Located in the heart of Mexico’s popular Riviera Maya, Playa del Carmen is one of Mexico’s hottest real estate investment locations. The market is flourishing and experiencing a surge in demand for residential properties.
What are the Benefits of a Real Estate Investment in Playa del Carmen?
The Village, in Corasol close to Playa del Carmen by Smart Money Homes partner Origina
Rental Income Potential
The thriving tourism industry in Playa del Carmen translates to a high demand for rental properties. Owners and investors with the right type of condo have the chance to generate substantial rental income.
A good example of this is Paravian, a project in Playa del Carmen. It features studio and one-bed condos close to both the beach and downtown Playa. Thanks to the great location and top-class amenities, we’re estimating that Paravian units could produce a gross rental yield of more than 16%.
Smart Money Homes has worked with some of the best developers in the area, such as Origina, GrupoR4, and Grupo Emerita. So, we’re able to offer our clients the type of condos that can maximize rental income in Playa del Carmen.
High Return on Investment
Investors in Playa del Carmen who buy the right property at the right price can anticipate significant capital gains. The region’s demand for property and its burgeoning tourism industry makes it an attractive investment opportunity.
This continues to be the case and Playa del Carmen’s real estate market continues to grow. In 2023, according to the Federal Mortgage Company (SHF), real estate valuations in the area increased by 16.8%.
This is the 5th highest growth rate in Mexico.
Stable Political Climate
Mexico’s stable political and economic environment provides a secure backdrop for investors, looking to invest in real estate overseas.
There has been a peaceful transition of power between Mexican presidents since 1934. This makes Mexico really stand out from other countries in the Latin America and Caribbean region.
Growing Tourism Industry
Playa del Carmen’s popularity as a tourist hotspot translates to an almost year-round demand for rental properties. This is appealing to investors who can rent out their homes as well as using them for vacations.
In 2022, Cancun International Airport saw a record 30.3 million passengers and numbers in 2023 are set to be even higher. The most recent count was at the end of July, and it showed that Cancun International Airport had already seen more than 19.5 million passengers.
High-Quality Infrastructure
Playa del Carmen and the Riviera Maya region boast world-class infrastructure, including excellent transportation, high-speed internet, quality healthcare facilities, and modern shopping centers. This excellent infrastructure is a big part of the reason why the Riviera Maya has done so well, and should continue to grow.
The government and local authorities are aware that strong infrastructure is a vital component in attracting tourists to the region.
That’s why they’ve committed to investing in infrastructure in the Riviera Maya region. Perhaps the best example of this can be seen in the Tren Maya.
The Tren Maya is a $7.4 billion dollar project. Spanning 948 miles, it’s a railway which will connect the region. Scheduled to open in December 2023, the train will link the popular tourist destinations like Playa del Carmen and Cancun, with historical sites and other parts of the region which were previously hard to reach.
Factors to Consider Before Buying Real Estate In Playa Del Carmen
Image Source: iStock. Have a clear idea about the type of real estate you want before you buy in Playa del Carmen.
Budget
Clearly define your budget, including upfront costs like taxes, legal fees, and maintenance expenses. If you’re buying with a view to generating rental income, be sure to have money set aside for times when your property isn’t occupied – and don’t rely on rental income to cover significant outgoings like a mortgage.
Location
Look for properties in tourist-centric areas with high rental demand, such as those near the beach, shopping centers, and tourist attractions. For example, most tourists want to be close to 5th Ave, which is where you can find a lot of the most popular bars and restaurants. Buying real estate close to 5th Ave will make your home a popular rental choice.
Legal Considerations
Understand the legal requirements for property acquisition and ensure clear property titles. Finding a local lawyer who you can trust will make things easier.
We’ll go into this in more detail a little later in the article.
Property Management
Evaluate the cost and logistics of property management. This will help you decide whether to self-manage or hire professionals. If you choose to hire a property management team, be sure to check their track record and request testimonials.
Why Playa del Carmen’s Real Estate Market is Booming…
Image Source: iStock. With miles of Caribbean beaches and a warm climate throughout the year, tourists head to Playa del Carmen all year.
Life’s Good in Playa del Carmen
Playa del Carmen offers an accessible route into life on the Caribbean. With warm weather throughout the year and great beaches, it’s no wonder Playa del Carmen is drawing comparisons with Florida.
The white-sand beaches are incredible, some of the best in Mexico. Indeed, Punta Esmeralda was recently named the best beach in Mexico and one of the top 5 beaches in the entire Latin Caribbean region. Punta Esmeralda is a west facing beach and a favorite of the Smart Money Homes team. As well as swimming, it’s the perfect spot to watch the sun go down over the Caribbean Sea.
Cultural Richness and Lifestyle
Playa del Carmen is in an area rich in Mayan heritage. Residents and visitors can immerse themselves in this cultural richness, experiencing the traditions that have shaped the region for centuries.
Although the most famous sites are elsewhere, you can find cultural treasures within Playa itself, such as the Portal Maya sculpture. There’s also lots of museums and galleries to visit.
Further afield you can find Mayan temples such as Chichen Itza and other historic sites. For a guide to the best Mayan sites in the region, click here.
Previously, visiting these sites required either hiring a car or going by taxi/bus. The Tren Maya will make getting to them easy and convenient.
