Mexico's Caribbean and major real estate investment opportunities.

Maybe investing in real estate is one of the hardest decisions an investor makes. There are risks, opportunity costs, cost assessments that must be done beforehand and this can be overwhelming.

Therefore, here we bring you information that can help you when considering investing in real estate. In addition, we tell you why the Mexican Caribbean is in the sights of so many investors today.

Discover the great opportunities you have in front of you in these Caribbean paradises.

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Investing in Real Estate in the Mexican Caribbean

Investing in real estate is not a simple decision; to do it correctly, you must know the advantages of each place.

These are the benefits that the Mexican Caribbean offers when acquiring a property in it.

Strategic location

Due to its tourist importance, the Mexican Caribbean has focused on offering efficient routes of connection both in its cities, as well as with other places in Mexico and the world, this with the aim of facilitating both local vehicular traffic, as the entry and exit of tourists visiting this part of the country.

Steady growth

The Mexican Caribbean is the region of most recent tourism development, so it is also the one that has grown faster in recent decades, creating infrastructure and first-rate services.

A clear example of this, undoubtedly, is Playa del Carmen, a region that, thanks to the beauty of its beaches and other attractions, has become one of the cities with the greatest tourist potential in the country, which is reflected in its economic growth. Increase in value.

The constant tourist activity has benefited the growth of other industries, such as automotive, manufacturing and real estate, the latter being one of the most advantageous to investors.

The importance of the Mexican Caribbean for vacation and living, urban growth and improvement to the services and infrastructure mentioned above, as well as the high demand for housing, They have allowed the value of this increase thanks to the increase in surplus value is a profitable investment.

If you plan to invest in real estate, doing so in the Mexican Caribbean will be very convenient, since in addition to being properties with high value, you can generate returns through holiday income, because thanks to the tourist influx, it will be very easy to rent it for short periods (1).

Tulum and Playa del Carmen, in the top 5 cities to invest in real estate

Tulum and Playa del Carmen are on the list of five cities in Mexico with potential to invest in real estate. They are considered as ideal options to acquire a property, either to live or rent corporate or commercial spaces.

According to the Mexican Association of Real Estate Professionals (Ampi), during the first quarter of 2021 alone, this region reached an investment of more than 91 million dollars in the sector. In fact, in the last seven years Tulum has had an increase of 900% in its real estate offer, since it already has more than 214 developments offered.

In that sense, Alonso Andrade, director of HEI Community, stressed that to make the best decision in terms of real estate, the market, financial projections and feasibility of projects must be analyzed. "Today technology allows us to digitize the real estate industry to make decisions focused on our goals and lifestyle. Thanks to this study we confirm that Mexico is the ideal destination to invest and that it adapts to what domestic and foreign consumers are looking for" (2).

Rate of return: How is it calculated in real estate?

What should never be lacking in an investor’s portfolio is a repertoire of real estate to diversify their investments. Knowing data such as profitability, return on investment and, above all, the rate of return, will allow you to choose the best option and provide greater profits from the capital invested.

Formulas for calculating the rate of return

The data we need to know to determine if an investment is profitable to our satisfaction is the return on investment. This indicator is also known as ROI Return on Investment (ROI).

We have to distinguish between two variants of the same indicator. One allows us to measure gross and net profitability. The mechanics used to calculate the gross ROI are as follows: Gross ROI = (Total income/ Investment) x 100

The net rate of return is calculated in much the same way. The difference with the gross amount is that other essential expenses are included net, which are incurred for the collection of income and the payment of obligations.

Once we have identified the costs, we will proceed to subtract them from the total income. We will divide the result by the original investment amount. This new ratio is multiplied by 100 to obtain the net percentage of yields. Net ROI = ((Total income - Expenses) / Investment) x 100

The rate of return allows us to know what is the profit or loss of an investment (3).

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