Reasons Why You Should Invest in Mexican Real Estate
With the global economy spiraling into oblivion and investors scrambling to get their portfolios under control, everyone needs to figure out how to remain afloat. While real estate has always been a good investment option, it can help you generate a fair return if you move fast. As an advocate of contrarian investment, I think it might be a good time for you to buy up real estate in Mexico–specifically in Playa del Carmen. I’ve already written extensively about the advantages of owning property in Mexico and retiring to the country– the pandemic has provided a unique and purely financial opportunity to anyone who will consider it.
Mexico has found itself in a unique economic position–while it’s one of the countries worst hit by the pandemic, it has remained economically active. Over the past few months, American organizations have been pressurizing the country to open up industries near the border to maintain its supply chain. Additionally, this past week, the administration ordered 300 of the least affected communities to resume operations. Suffice to say that the Mexicans will continue persevering despite whatever this pandemic may have thrown their way and might even be one of the first countries to its way out of this recession.
What the economic future holds is so far uncertain for everyone because of the sheer scale of the economic implications of Covid-19. Out of this uncertainty, though, have raised new opportunities for anyone looking to invest for the long run. One such investment opportunity is getting into the Mexican real estate sector. While many people seem to be moving out of international real estate investors–I think that is what makes this the best time to make your investments. I decided to dedicate a blog to why you should consider investing in Mexican real estate, with emphasis on property in Playa del Carmen.
1. Playa del Carmen as a Hub of Tourism
The proximity of Mexico to the United States has given the country certain advantages that most other Latin American nations cannot avail. The convenience of the region and its history as a popular tourist destination for Americans has also made it a great place for other nationals to come here. Back in 2018, the Mexican tourism sector generated 22.51 billion dollars in revenues, and while it’ll take a bit before it reaches these valuations again–it will always have massive potential.
Whenever the global economy recovers and global tourism resumes operations, the tourism sector is bound to thrive. At this moment, I’m not wondering if the tourism sector will thrive–I’m thinking of when will become one of the biggest industries in the country. Playa del Carmen will become one of the hottest tourist destinations if recent trends are any indication. People are over Cancun because it’s too crowded, and demand trends show that the next tourism boom is in the Playacar region.
With rising volumes of tourists, rental incomes and property valuations will also increase drastically.
A lot of people retire to Mexico to take advantage of its low cost of living and relatively higher levels of economic development. One of the first steps to retirement is buying property in Mexico–which is incidentally one of the requirements of acquiring a Mexican retirement visa. If you’re looking to settle down in a quiet, affordable, and warm region of the world–there are few places like Playacar.
It’s really easy to settle in such a vibrant community, you’ll find decent healthcare, and live luxuriously due to the exchange rate differences between currencies. Additionally, since the country shares borders with the United States–moving around isn’t too much of an issue for many people either.
While the real estate sector in Mexico went through a major boom, the pandemic and recession have significantly lowered property demand. According to recent figures, property prices in the country have fallen by as much as 30%, reaching their lowest in recent history. This might be a signal for many that they should move out of the market–but I beg to differ.
At the beginning of this piece, I spoke about how the Mexicans are fully committed to resuming economic activity because they can’t afford to slow down. With the Americans pushing for greater economic activity–there’s no way that the market will continue declining as the economy resumes in these places. Whether it’s businessmen or locals looking to move into the region–the economic stimulus in the country will attract more people into the region that might bump demand.
If you’re looking to make it out of this pandemic financially intact, you’ll need to pay greater attention to macroeconomic currents. One of the reasons I advise people to move into Mexico during the pandemic is that these opportunities won’t last for long. You’re working with a short window until more people begin to jump on the bandwagon and stimulate an investment spree that will shut out all existing opportunities and profit potentials.
Given Mexico’s accessibility to the US and the rest of the world, as well as its role as an emerging economy–it is very likely one of the first countries to recover from the economic slump. It will be one of the first countries in the world that will reopen its tourist destinations, and with its involvement in the US economic supply chain–it will be one of the first to resume production.
With these factors in mind, I find it highly unlikely that the slump in Mexican real estate will persist for long. The real estate sector has the makings of becoming one of the most expensive in the world, and anyone with the foresight to see this won’t hesitate to inject some capital into the market.
If you’re interested in buying property in Mexico, you should get in touch with the people over at SIMCA Mexico. The company is a leading property development firm and has handled some of the biggest property projects in the country including Cancun, Tulum and Playa del Carmen. They are offering people prime real estate in Playa Del Carmen and will handle all the formalities required to buy property in the region.
I hope you enjoyed reading: Reasons Why You Should Invest in Mexican Real Estate. Please contact our Mexican Partners HERE, SIMCA, they are always available to help! I have also added some additional articles on Mexico that I’m pretty sure you will love!
Mikkel Thorup is the host of The Expat Money Show podcast and Director of Content at Escape Artist. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. He has spent nearly 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. For more information on his legal (but creative) tax strategies for Expats watch this free video.
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