How I started investing in rental property in the Riviera Maya
The last time I was in Europe, I met a couple that owned several vacation rentals in the Riviera Maya. I must admit I got a bit jealous. Collecting rent and traveling around the world was basically their lifestyle and their only livelihood. They only had to work around 20 hours per week; always receiving a monthly income. Plus, they owned those properties; they could sell them anytime if they wanted to.
After few months of considering it, I realized I didn’t have to be jealous of that kind of lifestyle. I could afford it, so it was time to take a shot and try it myself!
I found a wonderful real estate advisor and went to Mexico to see the properties that I had carefully reviewed online. They flew us in for an amazing weekend focused on showcasing their fascinating developments. The environment was relaxing with no pressure of buying at all. They just wanted to give us a highlight of everything the Riviera Maya has to offer, so we could experience first hand the delicious meals, amazing beaches, and first class amenities that our potential guests will enjoy.
They explained us very well all the pros to owning a rental property in the Mexican Caribbean. In a nutshell, you can make a lot of money if everything lines up well. Here are some of the advantages they told us and we have actually experienced:
Direct income stream
With 20 million visitors coming to the Mexican Caribbean every year, the regular income from vacation renters is the biggest benefit, of course. For example, if you own a property that you rent out for $1,000 USD per week, when fully occupied will put $48,000 USD per year back into your accounts.
It’s hard to discuss this argument with those kinds of figures. They are extremely optimistic, but even partial results can be amazing. If you can keep the property rented for just 75% of the year, that’s still $36,000 USD a year in income. Not bad for less than 20 hours of work per week, huh?
In the Riviera Maya this is completely guaranteed. It can be different depending on the type of property and the location, but for sure, the value will rise over the course of a few years due to the high demand.
Low property taxes
In case you didn’t know, Mexico has extremely low property taxes, which come in at around 1/10th of 1% annually.
You can choose from a huge variety of companies that can manage your properties for you. Most of them are in charge of maintenance services, controlled key-access, bill payment services and documented maintenance inspections, monthly financial statements documenting revenue and itemized property expenses, and much more.
The process of buying a property for a foreigner is quite simple, but it requires a fideicomiso or bank trust. In 1993, the law was amended to allow foreigners for purchase within restricted areas through a trust agreement established with a Mexican bank. This is normally an easy step, but you will need some guiding.
After my husband and I chose a cozy studio in an amazing private community in the heart of the Riviera Maya, we went to a beachfront restaurant to celebrate our first baby step towards our dreams. But buying a property is only the beginning, little we knew that there’s a lot of work to be done even as a passive real estate investor. But every minute is worth it.
Here are some tips based on the steps we followed after our purchase:
At the time of closing, be sure to get your new property an insurance to be fully covered. The basic ones that I recommend are: eviction, fire and hazard, flood, and liability. There are many others, it depends on the type of investment you will hold. Ideally, find yourself an agent who can advise you, and get covered before you get started.
Actually, we did this at the same time we were closing the deal. We consider that having a property management team is our most valuable asset. Having the place perfect for each guest is a lot of work. Plus, they are our face; they handle everything and save us a lot of headaches. You just need to be sure that the ones you choose are trustworthy, sort out the details on your lease agreement, and make sure you’re on the same page before things really get going.
Get to know the place
Even if you purchase just as an investment. We felt really well trying it out for a few months at the beginning. We bought a brand new property, and we were able to understand the things that were missing or needed to be changed; simple things, but still quite important. For example, we realized guests might need a step to reach things on the higher cupboard. We wouldn’t have notice if it weren’t because we spent some time in there. If the real estate you purchase is not a new one, probably you need to spend more time and money on the repairs and remodeling. Take care of all the details and have your property spruced up and ready to rent!
Place an ad
Honestly, we only have our ad in two different websites, but there are plenty of platforms that can help you with your bookings. Even on Facebook! You just need to take amazing pictures of your place and make up a creative and attractive description. In the Riviera Maya there are a lot of options, so setting up a competitive price and showing the best features and amenities of your place is very important. Normally, the property managers place the ads for you, but I like to do it myself.
Plan your portfolio
We want this to be our livelihood, so sitting and waiting was not an option for us. A year passed by before we decided to buy a second rental property. And then we bought a third. We knew our team was doing a great job, we saw the benefits of being passive investors, so we gave it the best shot possible to succeed by purchasing a multiple vacation rental portfolio. Also recommended.
Being a passive investor doesn’t mean you don’t have to be involved. All your strategies need to be proactive and you should step in when needed. You are still the owner, and you need to act as one and lead the way. Everybody should know that you are in control. Don’t worry, luckily you won’t have to do this many times, but for sure you must let your managers know that you are in charge and well informed.
I’m now writing this blog from a gorgeous spot in Tulum, surrounded by lush vegetation and the sound of silence. We are trying out the most recent property we’ve bought. So we really think are dreams are coming true. We have also traveled a lot, especially in Central and South America. Discovering all the wonders that lie within, the amazing people and delicious food. We haven’t been everywhere, but it’s on our list!
Definitely, after purchasing a rental property in the Riviera Maya, my life has gone from good to better. It is not for everyone, though, you must be patient and tough!