Outdoor Activities and Natural Beauty
Nature enthusiasts are spoiled for choice in Playa del Carmen. Pristine beaches, crystal-clear cenotes, and lush jungles provide a backdrop for a myriad of outdoor activities.
We recommend that you visit the world’s second largest coral reef, located in the waters close to Playa del Carmen. The warm, clear water is home to some of the best diving sites in Mexico. You can expect to see miles of brightly colored coral reef, wrecks and an abundance of tropical fish.
Viator has put together a list of the best diving packages in Playa del Carmen, covering all ability levels.
Education and Healthcare
For families considering a move to Playa, education and healthcare are crucial factors. In Playa del Carmen you can find a range of international schools with bilingual programs, ensuring a quality education.
Most expats prefer to send their children to private schools, and you’ll want to ensure that the school you choose is an SEP certified school. The SEP is the Secretary of Public Education, and it issues accreditations to schools allowing them to provide valid diplomas at the end of their educational programs. In short, you’ll want an SEP certified school to get a valid qualification.
Some of the best schools in the area include the Waldorf-based Ak Lu’um, Colegio Ingles, and Colegio Montessori.
Additionally, modern healthcare facilities mean you can be sure of receiving suitable medical care. Hospiten, in Playa del Carmen is the biggest and most advanced hospital in the area. English is widely spoken and services include emergency care, general surgery, pediatrics, radiology, urology, general medicine and more.
Potential Pitfalls and Mitigation Strategies
Image Source: iStock. Buying pre-construction or new buildings ensures you don’t have to worry about poorly maintained buildings.
While Playa del Carmen offers some lucrative opportunities, potential pitfalls must be navigated carefully.
Foreign Ownership Restrictions
Certain areas may have restrictions on foreign ownership, requiring the use of a bank trust or local partnership.
For example, foreign individuals are not allowed to own land in any ‘restricted zones’ as set out in Article 27 of the Constitution.
These restricted zones are anywhere within 100km of a national border or within 50km of the coast.
A foreigner who wishes to own real estate in one of these zones needs to use a bank trust known as a ‘fideicomiso’.
This is a vehicle which allows the bank to become a trustee. The trust holds the ownership title and grants the foreigner rights to be able to use the property, sell it, mortgage it, rent it, and also inherit. The property is owned fully by the buyer and is not classed as an asset of the trustee bank.
Your attorney can explain this in detail for you.
Permit Delays
Bureaucratic processes can lead to delays in construction or renovations. Working with experienced local professionals can mitigate these delays.
Coastal Regulations
Strict environmental regulations near coastlines can limit development options. Prior knowledge of these regulations is vital for planning.
Property Condition
Older properties may require significant maintenance or updates. Thorough property inspections can uncover potential issues before you sign anything.
Buying pre-construction with a quality developer negates this problem and is another reason why well-constructed new-builds in Playa del Carmen are so popular.
Tips for Successful Real Estate Investment in Playa del Carmen
Image Source: iStock. Speak with the Smart Money Homes team for expert advice on real estate in Playa del Carmen.
Define Your Objectives
Clearly outline your goals, whether it’s short-term rental income, long-term residency, or a mix of both.
Research the Market
Understand the local market dynamics, pricing trends, and growth potential. The Smart Money Homes team can provide valuable insights. Please contact us here, to learn more about real estate in Playa del Carmen.
Engage the Smart Money Homes Team for Expert Advice
The Smart Money Homes Team have experts with in-depth knowledge of Playa del Carmen who can guide you through the local market.
Evaluate Infrastructure
Ensure that the chosen property is in an area with adequate infrastructure and services, catering to your objectives. If you’re planning to rent to tourists, make sure your property is in an area where tourists like to spend time.
Assess Growth Potential
Investigate the long-term growth potential of the chosen area. Upcoming development projects and economic prospects can influence your investment’s future value. In Playa del Carmen, the Tren Maya, and recent big infrastructure projects such as the International Airport paint a bright picture for the future.
Visit Playa del Carmen
If possible, visit the locations before deciding. Familiarize yourself with the neighborhoods, amenities, and overall atmosphere. Speak with the team at Smart Money Homes for information on what to do and where to buy.
Analyze Additional Costs
Beyond the purchase price, factor in additional costs like furniture, maintenance fees, and legal expenses. A comprehensive budget is vital to ensure you don’t get caught short.
Conduct Thorough Inspections
If you’re not buying pre-construction or new property, then a professional inspection of the property is crucial. Identify potential issues and negotiate repairs before finalizing the deal.
Plan Financing
If you’re financing your purchase, thoroughly understand the terms of the loan, including interest rates, repayment terms, and associated costs.
Plan for the Future
Anticipate how your needs may evolve in the future. Consider the dynamic growth of Playa del Carmen in your long-term plans. For example, if there’s high demand for luxury 2-bed condos close to the beach, then it should be easier to sell.
In Conclusion
Playa del Carmen presents a wealth of opportunities for real estate investors. The region is thriving economically, and tourists are arriving in the millions each year.
Thanks to the stunning beaches, investment in infrastructure and commitment to sustainable development Playa del Carmen is likely to be a popular place to invest in real estate for many years to come.
Smart Money Homes provide our clients with the best deals, and we only work with trusted developers with a proven track record.
As well as major real estate projects, we have new and exclusive deals arriving all the time. These sell out fast, but if you contact our team, we can tell you what’s currently available.
