Real Estate Agent · San Antonio, TX · Member since 2019 · 33 posts · 6 votes
Hi BP!
I got into a pre-sale for a condo in Tulum, Mexico with the idea that I would Air BNB it and also go in visit through extended periods. I'm supposed to receive the keys this summer and they have been making great progress but who knows how much it'll slow down with this Covid-19.
Is anyone in some kind of similar situation with their Air BNB rentals in any different country? I imagine in this economy the money has come to a grinding halt but if anyone has property in other countries whats the next move? If Keys are received on time should I attempt to rent it to a local for a long term play instead? Curious to see if anyone is in a similar situation. Thank you.
There are no restrictions to foreign investment. If you buy a property within the Forbidden Zone (within 31 miles of the coast or 62 miles from the international borders), you need to buy through a bank trust (fideicomiso) or a Mexican corporation. The corporation is only worth it if you buy several properties.
There are no logistical challenges to buying furnishings, electronics on anything else. You can find pretty much all of your usual American store chains in Mexico.
What your VAs are telling you is correct. Operating costs are dirt cheap in Mexico, in absolute value and compared to the potentially (very) high amount of rental income you can make.
I haven't run into any problems thus far. The recipe: knowing what you're doing and people who you know and trust.
Feel free to reach out if you have any more precise questions.
Real Estate Agent · San Antonio, TX · Member since 2019 · 33 posts · 6 votes
6y
@Judith Sanders I imagine that is going to be the advice of anyone in this position. My wife and I where already contemplating selling to use that money in the states but if values drop tremendously I imagine I'll just hold off on that.
Real Estate Agent · San Antonio, TX · Member since 2019 · 33 posts · 6 votes
6y
@Matt Ayoub Yes I was excited when we started and honestly still excited now about it but the virus is making it harder and harder to keep the optimistic. Are you going to look for any options from long term renters?
Real Estate Agent · San Antonio, TX · Member since 2019 · 33 posts · 6 votes
6y
@Luke Carl Hey I heard your podcast not too long ago! Yes Tulum is fantastic! The food is amazing and it's really cheap if you tried it in town. Everyone goes to the strip by the beach but food can get a little pricey there. Either way it's one of our favorite getaways!
@Luke Carl Hey I heard your podcast not too long ago! Yes Tulum is fantastic! The food is amazing and it's really cheap if you tried it in town. Everyone goes to the strip by the beach but food can get a little pricey there. Either way it's one of our favorite getaways!
Real Estate Agent · San Antonio, TX · Member since 2019 · 33 posts · 6 votes
6y
@Lucas Carl lol yeah my bad. I never thought of the many horror stories that can come with STR. It just never dawned on me till I heard that podcast. My wife and I talked about how we read funny reviews on the time. Before we were married we where looking at some nice Air BNBs in Tulum to go stay in and there's this one guy that was extremely upset but the landlord dished it right back saying that the help let her know how he was behaving all night. It was a mess. 😂
Investor · Queen Creek, AZ · Member since 2016 · 13 posts · 2 votes
6y
@Willie Cedillo
I have a STR in Puerto Penasco Mexico (AKA Rocky Point). Historically March and April have seen full occupancy for me. The Governor has closed the beaches and imposed a 10PM to 6 AM curfew, the border has been closed to non essential travel. This too shall pass, however many are currently feeling the effects of the virus impact. Tourism pretty much drives the economy of Puerto Penasco and many residents are really having to struggle to get by.
I got into a pre-sale for a condo in Tulum, Mexico with the idea that I would Air BNB it and also go in visit through extended periods. I'm supposed to receive the keys this summer and they have been making great progress but who knows how much it'll slow down with this Covid-19.
Is anyone in some kind of similar situation with their Air BNB rentals in any different country? I imagine in this economy the money has come to a grinding halt but if anyone has property in other countries whats the next move? If Keys are received on time should I attempt to rent it to a local for a long term play instead? Curious to see if anyone is in a similar situation. Thank you.
I would back out quickly. Tourism to Mexico will be hurt for at least a year and I doubt the US will allow any travel there after COVID cases get worse. The President of Mexico has his head in the sand. He has been out in public hugging people, shaking hands and dismissing the idea of social distancing. Their health care system is horrible. This will ravage their country over the next six months.
What you mentioned about Mexico’s president is totally accurate. The government there has since changed their tune but, unfortunately it might be a bit late indeed.
However, I suspect @Willie Cedillo might have bought a pre-construction property, that might only be delivered in a few years so your conclusion wouldn’t apply. Even if the property got delivered today, people who buy in Mexico most often pay cash and Mexican properties have very low holding costs. Therefore, they won’t get bankrupt if they property doesn’t rent for a year, notwithstanding the fact that they might have bought a vacation property just for their own use.
