Sure, owning a vacation home in paradise sounds great, right? Being able to spend time in your very own place to get away from it all is a luxury that many would-be part-time expats are eager to enjoy, but the realities of finding a suitable investment property can feel daunting, especially if you’re considering buying real estate abroad.
It helps to look in a popular vacation destination like Mexico’s Riviera Maya, where owners are seeing 80-90 percent occupancy rates and getting excellent return on investment, but even there the real key is to find an income producing property with a management plan in place that prevents owners from having to deal with maintenance issues and rental bookings.
Here are four tips to help you find the best vacation rentals and income producing properties that will pay for themselves and offer a stress-free way for you to enjoy the best of both worlds – as a visitor and as an investor!
1. Location, Location, Location
Deciding where to invest is probably the single most important aspect of buying a second home, so do your homework and really think about the long-term prospects for growth in the region. After living and working in real estate all over the world, we’re definitely partial to Mexico’s Riviera Maya, which is one of the world’s top vacation destinations and home to the gorgeous beach towns of Playa del Carmen, Puerto Aventuras and Tulum. Regardless of where you buy, make sure it’s on the upswing and still offers a great enough value to turn a real profit. If you buy the right property in a great location, it’s possible to rake in significant returns as you enjoy excellent appreciation and all the perks of owning a beautiful vacation rental.
“Mexico remains the most popular destination for Americans seeking property beyond the borders, with more than 500,000 Americans living in the country, according to U.S. State Department figures”, wrote HGTV.
2. Maintenance and Property Management
No matter what type of property you buy or where it's located, there are bound to be maintenance issues from time to time, whether you rent it out or not. And if you do opt to rent the property to vacationers, there’s the issue of managing bookings while ensuring that everyone enjoys their stay. Of course, there are also the routine but necessary tasks of paying utilities and keeping up the grounds. In order to ensure efficiency and to maximize the property’s return on investment, we recommend properties that offer “No Worries, No Hassles Ownership,” which is an innovative new approach to property management that leaves owners free to simply sit back, collect income and decide when to come for another visit.
3. Future Lifestyle Goals
Another important aspect of buying an income producing second home is to buy in a place where you will love to vacation – not just right now, but also in the future. Look for a location that can cater to your tastes in all phases of life, that offers plenty of exciting activities but also a certain level of luxury and comfort that you will appreciate as you grow older. Generally speaking, tropical warm-weather destinations like Mexico’s Riviera Maya offer the widest appeal for travelers and families of all ages... A trend that seems unlikely to change any time soon as more people look for affordable ways to escape the frigid winter temps.
The best way to buy a vacation home abroad is to pay cash and avoid the whole mortgage mess. Not only can financing be tricky to obtain overseas, but paying interest will eat into your bottom line and reduce your overall return on investment. If you don’t have ready access to this type of cash flow in your checking account, don’t despair! Buying real estate with IRA accounts is perfectly legal and offers a fantastic way to get tax-deferred income for retirement while also owning a luxury vacation property.
Are you thinking about buying a vacation home that doubles as an investment and income producing property? Let us know in the comments!
Click below to learn more about how “No Worries, No Hassles Ownership” can turn a vacation home investment into one of the best ways to make money in Mexico real estate.