Investing in a property in Mexico
Member since 2022 · 11 posts · 6 votes
We have decided that our next property will be located in Mexico. Ideally we are looking for a single family home (3+ bedrooms) in an area where STRs are profitable. We have not yet decided if we are looking near the coast or inland. Both are options on the table currently.
Does anyone have a realtor or lawyer in Mexico they would recommend? I know that these are largely location dependent, but it would be helpful to connect with someone and see what is available, get a feel for the local laws and what to look out for, etc.
We would also appreciate any insight from anyone who has done this already! Would love to pick your brain on areas, pros/cons, etc. Thank you!
Hi Amy, I just replied to same question you asked me by DM. I'm also replying here so that everybody can benefit before the awesome @Michael Baum tags me as he usually does for all things Mexico or international. Hi Michael! :) And, since it's the second version, you'll get an even more complete answer:
ou are correct about location dependency and so you need to do your homework first. No good lawyer will spend time with you unless you've done your research first and show you're serious, unless you have a personal relationship or recommandation of course. Speaking of which, I used to recommend my lawyers to people on BP but to many have wasted their time so they've asked me to stop unless there is a clear intent to invest in their area. I hope you understand.
Even if you have a good lawyer, it's advisable to check their work. I started getting involved with Mexican contracts more than 20 years ago so I have the gift to see all the mistakes and issues even the best lawyer miss. For example, years ago, we bought a pre-construction property and, in the developer's standard contract, it was mentioned that the purchase contract could only be assigned with permission from the developer. I rewrote the corresponding clause in a subtle way that would allow us to do it without their permission and they accepted it. That development was very successful and many buyers tried to resell before delivery but the developer would oppose until they had sold all their units. We had no intention to resell but you never know and we got an unsolicited offer that we couldn't refuse and we're the only ones who could resell at that point.
Looking for a realtor like you would in the US is a huge mistake IMHO because they generally represent the seller. There are self-proclaimed buyer agents but many of them will have as main objective to sell you something.
The way I go about it is I look for properties myself and contact the seller agent when interested. People who don't have enough time, knowledge or connections on the ground have asked me to look for them so you can ask anybody independent who come across that could help you. This give me access to more opinions and more properties. There's generally no MLS so you'd only get access to the inventory your agent has access to if you hire one.
A good lawyer will help you with offer and purchase process but you can always hire an agent at that later stage if you need help.
Finally, there are very good realtors in Mexico but there's nobody I wouldn't risk recommending to you given that all the properties I've purchased have been off-market through my own search or with the help of a relationship on the ground. But again, if you do what I suggested, you'll come across several and hopefully might bump into a good one.
Hope this helps.
Hi Amy, I just replied to same question you asked me by DM. I'm also replying here so that everybody can benefit before the awesome @Michael Baum tags me as he usually does for all things Mexico or international. Hi Michael! :) And, since it's the second version, you'll get an even more complete answer:
ou are correct about location dependency and so you need to do your homework first. No good lawyer will spend time with you unless you've done your research first and show you're serious, unless you have a personal relationship or recommandation of course. Speaking of which, I used to recommend my lawyers to people on BP but to many have wasted their time so they've asked me to stop unless there is a clear intent to invest in their area. I hope you understand.
Even if you have a good lawyer, it's advisable to check their work. I started getting involved with Mexican contracts more than 20 years ago so I have the gift to see all the mistakes and issues even the best lawyer miss. For example, years ago, we bought a pre-construction property and, in the developer's standard contract, it was mentioned that the purchase contract could only be assigned with permission from the developer. I rewrote the corresponding clause in a subtle way that would allow us to do it without their permission and they accepted it. That development was very successful and many buyers tried to resell before delivery but the developer would oppose until they had sold all their units. We had no intention to resell but you never know and we got an unsolicited offer that we couldn't refuse and we're the only ones who could resell at that point.
Looking for a realtor like you would in the US is a huge mistake IMHO because they generally represent the seller. There are self-proclaimed buyer agents but many of them will have as main objective to sell you something.
The way I go about it is I look for properties myself and contact the seller agent when interested. People who don't have enough time, knowledge or connections on the ground have asked me to look for them so you can ask anybody independent who come across that could help you. This give me access to more opinions and more properties. There's generally no MLS so you'd only get access to the inventory your agent has access to if you hire one.
A good lawyer will help you with offer and purchase process but you can always hire an agent at that later stage if you need help.
Finally, there are very good realtors in Mexico but there's nobody I wouldn't risk recommending to you given that all the properties I've purchased have been off-market through my own search or with the help of a relationship on the ground. But again, if you do what I suggested, you'll come across several and hopefully might bump into a good one.
Hope this helps.
Hi Amy,
When you say “a property that will pay for itself,” do you mean covering HOA fees and utilities, or also the mortgage? I'm asking because, at least in the Mayan Riviera, that can be quite challenging or unlikely, though it really depends on how much financing you'll need.
As @Mike Lambert mentioned, it’s also quite challenging to find a truly good real estate professional in the area. Many agents focus mainly on selling something rather than helping. I work differently. I focus on long-term relationships and genuinely helping people make the right decisions.