Finally, the article rightfully doesn’t mention that the Mexican healthcare is that bad. And for good reason. According to the attached official ranking from the WHO below, Mexico’s healthcare system isn’t that bad, being ranked 61st out of 191 countries, not that far behind the US.
Indeed, what might come as a shock to many is the fact that the US is only 37th, way behind a country like Colombia, who sits in 22nd position! Maybe you’ll agree with me that the fact that the US is “only” 24 spots in front of Mexico and 15 spots behind Colombia is actually shocking, given the different in wealth and level of development between the US and those two countries. Mind you, my country of Canada is only 7 spots in front of the US and in position 30, which I find shocking too but, sadly, am not too surprised about.
Did you know that more and more Americans go to Mexico for elective surgeries or dental treatment? This wouldn’t happen if the Mexican system was that bad. Oftentimes, they get operated by a Mexican surgeon trained in the US who work part-time in the US and part time in Mexico and performs the exact same procedure in both countries. The difference? You’d pay as much as five times more for the privilege of being in the US though.
I got into the agreement two years ago and supposed to take possession this year. I have an agreement with the builder to pay a certain amount through them. It's half of what I agreed to pay for the property so It'll be financed for 6 Years. This entire thing is unprecedented so not entirely sure what to do. Obviously going to continue to find a way to pay it but I originally expected the Air BNB model to help pay the financed amount.
What you mentioned about Mexico’s president is totally accurate. The government there has since changed their tune but, unfortunately it might be a bit late indeed.
However, I suspect @Willie Cedillo might have bought a pre-construction property, that might only be delivered in a few years so your conclusion wouldn’t apply. Even if the property got delivered today, people who buy in Mexico most often pay cash and Mexican properties have very low holding costs. Therefore, they won’t get bankrupt if they property doesn’t rent for a year, notwithstanding the fact that they might have bought a vacation property just for their own use.
Finally, the article rightfully doesn’t mention that the Mexican healthcare is that bad. And for good reason. According to the attached official ranking from the WHO below, Mexico’s healthcare system isn’t that bad, being ranked 61st out of 191 countries, not that far behind the US.
Indeed, what might come as a shock to many is the fact that the US is only 37th, way behind a country like Colombia, who sits in 22nd position! Maybe you’ll agree with me that the fact that the US is “only” 24 spots in front of Mexico and 15 spots behind Colombia is actually shocking, given the different in wealth and level of development between the US and those two countries. Mind you, my country of Canada is only 7 spots in front of the US and in position 30, which I find shocking too but, sadly, am not too surprised about.
Did you know that more and more Americans go to Mexico for elective surgeries or dental treatment? This wouldn’t happen if the Mexican system was that bad. Oftentimes, they get operated by a Mexican surgeon trained in the US who work part-time in the US and part time in Mexico and performs the exact same procedure in both countries. The difference? You’d pay as much as five times more for the privilege of being in the US though.
I am not surprised. Do some research and it is scary how wasteful, incompetent and politically motivated the WHO is. The WHO only thinks health care is good if it is universal. Do you really believe Columbia has better health care? I guess it really depends on your definition of better. The report you referenced is health care efficiency, so it weighs costs against results. In other words, if you can save money by having people wait and by denying expensive treatments, that is considered better. The US system is extremely expensive, but if you have a serious or rare condition, the care in a US hospital is best in the world. Keep in mind the same report lists Italy as number two. This virus has revealed all the cracks and deficiencies of their system.
The risk is that Mexico is horribly unprepared. They have 2050 ventilators in the entire country, versus US has 177,000. Mexico has 1.3 hospital beds per thousand people versus US has 2.8 per thousand. More important in this case is ICU beds. Mexico has 1.2 ICU beds per 100,000 people versus US has 34.7 ICU beds per 100,000. The US has second highest number of ICU beds per population in the world, double or more most any other country.
I hope I am wrong, but I think this virus will be a nightmare in Mexico and I think the border will be on lock down for quite some time. I have been to Mexico many times and love the country, but for me it is just too unstable to invest or even vacation anymore.
As you rightfully alluded to, the quality of the healthcare system in the US is very different depending on whether you’re wealthy or earn an average income. And, is it all that great if you earn an average income?
Comparing what the wealthy Americans have access to and what the average Mexicans have access to is like comparing apples and pears.
And yes Colombia and Italy have great healthcare systems for the average person. The issue with Italy is the old average age of the population combined with the health of the elderly more than the quality of its healthcare system.
As you rightfully alluded to, the quality of the healthcare system in the US is very different depending on whether you’re wealthy or earn an average income. And, is it all that great if you earn an average income?
Comparing what the wealthy Americans have access to and what the average Mexicans have access to is like comparing apples and pears.
