NEWS

1. Introduction

Riviera Maya, located on the eastern coast of Mexico, is one of the fastest-growing tourist destinations in the world. Golden beaches, turquoise waters of the Caribbean Sea, and rich cultural heritage attract hundreds of thousands of tourists annually. This popularity makes the real estate market in Riviera Maya a subject of interest for investors from around the globe.

This report conducts an analysis of the return on investment (ROI) and profitability of real estate investments in Riviera Maya, taking into account economic, social, and touristic factors.

2. Methodology

The following metrics were used for analyzing the return on investment and profitability of investments:

• ROI: Calculated as the ratio of profits to investment costs, expressed as a percentage.

• Payback Period: The time needed to recover the total invested amount.

• Passive Income: Income generated from the property after deducting maintenance costs.

• Property Value Appreciation: Estimation of potential future property value growth.

3. Analysis of Results

The results of the analysis show that investments in real estate in Riviera Maya have profit potential but require thorough evaluation and planning.

• ROI: The return on investment from Riviera Maya investments can be high, especially if the property is rented to tourists for most of the year. The average ROI ranges from 7% to 12%, but it can be higher for some luxury properties or in popular locations.

• Payback Period: The payback period for investments typically ranges from 5 to 10 years, depending on the size of the investment, location, and property utilization.

• Passive Income: Investments in Riviera Maya real estate can generate stable passive income from short- and long-term rentals. However, maintenance-related costs such as management fees, conservation, and taxes may affect the final income.

• Property Value Appreciation: The real estate market in Riviera Maya is dynamic, indicating potential property value growth in the long term. However, property value appreciation may be subject to economic changes and regulatory amendments.

4. Conclusions

Investments in real estate in Riviera Maya can be an attractive option for investors seeking diversified investment portfolios. However, the decision to invest should be preceded by a thorough analysis of risks and potential returns. Key factors to consider include property location, market conditions, political stability, and regulations concerning foreign investments.

Despite certain risks associated with foreign investments, Riviera Maya remains one of the most attractive real estate markets in Mexico and Latin America.

Sources

"Investing in Riviera Maya Real Estate: What You Need to Know" - Forbes

"Riviera Maya Real Estate Market Analysis" - Global Property Guide

"Tourism in Riviera Maya: Trends and Forecast" - World Tourism Organization

"Understanding ROI in Real Estate Investments" - Investopedia

"Factors Affecting Property Investment Returns" - Journal of Property Investment & Finance

Can foreigners buy beachfront property in Mexico?

Originally the Foreign Investment Law would stop expats buying properties that were within 64 miles of an international border or 32 miles from the shore. However, this was amended in 1993 — meaning that the idea that foreigners have restrictions when buying property in Mexico is nothing but a myth.

Step 1: Find the right property and agree a price with the seller

If you want to own property in Mexico, the first thing you’ll need to do is find the perfect place. Work with a credible realtor to find the property or land you want to buy, and open negotiations on the price you’re willing to pay. Once you come to a mutually acceptable deal, you’ll be ready to start the formalities.

Step 2: Document the deal with a sales contract

Your real estate agent or solicitor can help you to pull together a sales contract which documents the terms and conditions of the sale, as well as the final price you’ve agreed. The exact form of this contract may vary somewhat depending on local customs in the area you’re targeting, so getting professional support and advice is essential.

Sales contracts — and all the other paperwork involved in buying a property in Mexico — will be in Spanish. It’s common for realtors to provide an English reference copy for you to check, but it’s also important to know that the Spanish copy will be the legally binding version. Read it through or have a Spanish speaking friend take a look to be sure of the content.

Step 3: Pay your deposit

Once you’re happy with the sales contract, you’ll need to make a downpayment — this is usually around 5% - 10% of the sale price.

Step 4: Create your fideicomiso if required

If you’re buying property or land within the restricted zones, you’ll need to either create a fideicomiso or have the previous fideicomiso transferred to your name. Fideicomiso instructions last for 50 years, so if you transfer an existing arrangement to your name, you’ll need to check how long it’s valid for, and renew in good time.

Step 5: Get permission to complete the purchase

Your notary will step in at this point to complete the next few steps. You’ll need to seek permission to complete the purchase and sign an agreement that you’ll be bound by Mexican law in any real estate dealings.

Step 6: Complete valuation and due diligence checks

Your property will be valued for tax purposes, and any further surveys or checks should be carried out at this stage. Usually your notary will be able to arrange all of these requirements on your behalf.

Step 7: Sign the escritura, pay all final taxes and costs

The escritura will ultimately become your title to the property once you’ve finalised your purchase and paid all the outstanding costs. You’ll need to visit your notary to sign the escritura, and pay all the outstanding costs. The property registration process will start as soon as you’ve made the final payment.

Step 8: Ownership will be registered within 3 months of closing

Congratulations! You now own your property in Mexico. Your legal rights to the property or land will be registered within 3 months from closing the deal.

A fideicomiso is a bank trust which is used to allow foreigners to legally buy land in areas close to the beach or national borders.

Since the rules about foreign ownership of prime land were relaxed in 1993, foreigners have been able to set up a fideicomiso which gives them indirect ownership of restricted land through a trustee. While the trustee is the legal owner of the land, the beneficiary of the trust maintains all rights to sell, lease or pass on the land.

The real estate market on the Yucatan Peninsula is experiencing dynamic growth of investment interest, as confirmed by the latest statistical data. According to a report published by the Real Estate Development Agency (REDA), there has been an impressive 30% increase in interest in properties in this area over the past two years.

The tourism sector plays a key role in driving this growth. Statistical data collected by the Yucatan Peninsula Tourism Office indicates that the number of tourists visiting the region has increased by 25% over the past year. This dynamic development in the tourism sector leads to a growing demand for properties near popular attractions, such as the Mayan ruins in Chichen Itza or the heavenly beaches in Tulum.

Furthermore, economic data shows stable economic growth on the Yucatan Peninsula. According to the Ministry of Regional Economy, the region's economic growth rate reached an impressive 5% in the last year, translating into increased investment activity from companies and entrepreneurs.

Property prices on the Yucatan Peninsula remain competitive compared to other popular tourist regions in Mexico. The average price per square meter of an apartment in city centers currently ranges from $2,000 to $3,000 US dollars, making this region attractive to investors from various social and economic groups.

The future prospects are promising, and the growing investment interest heralds further development of the real estate market on the Yucatan Peninsula. Statistical data indicates that it is currently one of the fastest-growing real estate markets in Latin America, making the Yucatan Peninsula a place of immense investment potential.