The growing popularity of Mexico’s entire Riviera Maya region is undeniable, with tourism numbers on the rise all the way from Cancun to downtown Playa del Carmen, Puerto Aventuras and Tulum in the Mexican Caribbean, creating an ideal environment for real estate investment, especially when it comes to income producing property like vacation home rentals. Here are my first 10 reasons why the Riviera Maya real estate investment market will continue to expand, offering an ideal market for making money with vacation homes. Be sure to check back in a few days for Part 2 of this blog!
1. Best Beaches in the World
This area is one of the top 10 beach vacation destinations in the world, according to Forbes, Coastal Living, Travel Pulse and Harper’s Bazaar, to name just a few of the many accolades this region has received. 2017 saw no signs of the region’s popularity among international travelers slowing down, with hotel occupancy rates on the rise and new flights into the Cancun International Airport offered by airlines like Southwest, Delta and Spirit, it’s easy to see why nearly four million visitors came to the Riviera Maya during the first nine months of 2017. The beaches also here have some of the whitest sand in the world, which never gets hot due to its high silica content, so long walks along the coast are a must!
“[The Riviera Maya] is a quintessential beach destination for travelers on the hunt for perfection”, wrote Forbes.
2. Booming Tourism Industry
A whopping 70 percent of all tourism dollars in Mexico is spent in the Riviera Maya region and numbers are still on the rise.
“Cancun’s 3.7 million visitors over the first nine months of the year signal a 2.8 percent jump from the same period last year, while Riviera Maya’s 3.9 million tourists mark a whopping 8.5 percent rise over the first nine months of 2016”, wrote TravelPulse.
3. Hot Real Estate Market
Considering its popularity among travelers worldwide, it’s really no surprise that the Riviera Maya is also one of the hottest real estate investment markets in the world. The region is experiencing a boom in residential real estate in response to the area’s safety, modern infrastructure and – of course – it’s stunning natural beauty.
“Prices have risen about a third in the past five years on the Riviera Maya”, wrote the Financial Times. “Demand has also risen, with sales increasing 25 percent a year for the past three years”.
4. High Occupancy Rates
The Mexican Caribbean, which includes more than 80 miles of pristine coastline stretching south from the Cancun International Airport through downtown Playa del Carmen, Puerto Aventuras and Tulum, boasts consistent average occupancy rates of 80-90 percent for all 12 months of the year.
“From January to October of 2016 there was an average occupancy of 81 percent in the area’s nearly 43,000 hotel rooms”, wrote Riviera Maya News. “During the same period in 2017, the average is 83.4 percent”.
5. 10% Average Return on Investment
Vacation rentals in the Riviera Maya are currently paying investors an average of 10 percent annual net return on investment, which beats the stock market handily when you factor inflation into the equation. What’s more, the rental income can be paid in US dollars and is easily transferred to investment accounts outside of Mexico.
These innovative new developments offer buyers access to “No Worries, No Hassles Ownership”, as well as a healthy return on investment spanning between 8-12 percent with absolutely no concerns about property management, maintenance or rentals.
6. Unbeatable Growth
Mexico’s Riviera Maya is the fastest growing tourist market anywhere in the world and Playa del Carmen is the fastest-growing town in Latin America, with Tulum close behind in its own big development boom.
“International tourists, local tourists, government investment, foreign investment, strong track record, lots of English-speaking workers, and excellent infrastructure all make for a great market for real estate investment”, wrote Live and Invest Overseas. “Net rental yields in Playa del Carmen are pushing into the double-digit range”.
7. Excellent Appreciation
In addition to offering excellent rental income, property appreciation in the Riviera Maya is currently averaging at least 10 percent annually, with no signs of slowing down.
“Since 2012, prices across the state of Quintana Roo [where the Riviera Maya is located] have risen 16 percent”, wrote the Financial Times. “In the third quarter of 2016, prices had risen 26 percent over the same period in 2012”.
8. Low Property Taxes
At just 1/10th of one percent annually, the property taxes in the Mexican Caribbean present another pretty compelling reason to consider buying property in the region. Owed to the municipality where the investment property is located, the annual property taxes often only run a few hundred dollars per year.
9. Portfolio Diversification
If your portfolio is heavily weighted in traditional investments like the stock market, bonds and mutual funds, buying property can also provide a level of financial security by offering a much-needed hedge against inflation and a secure, brick-and-mortar investment to counter the volatility of intangible holdings that are subject to sudden market fluctuations.
10. Stable Mexican Cash Market
The conservative and highly stable cash market in Mexico is not reliant on credit and mortgages, which lends an added layer of security to real estate investing.
“Mexico’s economic fundamentals are strong”, wrote the International Monetary Fund. “The outlook for the Mexican economy foresees steady growth underpinned by strong macroeconomic policies, broad reform initiatives and strong balance sheets”.
Remember to look for Part 2 of this blog in just a few days to see 10 more reasons to buy a turnkey vacation home rental property in Mexico’s Riviera Maya.
Are you thinking of buying an investment property? Share your thoughts in the comments!
Read 5 Reasons it’s Safe to Invest in Real Estate in Mexico and see what buying property in the Riviera Maya really looks like.