And yes Colombia and Italy have great healthcare systems for the average person. The issue with Italy is the old average age of the population combined with the health of the elderly more than the quality of its healthcare system.
Actually that is not what I said. Everyone gets treated. If I called 911 today and had no insurance, an ambulance would come within a few minutes and I would be brought to the hospital to get the same care as someone with insurance. The difference is when I left the hospital, I would have a larger bill. Some people don't or can't pay those bills and the hospitals write it off. Essentially anyone with insurance is paying more to cover those who default. And if you are poor, there is government provided health care that gains you access to the same quality of care. Where the gap exists is more on preventative care, not emergency care. If you don't have insurance, you are unlikely to go in for an annual physical, because you would have to pay for it.
My idea of better is not everyone getting average care. I think everyone should have the best care. But that is why people from around the world travel to the US for procedures.
Sorry to get off topic. I still think Mexico is in a bad position. I hope you are right, because I don't want to see massive deaths anywhere.
No worries! I actually agree with you 100%. Quality is the most important and the US definitely has it. I was pointing out to the fact that, sadly, healthcare costs are huge and climbing and not everybody in the world has access to the best healthcare. I don't really have an opinion of the WHO but what they point out to is that certain countries like Mexico still do a good job with their healthcare system given the more modest means that they have.
Knowing the limitations of their healthcare system, the current Mexican government should have been more careful. They finally have gotten together and hopefully it's not too late! Let's hope that the great Mexican people don't get affected too much and that it's soon safe again for you and I and everybody else to go back and visit!
Kirkland, WA · Member since 2016 · 39 posts · 17 votes
5y
@Willie Cedillo did you get the keys? did you still do STR? Given that some months have gone by already.
We do STR in Tulum, and started end of 2019. We were getting lots of booking. Then COVID hit, bookings got cancelled all the way through summer. Our last reservation was mid March. We had the property empty, until our first booking after COVID in mid June! Since then bookings starting picking up. Summer months that may be slow season, it was still busy. The calendar has been booked so far. Guests said that wanted to escape the lock down.
Just wanted to share my experience so you don't get discouraged, if you already got this far. But maybe others that are doing STR in Tulum are not experiencing the same situation? We are still getting bookings, so fingers crossed!
@Willie Cedillo did you get the keys? did you still do STR? Given that some months have gone by already.
We do STR in Tulum, and started end of 2019. We were getting lots of booking. Then COVID hit, bookings got cancelled all the way through summer. Our last reservation was mid March. We had the property empty, until our first booking after COVID in mid June! Since then bookings starting picking up. Summer months that may be slow season, it was still busy. The calendar has been booked so far. Guests said that wanted to escape the lock down.
Just wanted to share my experience so you don't get discouraged, if you already got this far. But maybe others that are doing STR in Tulum are not experiencing the same situation? We are still getting bookings, so fingers crossed!
Thank you so much for your comment! We actually moved to Tulum for the rest of the year to receive the keys and furnish the place. We just received the keys last Friday and had already started furnishing it. I'm planning on it being fully prepared as a STR by mid Jan. It felt like STR took a huge hit with COVID everywhere so yes fingers crossed!!!
Kirkland, WA · Member since 2016 · 39 posts · 17 votes
5y
@Willie Cedillo Congrats! That's great news. STR took a hit with COVID, but for us it was just from mid March to mid June, after that we've been getting bookings and busy! Hope you can start as soon as possible. Best of luck!
Residential Real Estate Broker · Cartersville, GA · Member since 2015 · 575 posts · 581 votes
5y
I have 13 virtual assistants in central America (11 in Mexico) and I was considering using them to help me get a few Airbnb's going down there but only looked at it from a high level thus far. I was also not intending to buy anything as I was under the impression they still had restrictions on foreign investment in coastal properties but instead was going to just do arbitrage and rent a condo or house. So what have you guys run into in the way of problems? My VA's assure me that cleaning is dirt cheap, utilities are dirt cheap, rent is not so cheap (for a nice place). I have no idea how much or what logistical challenges I would have in the way of furnishing, buying electronics, etc.
There are no restrictions to foreign investment. If you buy a property within the Forbidden Zone (within 31 miles of the coast or 62 miles from the international borders), you need to buy through a bank trust (fideicomiso) or a Mexican corporation. The corporation is only worth it if you buy several properties.
There are no logistical challenges to buying furnishings, electronics on anything else. You can find pretty much all of your usual American store chains in Mexico.
What your VAs are telling you is correct. Operating costs are dirt cheap in Mexico, in absolute value and compared to the potentially (very) high amount of rental income you can make.
I haven't run into any problems thus far. The recipe: knowing what you're doing and people who you know and trust.
Feel free to reach out if you have any more precise questions.