Wishing you the best with your investment in Mexico!
Hi Amy,
When you say “a property that will pay for itself,” do you mean covering HOA fees and utilities, or also the mortgage? I'm asking because, at least in the Mayan Riviera, that can be quite challenging or unlikely, though it really depends on how much financing you'll need.
As @Mike Lambert mentioned, it’s also quite challenging to find a truly good real estate professional in the area. Many agents focus mainly on selling something rather than helping. I work differently. I focus on long-term relationships and genuinely helping people make the right decisions.
Wishing you the best with your investment in Mexico!
Hi Amy,
When you say “a property that will pay for itself,” do you mean covering HOA fees and utilities, or also the mortgage? I'm asking because, at least in the Mayan Riviera, that can be quite challenging or unlikely, though it really depends on how much financing you'll need.
As @Mike Lambert mentioned, it’s also quite challenging to find a truly good real estate professional in the area. Many agents focus mainly on selling something rather than helping. I work differently. I focus on long-term relationships and genuinely helping people make the right decisions.
Wishing you the best with your investment in Mexico!
There’s currently an oversupply of short-term rentals in the area, so it might be challenging for the net income to fully cover the mortgage as well. Of course, this depends a lot on your monthly payment amount and the type of property you choose to buy. Generally, the smaller the property, the higher the competition — which can mean lower potential returns.
Most of my clients today are looking for second homes that they can also rent occasionally, but they see rental income more as a way to offset costs rather than fully cover them.
Hi Amy. Just curious to know why you picked Mexico over the U.S. The financing is more favorable here and there are great places that do very well for STR.
@Amy Karony, I ran the numbers myself looking into STRs in Cancun, Playa Del Carmen, Tulum, etc. and found I could get better cash flow returns in the Midwest long-term SFH investments. In Mexico, there are luxury properties that you'd want to target, with high vacancy, and the property managers will eat most of your profits. Not to mention how much easier it would be to manage a LTR vs STR property manager.
Happy to chat more about various out-of-state investing strategies that have worked very well for me over the years!
@Amy Karony, I ran the numbers myself looking into STRs in Cancun, Playa Del Carmen, Tulum, etc. and found I could get better cash flow returns in the Midwest long-term SFH investments. In Mexico, there are luxury properties that you'd want to target, with high vacancy, and the property managers will eat most of your profits. Not to mention how much easier it would be to manage a LTR vs STR property manager.
Happy to chat more about various out-of-state investing strategies that have worked very well for me over the years!
Thank you for your input. We currently live and invest in the Midwest and are looking at Mexico as a sort of vacation destination/investment for our family.
I know it would be less hassle to invest near home and although it may be true that profit margins are higher as well, that is not our only priority. We are, however, looking to maximize profit margins in Mexico, wherever that ends up being. Ideally the place we choose just doesn't lose money - it can pay for itself, and also provide us a fun escape as a family once or twice a year.
@Amy Karony, I ran the numbers myself looking into STRs in Cancun, Playa Del Carmen, Tulum, etc. and found I could get better cash flow returns in the Midwest long-term SFH investments. In Mexico, there are luxury properties that you'd want to target, with high vacancy, and the property managers will eat most of your profits. Not to mention how much easier it would be to manage a LTR vs STR property manager.
Happy to chat more about various out-of-state investing strategies that have worked very well for me over the years!
Thank you for your input. We currently live and invest in the Midwest and are looking at Mexico as a sort of vacation destination/investment for our family.
I know it would be less hassle to invest near home and although it may be true that profit margins are higher as well, that is not our only priority. We are, however, looking to maximize profit margins in Mexico, wherever that ends up being. Ideally the place we choose just doesn't lose money - it can pay for itself, and also provide us a fun escape as a family once or twice a year.
Totally get what you mean. Every time i'm vacationing i'm just thinking should I just move/buy there. Let us know how it goes if you choose a spot!
We currently own a condo in Isla Mujeres - a small island near Cancun. The market has been great over the past 2 years. We also use it numerous times a year.
We are looking into potentially making a second investment in the island in this new construction:
https://www.altamarislamujeres.com/
We know the location well as it is 5-10 min walk from our condo also facing the Caribbean.
Feel free to PM when any questions.
Make sure to consult an attorney a Mexican Attorney (or one that does business there a lot!)
I know people that have lost everything doing RE business in Mexico....one spouse passes away, divorces, etc.... it gets messy real fast.
I'd vote for a really cool US destination instead, but I'm sure you have your mind set on Mexico....just be careful!
Hi Amy,
I love Mexico too :) I live in Puerto Escondido, on the coast of Oaxaca. I have been here for 5 years, bought property and built. Puerto is a very unique area and is growing quickly. I am investing here as well and in the process of acquiring a property management company. As a fellow investor I would be happy to have a conversation about what I have learned from the experience of buying land, and working with agents and lawyers here. It is a different experience than in the states, especially in up and coming areas. Let me know if you'd like to connect!