Why Demand Grows And Supply Becomes Limited For The Tulum Investor

The Laws On Short-Term Rentals In Mexico

How The Government Protects Tulum Investors 00:00

Want to find out how you can buy property in Mexico and take advantage – as an investor – of the governmental protection in Tulum and make a higher ROI as a result?

Maybe you’re researching whether it is it a good time to buy real estate in Mexico or owning an Airbnb in Mexico.

Then you’ve come to the right place.

In this post, Tony Martinez sits down with our new client and discusses how the government is protecting Tulum, should I buy a condo in Mexico, and how this protection can lead to higher ROIs for short-term rentals like Airbnb.

If you’re interested in learning what it takes to make your first investment in Mexico, our Ultimate Guide To Investing In Mexico is a great place to start.

He also talks about how the market will unfold within areas of Tulum such as Aldea Zama, Region 15, La Veleta, and even areas above the highway where renting out property in Mexico is a good idea. There will be an abundance of opportunities to generate ROI in Tulum.

Where Can You Build In Tulum? 00:40

The two regions outlined in green are where you can invest or build in Tulum. If you’re looking for the price breakdown of building a home in Mexico, we wrote a great article here.

The bottom area is the closest to the coast and the upper area is on the other side of the highway. In this upper area, you don’t have subterranean rivers or reserves.

However, there are a lot of cenotes; beautiful underground caves with water. The dark blue spots on the map represent cenotes. They’re available to the public whether you want to just check out or swim.

These are great attractions for tourists – and having the right concierge service like The Tulum Vibe, you get 5-star reviews if you know how to optimize your Airbnb listing and provide quality service.

So the reality is that, yes, Tulum is going to grow. But, it’s not going to grow uncontrollably. It can’t.

To keep up with the demand of expected tourism in 2023 and beyond, twice the amount of properties would need to be listed on the Tulum market. Achieving that level of growth and expansion takes time.

So this increase in demand will likely lead to more expensive rates and thus, increased revenue for vacation rental owners like you.

How Many Floors Can You Build In Tulum? 01:35

One of the many reasons that I love Tulum is because of how the government protects this town and its inhabitants. For example, you’re only allowed to build so many floors.

In Tulum, there’s a restriction of 4 floors; you can’t build any higher than that. The construction will be limited to the zoning of the government.

They did this because they saw what happened in Cancun and Playa Del Carmen.

In 2018, a structure in Cancun collapsed on itself from the 12th floor due to heavy rain. This led to injuries, hospitalizations, and hundreds of evacuations.

You can build 7 floors in Playa Del Carmen and 23 in Cancun.

These numbers are reflective of the population densities of each town. Cancun has the highest population, then second is Play Del Carmen, and third is Tulum.

Even with a full build in Tulum, the number of people that Tulum can host is a fraction of Playa Del Carmen.

There are many downsides to high-rise buildings such as loss of green space, increased risk of damage from natural disasters, limited views, and higher maintenance costs.

With the restrictions placed in Tulum, we don’t have to worry as much about these negative factors.

Will Tulum Continue To Grow For Investors? 02:31

The construction footprint of Playa Del Carmen would be significantly larger than that of Tulum.

Tulum is 20% of all of Playa Del Carmen. Once you get past the upper right-hand side of the map you just saw above, it’s another city.

So to elaborate on your question, can Tulum grow? Yes, it will grow more. But the authenticity and value of this city will persist. Tulum is considered a Pueblo Mágico, meaning that it is a magical town.

For investors, it’s a popular destination to build and own a short-term rental business, like an Airbnb property. If you stumbled upon this post in search of Mexico Airbnb information – check out how much an Airbnb property can make annually.

In November of 2022 is when I personally started managing my own Airbnb unit and started this website and company – The Tulum Vibe.

This is actually what drove me to buy my 3 bedrooms, 3 bathroom, 2 pool Penthouse that generated over $15,000 USD in December 2022 due to my Airbnb knowledge. 👇

You can view my personal listing and read the reviews.

I own my own property management company in Tulum – where I strictly focus on getting 5-star reviews to increase ROI and occupancy rate.

The Government Protects Tulum’s Authenticity 04:10

Tulum is strong in its roots and super authentic. The government and the municipality want to keep it like that. I’ll share one last thing that happened that you’ll probably appreciate.

This piece of land right here that you see says Aldea Zama and Maya Zama:

They were going to build a golf course here, and the city got together and they said, we don’t want a golf course to be built.

This is not Cancun, this is not that type of destination. So they voted that golf course out. This happened about 5 or 6 years ago.

This showed the world that Tulum stands for something and that there’s a real purpose behind what they do. There’s the reasoning behind why you can only build four floors, why Tulum became a Pueblo Mágico, and more.

The Growth Of Tulum Has A Cap 05:17

So there are pros and cons to investing in Tulum, Mexico.

Of course, I’m invested here – and so is Nick. So I want to see growth take place because I want property values to increase. I’d like rental properties to increase.

The market is growing rapidly, but if your funds are limited – there are a few examples of how to invest $100,000 USD in Mexico that we expanded on with another client.

But at the same time, I live here. So I don’t want this place to become too wild.

But thankfully, it can’t because it does not have the infrastructure to do. So I think that it’s the good in between all.

The Authenticity Of Tulum 05:42

(Client Speaking)*

I think Tulum just has this authenticity to it, and that’s always been my thing. Even when I travel to other places, I feel like they should keep their culture. But sometimes, they tend to get Americanized. For instance, I’m Bahamian American.

We have a property over in the Bahamas, and if it’s not Americanized, you have tourists not adapting to the culture and expecting it to adapt to them. That’s not how things work.

And it kind of comes off as just disrespectful to the community and the culture. And then everything slowly but surely changes. And that’s what I don’t want to happen to the place I invest.

Tulum Will Remain Authentic 06:24

The way I see it is that there are two sides to that.

On one hand, you want your property to do well, but on the other hand, you don’t want it to be so overwhelming that it’s a tourist trap. But I think Tulum is so unique, and I think that the municipality and the president of Mexico understand that.

The president of Mexico even made a public announcement and said that he would not allow for major development to happen in Tulum and that he was going to take control of all the zoning.

You see, the zones are controlled by the state. So every state has different zoning; this is not federally controlled.

We also have an airport coming to Tulum at the end of December 2023 according to President Andrés Manuel López Obrador. And this will be a small boutique airport to maintain the Tulum feel.

The President Of Mexico’s Perspective On Tulum 07:17

The President feels that Tulum is so special and unique to Mexico, that they decided to take over the zoning and not let the state handle it.

The federal government is in charge of zoning, and this prevents corruption. A person can’t just go to the municipality and bribe someone to let them build more than four floors.

In fact, the president has concerns about maintaining Tulum and other cities from corruption as well.

He recalled that the Olmeca Maya Mexica corporation, which is administered by the Ministry of National Defense (Sedena), would operate the Mayan Train, the Felipe Angeles airport in Mexico City, Chetumal, Palenque, Tulum, and Campeche, while the one in Ciudad del Carmen will be run by the Navy.

The military organization will also oversee the new airline, which will be known as Mexicana de Aviación.

Leaving these projects to the Sedena is intended to prevent their privatization, as they were constructed with public funds.

So the president of Mexico has a lot of interest in this area, and one of the reasons is that he owns a lot of land here. He also does not want it to become a tourist trap filled with corruption.

There’s a magazine review they did on the president of Mexico talking about the airport. He says that it’s going to be a boutique luxury airport, meaning that it’s only going to host certain major cities.

If you want to learn more, check out this post to see how long the Tulum “boom” will last.