Is Buying Property in Mexico a Good Investment?
Is Buying Property in Mexico a Good Investment?
There are many ways to profit from investments. Some choose stocks and bonds to multiply their money, some invest in commodities like gold, while others start businesses.
Another very popular and common way of growing your money is by finding the right real estate opportunities in which to invest. Property investment - whether in your hometown in Canada, the United States or in other countries - is often regarded as being one of the safest ways to grow your money over the long term, or diversify your existing portfolio.
So what about buying an investment property in a vacation destination? Is buying property in Mexico a good investment? If so, what are some of the best places to buy property in Mexico?
In this article we'll break down how real estate in Mexico works, discuss the Mexico real estate market generally, and offer our take on whether buying real estate in Mexico offers a good return on your investment or not.
Is Mexico a Good Place to Invest?
The real estate market remains hot, and this is true whether you're interested in purchasing Mexico property on the Riviera Maya (including hotspots like Playa del Carmen, Tulum, or Cancun) or in quieter areas located in other parts of the Yucatan Peninsula like Puerto Aventuras or others. Indeed, Quintana Roo real estate holds real promise - not just now, but into the future as well.
However, determining whether or not you can make a successful real estate investment in Mexico will first require you to weigh several key factors before diving in.
First, you'll want to make a decision as to whether or not you're interested in living in Mexico full-time, or part-time, or if your main concern is arms-length property ownership with a focus on rental income. After all, buying a vacation home in Mexico will deliver different levels of profit depending on how often you use it, and whether or not you're comfortable renting it out to others.
Anyone interested in calculating the profitability of Mexico real estate will also have to look at a number of other factors to determine your return on investment (ROI), such as:
- The strength of the Mexican peso versus the Canadian or U.S. dollar at the time of purchase (update September 2023: it is very strong)
- Property values and appreciation trends in the locations you're interested in
- The surrounding infrastructure and amenities
- Ease of access and transportation options
- Overall costs involved in the buying process
- Details related to rental income, capital gains taxes and other future costs and fees
- Property maintenance and upkeep costs
- Cost of living expenses in Mexico
- Mexico tourism trends (which affect property values differently depending on where you buy)
- And more!
While this may seem like a daunting list of criteria to investigate at first glance, fear not! Zisla is a company that specializes in connecting foreign investors with houses for sale in Mexico. They have the experience necessary to walk you through all of the elements safely, securely and profitably.
Can Foreigners Buy Mexico Real Estate?
Yes, foreigners can buy property in Mexico. And it's fairly simple too - once you get to know the rules. With a partner like Zisla by your side, they’re easy to understand.
The process is only slightly different from buying properties in your home country, requiring buyers to enter into a bank trust agreement called a fideicomiso to complete the process. We explain how any foreigner can do so in great detail in two of our other blogs, entitled "Buying a Vacation Home in Mexico" and "How to Buy Real Estate in Mexico," which we highly recommend you read.
The answer to this will always depend upon the preferences of the buyer. However, the country has a rich history and a vibrant culture, the weather is great all year round, the beaches are pristine, the people are friendly, and for that reason almost anywhere in the Yucatan Peninsula would be a great place to invest in real estate.
One thing is certain: there is a limited supply of beachfront property. Based on the rules of supply and demand, it is a safe bet that the property value of vacation homes located in areas on or very near the beach will rise in value over time. For this reason, buying a vacation home or property on the Riviera Maya is a good place to start your search.
This 80km stretch of beach on the eastern coast of the Yucatan Peninsula is home to some of the most recognized areas in the entire country including Playa del Carmen, Cancun, Puerto Aventuras, and more. Real estate in Tulum has always been popular as well, but the east coast of the peninsula is not the only game in town. There are also options in the northwest including great real estate in Merida, Chelem, and a number of other great possibilities for Yucatan real estate.
Because there are so many options, our number one recommendation is to start by having a conversation with an expert who knows the area and has successfully connected foreign investors with their dream properties for years. Zisla is a company you can trust to demystify the process, provide you with the answers you need, and help you achieve your real estate dreams.
Contact us today and start the conversation!