Real Estate Investment Potentials in Mexico
Amazingly enough, the Mexican real estate market is booming right now generating some of the highest levels of international investor interest in the country’s history. Reports rolling out of investment firms that are managing real estate inflows into the country tell us that these companies are making huge profits off of real estate in the country right now. People are even showing immense interest in the Mexican stock market as companies move their operations into the country after the FTA signed between the US and Mexican authorities.
Despite the bleak economic forecasts in light of the Covid-19 outbreak, analysts haven’t revised their projections for the real estate growth in Mexico. According to these forecasts, the Mexican real estate market will grow to $2.4 trillion by 2024—backed by a steady growth rate of 2.8% till then. Even more surprisingly, real estate development is going so strong that there’s an actual labor shortage for construction workers in the market!
In a world where most countries’ real estate markets have become a risky investment, the Mexican real estate market seems like a safe haven investment right now. Beyond just helping sustain the values of your investment portfolios, the amount of people looking to buy up real estate in the country, you might even make a lot of money if you buy property here.
The Reason Why Mexico is Thriving
As the Coronavirus outbreak becomes an increasingly threatening global event, manufacturers around the world are panicking. They can’t have their factories set up in places like China anymore because there’s no telling how they’ll manage the Coronavirus outbreak. The Chinese had no qualms about shutting down production, including 15% of the millions of cars produced in the country, and everyone manufacturing in China took a huge hit because of these lockdowns. As globalization and logistical flexibility began showing its limitations, a lot of these manufacturers realized that they need to move their industrial plants closer to home.
With a new perspective toward manufacturing practices, most industrial manufacturers in the US have decided to relocate their plants. They’re now moving out of China and Asia, into Mexico and Europe for easier access to their locations. This makes sense, I suppose, considering the fact that they can take a hands-on approach to their manufacturing plants and even pre-empt some of the policy changes in the region to minimize the disruption to their production cycles.
Mexico, already the second largest economy in Latin America, is a thriving hub of industrial and commercial activity. When you think of the impacts of relocating production plants in the area—you can very well expect that real estate markets will begin thriving in the region too. Once these large-scale manufacturers show up, the higher employment and income generation will induce a demand for real estate the likes of which no one’s ever seen before. With the country already generating this much attention from international investors, there are few real estate markets in the world as great as Mexico’s.
Some Questions About Investing in Mexican Real Estate
Americans and expats from around the world have been investing in Mexican real estate for a very long time. A lot of people own vacation homes in the country and Americans actually form the highest number of foreigners in the country—which is pretty ironic if you think about it. Suffice to say that it’s pretty easy for anyone to invest in Mexican real estate, but just to get started, here are the answers to commonly asked questions:
Q1) Can Foreigners Invest in Mexican Real Estate?
Yes, foreigners are allowed by law to buy and own property in Mexico—and it’s a really easy process to invest here. As of 1973, all foreigners were given the right to purchase land in Mexico—with a few restrictions that can be very easily resolved. The conditions the government has set to interested foreign investors are that if you want to buy real estate closer than 31 miles from the coast or 62 miles from a border, you must do it through a trust thru a Mexican bank.
Q2) How Affordable is Property in Mexico?
There’s no straightforward way of answering this question, the price of your houses depends on where you’re buying the house and who you’re buying it off of. However, property is much more affordable in Mexico than most —if not all—of the United States. According to estimates from the second quarter of 2019, the average home in Mexico was priced at around 1,070,650 Mexican Pesos—which comes to around $45,660.
If we were to consider this as the mean price of homes in the country, any luxury home in highly priced regions won’t really amount to much higher for sure. When you compare these property rates to the rates in the United States, the Mexican real estate market is definitely much cheaper.
Q3) What’s The Cost of Living in Mexico?
Currently, 1 Mexican Peso is worth $0.043—that basically means that the US dollar is worth about 23 times more than the Mexican Peso. If you’re bringing money in from the US or even from some European country, the odds are that your currency has much more purchasing value than the Peso itself—to make living in Mexico incredibly cheap.
You’ll probably be able to live like a king in Mexico at a fraction of the cost of what it will cost you in your home country. This is one of the many advantages that you can enjoy from moving to a country that has low valued currency—living a life of luxury is always pretty cheap.
Where To Invest in Mexico?
If you’re considering investing in Mexican real estate, then you should really consider buying up property in Playa Del Carmen. It’s one of the hottest real estate markets in the country that runs along the Caribbean Coast—giving you the Caribbean experience without the price tag. The region is already popular with many expats and retirees from around the world as a retirement destination and is home to a diverse demographic.
I’m currently working with some people at SIMCA Mexico, the leading real estate developers in Mexico. They’re offering newly developed property in Playa Del Carmen for anyone interested in buying up homes in the area. You might want to get in touch with them if you want to see what potential a real estate investment in Mexico has to offer.
I hope you enjoyed reading: Real Estate Investment Potentials in Mexico. Here are some additional articles on Mexico that I know you’ll love!
About The Author
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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