Why and How to Invest in Mexico

​

Starting in 2019, the current strength of the dollar has created exceptional value in some of the most booming investment property markets in the world, including Mexico.
This creates a fantastic scenario today for investing in a vacation home or a full-time second home, whether you want to collect continuous income or plan to live in Mexico full or part time.

Can I have property in Mexico if I am a foreigner?
First of all, it is important to establish once and for all that YES, foreigners can acquire and have property in Mexico legally, even in the so-called “Restricted Zone” (see more of this below).

In fact, changes in Mexico's Political Constitution have made it easier for foreigners to purchase real estate in Mexico and today is a great time to buy. In these areas, “restricted” only refers to the federal government's requirement that buyers establish a trust in order to have a property title.

​

What is a Restricted Zone in Mexico and Where Are They Located?
In accordance with the Political Constitution of the United Mexican States, Restricted Zones include properties located 100 kilometers from any international border and 50 kilometers from the coasts. In these areas, the "restriction" simply refers to federal government rules governing real estate transactions involving foreign buyers.

​

What is a Trust?
The trust is a contract established in the General Law of Securities and Credit Operations as well as in the Constitution of Mexico and in the Foreign Investment Law, in which a person called the Trustor gives the title of assets to another called Fiduciary so that it administers them for the benefit of a third party trustee.

​

According to Mexican legislation, foreigners who invest in the country, acquiring a property that is in the restricted strip, this is in a strip of one hundred kilometers along the borders and fifty kilometers on the beaches, are only allowed the use and exploitation of real estate located within this restricted area, through the constitution of a trust.

This is achieved by applying for a Permit themselves that are granted by the Ministry of Foreign Affairs and which are intended to allow the use and exploitation of real estate located in a restricted area in favor of foreigners (natural or legal persons) or , to Mexican companies with a foreigners admission clause as long as the property is used for residential purposes, for a maximum period of 50 years. The trust agreement must be recorded in a public deed.

​

Advantages of the Trust:
Depending on the type of trust and the clauses agreed upon, certain advantages are obtained, some that usually apply to all or most of the trust contracts:
The administered assets are unattachable.
Accounting and independent audits.
Tax benefits.
It can be used for the realization of unlimited purposes, as long as they are lawful.

Types of Trusts:

• Investment: The purpose of the investment is financial resources.

• Guarantee: That is used to guarantee some type of payment or compliance clause.

• Administrative: It is used to transfer personal administration to a natural or legal person in compliance with some type of contract.

 

The Best Places to Invest in Real Estate in Mexico
Either way, housing prices in Mexico are much more affordable when compared to other similar destinations, especially in the Riviera Maya, which lies on the Mexican Caribbean coast, covering more than 120 kilometers from the south of Cancun.
In fact, you simply cannot invest in real estate without first visiting the Riviera Maya, which is home to major vacation destinations such as Cancun, Playa del Carmen, Puerto Aventuras and Tulum.

​

Main reasons to invest in Cancun and the Riviera Maya
1. Tourism
Tourism is the main engine of the Quintana Roo economy, due to its high demand for visitors from different parts of Mexico and the world who are looking to spend a season in the crystal clear waters of the Mexican Caribbean.

Likewise, the Riviera Maya is one of the most popular vacation destinations in the world, as evidenced by the figures and occupancy records that it continues to break each year (only considering those who stay in hotels).

Quintana Roo destinations such as Playa del Carmen, Tulum and Cancun, have been recognized for their excellence in every way, thus raising the name of the state and Mexic
In fact, the Cancun International Airport is the second busiest in Mexico, only after Mexico City, this is mainly due to the tourist market that visits this region throughout the year and constitutes the majority of the airport operations.

 

2. Infrastructure
When we talk about the exuberant nature of the Riviera Maya, this does not mean that it does not also have a modern urban infrastructure that compares with the best cities in the world.

The services available in Riviera Maya and its surroundings are of high quality, in addition to having the best amenities such as premium shopping malls, gourmet restaurants, spas, golf courses, eco-parks and other entertainment and lifestyle options that make that living anywhere in the Riviera Maya is an enviable experience.

Likewise, the intense activity of the tourism and services sector generates economic conditions that favor the development of the state and its municipalities. In addition, the constant improvement of infrastructure and road and air connectivity conditions, allows the market a great opening to private capital investments for the development of projects that translate into better business and employment opportunities, as well as quality of life for its population.

As a result of this dynamic, Quintana Roo recorded in 2018 a contribution to the Gross Domestic Product of Mexico (GDP) of 4.5% and they estimate that this year the goal is 4.9%, which may be a fact for the construction of new hotels and Terminal 5 of the Cancun Airport, among other projects.

​

3. The Mexican Caribbean, home to retirees
Mexico has been popular with international investors for decades as one of the best places to retire abroad, and now Forbes magazine has advised its readers that this is an ideal time to invest in Mexico real estate, stating that the second economy Latin America's largest is also one of the best four places in the world to acquire a second home and / or a vacation residence abroad.

Especially the Riviera Maya, Playa del Carmen, Tulum and Cancun are favorites of many, because its natural attractions and its archaeological remains are testimony to the greatness of one of the most important civilizations, the Mayan culture.
In addition to the fact that this area has all kinds of services and amenities, it has become a paradise that many retirees and expats have made their home.

​

4. Vacation Residence
The Riviera Maya is more than just stunning landscapes, for years it has also been an investment hub for different types of markets, especially real estate.

