lot to do with data and data acquisition/decimation. I was curious about the validity of their stats. I plan on doing more research via AirBnB in addition to VRBO to see what the prices really look like. What has led to you believe that their data is significantly skewed and was it the paid version you have worked with in the past?
That Mexperience page looks very informative. Thank you!!!
@Justin Wilcox There are multiple threads in the forum that discuss the data quality of AirDNA - I recommend doing a search and reading some to get the details of it. But bottom line is AirDNA gathers data by scraping AirBNB, which means they consider any blocked date on a calendar as "booked", and nightly rates often get skewed by the inclusion of cleaning fees.
@Julie McCoy As soon as I made my post, I realized I should of just searched it. I appropriate the summation of you combing over those threads and following up with me . Thank you!
We have a vacation rental condo at the Princesa Resort on Sandy Beach in Puerto Penasco (Aka Rocky Point). We have owned it for a little over 3 years. The number of visitors to the area was always good but has been steadily increasing over that period.
Occupancy is very high from March 1 to July 31,and then starts to decline. Traditionally the winter months...October through February have been slow, but even that period has been increasing. Weekends in October and November seem to be doing well based on some local events, such as a big bike rally in mid November. December is still slow...maybe 20-25% occupancy. January and February are now getting interest from retired people and snowbirds that want to visit in the less busy/noisy times. We have had bookings for maybe 10 days worth in each of Jan and Feb. This year we started getting inquiries for month long stays in that period although so far most of those have wanted ridiculously low rates. And as I mentioned above, the place just goes crazy starting March 1 due to Spring Break and almost every day will be booked.
Condo prices have been rising quickly over the last few years and condos that go on the market seem to sell quickly now. Partially just because it has been “discovered” resulting in more visits...and partly because they are working on a “Home Port” cruise ship port. Construction has been going on for more than 3 years in fits and starts, but there has been some recent recommitment noises from the government which has increased confidence that it may actually get finished and cruise ships may actually visit. If that happens then activity and prices could really jump.
The major attraction is that Puerto Penasco is only about 3.5 hours (1 hour on the Mexico side) from Phoenix or Tucson and it is the closest ocean beach...closer than San Diego. So it is close enough for a weekend getaway for a pretty large population. Having said that we still see maybe 25% of our guests coming from farther away....even Canada. The highway down from Phoenix through Lukeville and Sonoyta is good, and well travelled.
The only real drawback is that while there is an airport there waiting for good sized commercial planes, there is not yet a reliable commercial schedule. Periodically a small regional airline will start flying there but so far it hasn’t stuck. Eventually I think it will though. Once there is a regular commercial flight, that will make it much more convenient for visitors from elsewhere.
Hi @Gord Stevenson, I was reading your post here on your condo. Do you mind giving me some details on your Return on Investment and how much you make of the Condo? Do you have to come up with money out of your own pocket ever to cover the loan, can you get a loan in Mexico without being a citizen, and what is the size of your condo?
I live in Phoenix and would love to invest in Rocky Point as well.