Will The Real Estate Market In Tulum Continue To Grow?

How Mexico Became An Attractive Investment Opportunity

(00:00): Intro to Why Does Real Estate In Mexico Keep Growing?

In this post, we’re actually gonna sit down with Tony Martinez, my partner, and a developer here in Quintana Roo, in Tulum for over seven years.

In this post, one of our potential clients actually asked us:

Do you think that the market will continue to be strong here in Tulum? Is investing in Tulum a good idea?

The simple answer is yes, based on a lot of research and data. If you are looking to learn more on how to invest in Tulum, this article will help you understand the ins and out of investing in Tulum, Mexico.

The video above is a short snippet video from a longer meeting that we had. This article is the full transcription of this video in case you want to read more about Tulum real estate and how the market is ever so changing here.

This post is gonna break down the reasons why Tulum will continue to grow.

(00:48): What Will The Tulum Real Estate Market Look Like In The Future?

My other concern is with what’s going on in the world right now, if you guys are, do you think that the market will stay strong in Tulum because, to me, the recession is already here and is inevitable. So that’s, that’s another concern of mine.

That’s a great question.

That’s a question that I think I had myself as well, even a year back amongst other investors. However, one of the things that we’ve seen about a place like Tulum and just in general, especially here in the Mayan Riviera and other certain tourist destinations of Mexico, is that they’re almost recession-proof because you’re not investing in one market, right?

Here, we’re not dependent on the Euro or the dollar or the peso or the Yen, etc. People come here from all over the world. That’s number one.

Number two, one of the things that we realized about vacationing is people are not willing to sacrifice themselves. We saw it during the pandemic, right?

Where it was a massive crisis all over the world, people weren’t working, they didn’t have jobs. Businesses were going under like crazy.

And what you would have thought is, Oh wow, no one’s gonna travel anymore because they can’t — they don’t have a job and the world is on lockdown.

(02:04): The Riviera Maya Set Records For Tourism

The statistics were completely different.

Tulum represented the highest amount of money spent in this entire region. People spent more money in Tulum than in any other part of the world during the pandemic.

Tulum was responsible for record-breaking tourist numbers during the pandemic. This past January, the airport of Cancun, which is the main airport where everyone comes, broke records.

Our Airbnb’s were breaking records above 70% occupancy.

(03:03): Tulum Airbnb Occupancy Rates Keep Growing

People were freaking out.

And then four months later, boom, people started coming, and then all of a sudden we went from 50% occupancy, 80%, 85%, 90% we were booked out for many many weeks.

We had to say no to some clients.

My point is that there’s a special social class that does not stop traveling and will not sacrifice the travel life. Number two is that Mexico as a country never closed its borders even during the worst time, right?

This is amazing because Mexico depends on tourism — 80% of its economy. Well, of this economy, this state, not the rest of the country, this state, 80% of it depends on tourism.

And this state represents a huge, um, percentage for the country as a whole. So the country never closed its borders. They allow tourists to come in, obviously, they try to follow the guidelines of the masks and this and that — but Covid didn’t stop Mexico.

Some resorts didn’t function at a hundred percent occupancy. They were 60% occupancy, which was enforced by the law, but they were full, you know?

(04:04): Why Is Mexico A Good Place To Invest In Real Estate?

And so to answer the question is, that people, right now, because of the economy, they need to put their money somewhere safe. And guess what? They’re investing it here in Tulum.

So your question really is a great question.

And the best way for me to answer it is we’re selling more now than we ever have. Why? Because people are thinking, you know what, I don’t wanna put my money in gold.

I don’t wanna put my money in the stock market. I won’t put my money in crypto. Everything is so volatile.

So it’s either I save it in the bank, I keep it underneath my mattress, right, and have it devaluate, or I put it into an appreciating asset like real estate.

And no matter what, over time, it’s just gonna grow, even if it does, Like for example, let’s talk about the real estate recession.