This region has advantages that are difficult to gather in other places and that make it an attraction for those seeking new business opportunities that generate good income at low risk.

Some of the innovative condo-hotel developments in this area offer resort-style services and amenities, along with the “No Worry, No Hassle Property” program, which basically means that buyers don't have to do anything to maintain or rent the property. ... except sit down to collect a continuous income from vacation rental and enjoy your property with your family and friends, when they like to visit it.

​

5. Return on Investment (ROI)
The tourist attraction of the region brings with it a national and international market with the need to find accommodation, that's where vacation rentals in the Riviera Maya come into play, many travelers decide to opt for an alternative to the hotel and stay in some private property Some of these are apartments that were acquired as a way to invest for rent and that if properly managed can generate between 6 and 12% annual return on investment.

​

6. Exchange rate in favor
The Mexican real estate market is one of the most dollarized in the world. In fact, the apartments for sale in Tulum, Playa del Carmen or Cancun, are normally valued in dollars, this offers some advantages to the buyer, such as the possibility of freezing the cost at the exchange rate in effect at the time of the sale.

In addition, if the property is used through vacation rentals, many of them will be paid in dollars, representing a greater profit.

 

7. Appreciation
In general, capital gain is an inherent advantage of real estate, however, there are some factors present in the Riviera Maya that enhance it; its geographical strengths, infrastructure and services in the region, quality and design of the real estate offer, tourism growth, among others, so that the properties in the area enjoy an excellent appreciation that only aims to increase in the future.

The above aspects demonstrate the potential for growth and development when making a real estate investment in the Riviera Maya, which can be exploited through vacation rentals and, of course, give it personal use to spend a few seasons in that piece of paradise in the Mexican Caribbean.

 

The 3 best cities to invest in the Riviera Maya
1. Cancun
Cancun, located in the state of Quintana Roo, has been one of the cities that has undergone the greatest transformation in all of Mexico. It went from being a fishing village to an international vacation paradise, with one of the best tourist infrastructures in the whole world, which is a reflection of the beauty and history of this place.

We are talking about the largest tourist destination in Mexico in the country, and one of the most popular internationally, therefore, Cancun is one of the most popular places among investors seeking to grow their capital.

​

Learn below, these 7 reasons why Cancun is the perfect place to invest in real estate and real estate.

 

1. According to the SEDUVI (Ministry of Development and Housing), between the years 2010 and 2016, in the state of Quintana Roo more than 220 thousand mortgage loans were granted, with which it is calculated that it is necessary to build between 30 thousand and 40 thousand homes per year to meet the demand for real estate.

2. It is a widely diverse market, since not only Mexicans buy in this place, but also people from the rest of the world. Reason why you can find homes from 400,000 pesos to 4 million dollars.

3. The growth and surplus value of this place is impeccable, as according to the CEO of the Cancun Real Estate Expo, throughout the Riviera Maya region the surplus value increased by 30% in a span of a year and a half.

4. Due to the excellent and warm climate of Cancun, it is not surprising that this city receives        tourists all year round, not only during the summer. So the volume of tourists looking for places to stay is always large.

5. Just as there is a variety of houses, the people who visit and live in Cancun are very diverse. Here you will find people of all ages, economic capacities and conditions, so finding a niche in the market is a simple task, since there is a public for everything.

6. With more than 23,601,509 passengers, Cancun Airport is the second busiest in all of Mexico with an average of 500 daily, national and international flights.

7. The economy of the state of Quintana Roo is in a fairly healthy position, as more and more Mexicans live in this state, thanks to its strong and solid tourism and real estate sector, the first and second economic activity in the state, respectively. The stronger your tourism, the greater the demand for real estate on site, so you need to create enough inventory to meet this demand.

 

​

2. Playa del Carmen
The cost of living in Playa del Carmen - and in all the areas that make up the Riviera Maya - is extremely affordable, and offers buyers a fabulous lifestyle for a fraction of what it would cost you in other parts of the Caribbean.

When you buy real estate in Playa del Carmen, you can also enjoy the many unique charms of this city, such as its wonderful beaches and all the modern advantages it offers you.
There are hundreds of shops, restaurants and entertainment options along Fifth Avenue, not to mention a large and ever growing expat community in Playa del Carmen, for all of this the real estate market is in high demand and always in. Constant growth.

​

Puerto Aventuras 

Located just 30 minutes south of downtown Playa del Carmen, is Puerto Aventuras an exclusive private community with marina, beach and golf course offers a more intimate and private atmosphere.

It's easy to take a walk or golf cart ride through the many luxury villas and condos in Puerto Aventuras, as well as the many shops and restaurants around the international marina.

Similarly, it is very easy to request the services of the different tour operators in Puerto Aventuras, while the professional golf course within the development, designed by Thomas Lehman, and the second largest coral reef in the world are located in front of the shores of this private community.

​

​

3. Tulum
Last but not least, the eco-chic city of Tulum is home to the best beaches in the world and the ancient Mayan city of the same name, including a pyramid overlooking the Mexican Caribbean Sea.

There is a wide variety of real estate for rent in Tulum, including turnkey condos for sale and vacation homes that are designed to provide a continuous rental income, but could easily serve as your own retirement place in Tulum someday.

Despite the rustic atmosphere felt on the beachfront, downtown Tulum is also home to quite a few shopping, dining, and entertainment options, making it very easy to get lost here for as long as you need of the real world allow it.