When foreigners hear the word “Mexico,” they might think of beautiful beaches, vacations, tacos, tequila, street food – “real estate investment” might be pretty far down the list. However, many national and international real estate investors find Mexico attractive. This can be attributed to several factors: geographic location, richness and variety in natural resources and ecosystems, a high return on investment (ROI), and diverse investment options. Whether they want to retire, buy a vacation home or a rental property, Mexico can provide beneficial deals in all cases.
It is known that Mexico’s coasts are beautiful but lively, colorful, and accessible to foreigners from all over the world. However, they are far from being the only worthwhile destinations the country offers. Big cities, such as Guadalajara and Mexico City, are great places to invest in thanks to their constant, stable economic growth, as well as their cultural heritage and a wide variety of social and entertainment opportunities.
Of course, investing in a property is not only high in cost, but it can also be risky. There are many factors to maximize this investment in Mexico; people might want to consider prices, weather, cultural access, capital gains, accessibility, etc. In this article, I will focus on three things: annual return on investment, capital gains, and the destination’s lifestyle.
Of course, many destinations have all three; in this article, I highlight five of them.
Tulum, Quintana Roo
Tulum is a coastal town located in the southeast and the southernmost point of what we call the Riviera Maya. Not far from the border with Belize, Tulum, once a Maya city, is now one of the top tourist destinations in the country. Its beautiful white sand beaches and the clear, blue Caribbean provide a resting place for well-preserved Maya ruins dating back to the 13th century.
Thanks to the construction of a new Tulum airport and the development of the Maya Train, the area will experience an economic push forward, causing an inevitable rise in real estate demand. Price ranges vary between apartments, houses, luxury homes, and condos.
ROI in Riviera Maya is around 6.6 percent yearly, and Tulum has some of the highest projected capital gains in the country, 7-11 percent. Between 2019 and 2021, the average ROI from renting in Tulum was between 8 and 15 percent.
Puerto Vallarta, Jalisco
Puerto Vallarta is another coastal town to the west and right about the country’s middle. It is located in the state of Jalisco and adjacent to the Riviera Nayarit, which includes other beach towns such as Sayulita, San Francisco, Punta Mita, and San Blas. Puerto Vallarta’s beaches, culinary world, and luxury resorts make it a highly attractive and beautiful destination. Additionally, The Puerto Vallarta International Airport facilitates tourism and ensures the town remains connected to the rest of the world.
Thanks to the high influx of tourism, the cultural and leisure offerings, and the geographic area, Puerto Vallarta and Riviera Nayarit are becoming one of the biggest real estate markets in the country and the rest of the world. Investing in one of these properties could provide an annual ROI of 8 percent.
Mérida, Yucatán
(Estefania Cortes/Unsplash)
Mérida is located in the Yucatán Península, in the southeast of Mexico, and a 30-minute drive from the coast. It is surrounded by important archaeological and historical sites and stationed in the middle of the most important exporting, importing, and tourism ports in the southeast of Mexico. This, in combination with the boom in real estate demand and development it has experienced in recent years, makes Mérida a very attractive option. Additionally, it is considered one of the safest places in Mexico to live and visit.
Mérida has a significant amount of foreign investment, which has caused an improvement in the quality of its developments. Plus, according to El Financiero, this destination has an availability of more than 47 thousand estates to be purchased.
Properties at this destination have a projected capital gain of 12 to 20 percent, which could go as high as 25. The ROI in Mérida is currently around 8 percent.
Guadalajara, Jalisco
Guadalajara is the capital city of the state of Jalisco, located on the west coast and the birthplace of mariachi and tequila. The city is also home to 5.3 million people, according to the 2020 national census. Guadalajara offers a big city feel without being overwhelming, with sound public transportation systems and walkable distances. It is affordable, picturesque, and delicious, only 4 hours away from the coast. Its culinary street world is endless, and its museums provide more than a fair share of entertainment and culture.
Guadalajara is also the fourth city with the country’s biggest residential real estate demand (Real Estate Market & Lifestyle) due to its booming business opportunities and the low risk of investments. Properties in Guadalajara have a capital gain that varies based on their area, between 4 and 10 percent.
Mexico City
Mexico City is one of the world’s most extensive and most populated cities, and there’s a reason why. With an ever-changing flourish of businesses, corporations, start-ups, shops, stores, and restaurants, it provides many job opportunities and a lifestyle rich in variety and entertainment. As big and overwhelming as it can be, it is divided into many different areas with its own personality. It varies in visual and architectural design, population, attractions, food, employment types, etc.
Mexico City holds a unique historical and modern duality: it embraces centuries of history and cultural heritage while simultaneously providing an immense hub for design, art, and technology. It is no wonder it attracts so many people, temporarily and permanently.
ROI on properties in Mexico City is currently around 9.96 percent, and their expected capital gain within the city varies based on what borough (alcaldía) the property is on.
Should I invest in Mexico?
Whether investors are looking for a temporary or permanent stay, a residence or renting opportunity, a beach or city life, history or modernity, Mexico has it all. The boom in real estate the country is experiencing is only expected to grow in years to come, which makes right now the perfect time to look into these destinations.
All places mentioned in this article have different aspects to consider; some are excellent for renting, while others are better for appreciation. Yet, with thorough research, Mexico can be an excellent investment opportunity.
Montserrat Castro Gómez is a freelance writer and translator from Querétaro, México.