It was 2008, this area in Tulum, we didn’t see an increase in yearly appreciations, for sure. We didn’t. It was maybe 2%, 2.5%, um, but the units were renting, people were traveling, they were creating steady income.

And then as soon as we got past that, let’s fast forward to 2010, 2011, property values, boom, and then they skyrocketed. And then 2012, 13, they had, they were, you know, way above where they were, uh, you know, 15%, 20%.

So real estate is just a steady asset — especially here in Mexico, you know, and it’s, uh, it’s a great vehicle to park your money during these times. And I think that’s what’s happening, which is why we’re, we’re selling a lot more than normal.

(05:48): Mexico Does Not Give Loans — How This Effects Real Estate.

Tony, you should also explain the difference between how Mexico does not give loans – (Nick Speaking).

They don’t have loans, and they don’t print money, because that’s also important to understand that and how it affects real estate here.

Great, great, great. Um, I think many things are wrong about Mexico as we know, but, uh, it becomes a very, very friendly, business-orientated destination to have a long-term business.

Mexico does not acquire debt like the United States.

The loan industry here is super stable. Um, no one gets loans because they’re so high. And so no one has that.

In Mexico, you were taught, I was born in Mexico, okay? Your mom and dad taught you that credit cards are evil and debt is, horrible.

So you were not allowed to get it.

Like I know friends of mine that are in their mid-thirties that don’t have credit cards. And so what does that mean when you know you have situations like what’s happening in the United States right now with inflation and you know, the housing industry is going up the roof, uh, loans are, you know, interest rates going up.

Well, none of that stuff happens here because no one really owes any money.

That’s why I told you earlier that you can’t even finance here because the interest rate is just not, not attractive. Even, I have great credit, great credit. And even then, for me — my best interest is probably like 9.9%.

So anyways, that’s a good thing because that means that the economy, especially in the loan and mortgage industry, is always gonna be stable here, always.

Uh, and that’s another reason why people like the real estate market in these types of sectors, particularly in this country. We’re a neighboring country too to the US, Canada, you know, it’s a simple, flight to get here. You know that our borders are not gonna close. And that’s why more and more, foreigners are investing here.

(08:03): Why is Mexico Real Estate Attractive for Canadian and Foreign Investors?

Now, we’ve also seen a lot of Canadians, we’ve had a lot of Canadian customers high because we’ve heard that in Canada, the housing market is super high for a one-bedroom.

We had a meeting with someone the other day, and she said that the one bedroom is about, depending on where it was in Toronto, uh, anywhere from $700,000 to a million dollars for a like a, like a 900 square foot one bedroom apartment.

It was, it was ridiculous.

We have a client that has nine properties in Canada, and she actually is selling some of them to purchase some land and build a property down here because the ROI is higher here and she’s gonna be able to rent it and, and make more money from it. So we’re actually building a property for her.

Yeah, she was telling us that one of her houses rents for like $2,500 Canadian, and this house, this house is valued at like $900,000.

And she’s like, Tony, what could I do with $900,000 down there in Tulum?

You could build four units and rent them and each unit will make you $1,200 to $1,500 at the very minimum, right?

So she’s like, What?

So I could get five, six grand each month. I said, at least that’s if it only has 60% occupancy if we didn’t do a great job, you know, at renting it.

But that hasn’t been the case.

So anyways, many, many, many benefits to investing here. Uh, and those are just some of them. Um, I think right now, particularly with what we’re seeing in the world, you gotta be very smart about where you put your money.

(09:57): Set Your Own Meeting With Us

As you can see, Mexico is very different than the United States when it comes to real estate investing.

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As Tony explained, Mexico is completely different without giving out loans. So there’s not necessarily a crash. Now the supply and the demand here in Tulum are skyrocketing. Eventually, as Tony mentioned, it will even itself out just like any other type of industry, market, etc.

If you have any questions or you’re interested in making some sort of investment here in Mexico, you want to build or you want to invest, feel free to reach out to me on Instagram.