As the deep freeze settles into Canada, thoughts turn to more sunny, warmer climates, and the mind starts to wander a bit.
If you are a real estate investor – or just a savvy investor, period – perhaps a little adventurous, a risk-taker, then Mexico remains an interesting investment target.
I know this because I did it – quite successfully, I should add. I bought a three-bedroom, three-bathroom island home (brand new when purchased, backyard pool, rooftop deck with 360-degree Caribbean views, located on the highest elevation point, on the serene, southern tip of Isla Mujeres, a 14-minute ferry ride from Cancun) in May 2016. Working with my friend at Remax, I sold it in October 2018 – at a profit of 34 per cent.
How did I do this? There remains a lot of demand from curiosity seekers looking to diversify their portfolios. Big risk equals big reward sometimes. I was personally amazed at the high number of Canadians and Americans who were taking the plunge and buying land, houses and condos in the Riviera Maya region of Mexico.
An effectively run short-term home rental business over platforms like VRBO or Airbnb can greatly increase the value of your investment. That’s what I did. Eventually my property ranked in the top five percent on VRBO, in terms of positive guest reviews and search results. The gross rental income on my property topped $50,000 annually – and that was with me not paying full-time attention to it. If I really focused on this as a business – buying several properties, proactively managing rentals through all of them, that income would have been well into the six figures. I know many people down there now who are buying and renting their homes to tourists seeking out quality accommodation.
But you need a good lawyer – someone reputable, who knows how to work the system, looking into property titles, searching the history of the property, checking to see if there are any liens, looking into the reputation of the developer or builder (trust me on this – this is one area that you really need to pay attention to). Post-purchase, you need a quality property management team down there you can trust, who has an eye on your property.
You invest in real estate because you want to make money. When it comes to vacation real estate, you may also want the property as a place to go to when the cold weather settles in. You may want to hand it on occasion to friends and family. But the underlying objective is to increase your wealth.
Mexico is also a minefield. Many of the stereotypes you read about Mexico are true to a degree – there is crime, there is corruption, there are horror stories of Canadians and Americans who have bought property there and who have fallen under the thumbs of crooks and the corrupt. I can tell you stories. I saw things. I heard things. I experienced things myself. There is no point in trying to smooth over all this with a layer of crap – simplistic marketing slogans or transparent sales-speak from real estate brokers and developers.
Consider this, though – there are also stories of this happening to real estate investors in Toronto. There is organized crime in Canada. There are gangs. There are shootings in downtown Toronto.
There is vast opportunity to make a lot of money in Mexico if you partner with the right people, factoring in the appreciation in the value of your real estate asset, as well as what you take home via a short-term rental vacation property business.
The bottom line – the Riviera Maya region, where I invested, remains one of the prime tourist destinations anywhere in the world. Canadians and Americans continue to flock there (50% off all tourists that go there) – drawn to the immaculate beaches, the sun, the food, the culture, the people. Canadians travel to Mexico more than any other country except the United States. I lived on our island, in our home with my wife, for one calendar year, and I can personally attest to this – Mexicans are wonderful, charitable, generous, open people. They love family. They love their culture. They love their traditions. They love their country. We never had any incidents, where we worried about our personal safety.
Peel aside all the negative surface talk, the sensationalist news headlines, the social media chatter, look behind the red curtain, and that’s what you will find – opportunity.
Buying property in Mexico is not for the feint-of-heart. It’s for the strong. It’s for the adventurous. It’s high risk. But it’s also high reward.
Email me at email@example.com for more information or consultation. I know where the right people are, and I can help you get your start.