First, let's talk about the real estate market in general. Housing is a tangible asset to invest. There are minimal risks compared to other types of investment, such as stocks, for example, that are intangible and run the risk of losing value quickly. On the other hand, real estate is a medium or long term investment, which is easy to control. Mexico is a popular place for foreigners to buy properties, especially for Americans and Europeans, as it offers the perfect combination of location, potential and lifestyle. Especially, Playa del Carmen is not only a beach destination that attracts many tourists, it also positions itself in the 10 most important real estate markets in the world. Having a great development in recent years, with a growing demand, Playa del Carmen has a very stable real estate market without rapid fluctuations and, most importantly, with an annual return on investment of up to 20%. The most favorable investment is to buy an apartment for vacation rentals. Tourism continues to grow and there is a great demand in this sector, especially in the city center, near the beach. So, to answer your question, in a nutshell, investing in Playa del Carmen would be a smart way to generate income without doing much for it.
It is well known that location is a determining factor when buying your real estate asset. Above all, if your purpose is vacation rental. Everyone who travels to Playa del Carmen has one thing in common: they want to stay close to the beach and the main attractions, without the need to spend money on transportation to enjoy their vacation to the fullest. This makes the center of Playa del Carmen the best location for vacation rentals. Being more specific, the limits that comprise: Avenida Constituyentes, Avenida Benito Juárez, between the road and the beach. In this area, there are the most important points of interest, such as: Fifth Avenue full of shops, restaurants and entertainment venues, as well as bus stations, the ferry to Cozumel and, most importantly, the beach. Olympus Playa is exactly at these coordinates, on 6th Street between 15th and 20th avenues. Strategically located, just 4 minutes walk from the beach, 2 minutes from Walmart and 3 minutes from 5th Avenue.
Of course it can! There are a couple of conditions. After Mexico went through a difficult period, it is stipulated in the Mexican Constitution that there are restricted areas where foreigners cannot buy land. For example: The restricted area would be all land within 100 km (62 miles) of the international border and 50 km (31 miles) of the coast. But as the world developed, it is now much easier to monetize and control the situation, so in 1973 Mexico changed its laws and now foreigners can buy property anywhere in Mexico. And while Playa del Carmen is within the restricted area, there are 2 options to buy real estate: 1. With a Mexican financial institution through a Trust. 2. Open a company in Mexico: what foreigners can do without any problem. In addition, it is important to know that if you are buying to invest your money in vacation rentals, the management company may have the right plan, which means saving on the annual Bank Trust rate.
Fideicomiso means that a bank acts on your behalf, declaring the first beneficiary with all legal rights to the property, be it the house or apartment acquired. Paying a fee to establish said contract, as well as an annual fee. Both will be determined by the value of the property being purchased. The Trust is valid for 50 years and is renewable. Actually, there are 10 years after this period for such renewal.
As explained in the previous point, the Fideicomiso is required to make the purchase, said procedure must be carried out by a Notary. It is explained below. Hire a notary to write the contract for you.
In Mexico, not all market properties are listed online, so to know all the possible opportunities it is essential to have a real estate agent. There are many English-speaking agents in Playa del Carmen, some are even American or Canadian.
Yes, you need to work with a certified notary to make sure everything is in order and that there are no debts for the property to acquire. Likewise, the deed will be signed at the notary's office and he will be the one to carry out the procedures when transferring the title of the property. NOTE: They charge individual fees, so be sure to compare several before hiring one. The seller will provide you with the copy of the deed of the property, which must be evaluated and verified by the notary. Which will also collect all the necessary documents from the seller, as well as the deed of the original property, the current tax records, the utility bills paid and the details of the land service fees with balance equal to zero.
Yes, as explained above, of course you can rent the property. And in doing so, generate income with this investment!
In addition to obviously you and the seller, you will have to work with several professionals to make sure everything is done in the right way and for your satisfaction. Real estate agent. Of course, you can also try to find the apartment of your dreams alone, but we recommend that you go with a real estate agent who speaks English. Because the online world in Mexico is still developing, and if you only search by that means, many properties will be lost. The rates of real estate agents in Mexico are not very high and it is common to negotiate them. You can ask for a referral to make sure you work with an agent that has the best in mind according to your interests. Mexican financial institution. To establish a bank trust and act on your behalf. Lawyer. From your complete confidence to accompany you through the procedure and, if necessary, a translator to make sure you clarify everything, especially the contracts to be signed. Local tax advisor To ensure that you will validate all tax requirements for your home country. Notary. To verify all documents and ensure there are no debts on behalf of the property. As we mentioned before remember that they charge individual rates, so be sure to compare several before hiring one.
You can get a so-called "cross-border" loan that gives credit to foreigners in order to buy a property or invest.
This part is not as regulated in Mexico as in other countries and depends mainly on the value of your real estate property. In this list you will find the rates that will be produced:
Fee for your real estate agent, variable.
Rate for the notary and the lawyer, also variable, within 16% VAT.
Acquisition tax, between 0.2 and 4.5%.
Registration fee, between 0.02 and 1.8%.
Title insurance around 0.5%.
Property tax, called Property, paid annually. Calculated as a percentage of the assessed value determined at the time of sale. Currently at 0.25%.