Is buying property in Mexico a good investment?

Indeed, buying property in Mexico can be a rewarding investment. The country’s expanding economy, vibrant property market and opportunities for rental income and capital growth make it an attractive choice for investors.

In addition, it is safe to buy real estate in Mexico because of the legal framework that protects foreign investors. Whether buying directly or through a bank trust (fideicomiso), buyers can feel secure in their investment. Favorable exchange rates also make buying property in Mexico more accessible to international investors.

Is it a good time to buy property in Mexico?

Yes, now is a promising time to invest in real estate in Mexico. The country’s robust economic growth and positive business sentiment are contributing to a thriving real estate market. Investors can benefit from high rental yields, especially in popular areas like Mexico City and beach destinations like Tulum, Playa del Carmen or Cancun, making property purchases an attractive proposition for generating steady rental income.

Moreover, real estate market is seen as a reliable hedge against inflation, with property values likely to increase as prices rise. Despite some concerns, such as the financial well-being of the population and stable country conditions, the overall outlook remains favorable.

Pros of buying property in Mexico

There are several reasons why you should consider buying property in Mexico. However, in this article we will focus on highlighting three pros. The economic growth of areas of the country such as the Riviera Maya, the strength of the real estate market and the high return on investment will be the arguments we focus on. 

Growing economy

Mexico’s economy is showing positive signs of growth, which bodes well for real estate investment. The IMF estimates a growth rate of 1.8% for 2023 and 1.6% for 2024, with a projected increase of 8.3% over the next five years, averaging 1.7% per year. This steady economic expansion provides a stable foundation for investors, offering predictability and making it easier to plan and manage risk.

Contributing to this robust growth are Mexico’s diverse economic sectors, including manufacturing, technology and tourism. A thriving economy supports a healthy real estate market, leading to potential increases in property values over time. As these sectors continue to develop, they create employment opportunities and attract investment, further strengthening the economy.

For investors, moderate and sustained economic growth is ideal as it indicates a stable and sustainable environment. This stability can lead to a gradual increase in property values, making Mexico an attractive destination for real estate investment. Monitoring economic indicators and understanding the broader economic context can help investors make informed decisions in this promising market.

Strong real estate market

Mexico’s real estate market is experiencing significant growth, fueled by increasing foreign investment, thriving tourism, and relatively low real estate prices. Popular areas such as Puerto Vallarta and the Riviera Maya, including Tulum and Playa del Carmen, are hotspots for international buyers seeking vacation homes or rental properties.

Urban development and infrastructure improvements, such as new highways and improved public transportation, have also increased the attractiveness of Mexican cities. These improvements contribute to a better quality of life and higher property values, attracting both residents and investors. The booming tourism sector continues to fuel the market, especially in coastal and historic regions where vacation rentals are in high demand. These properties offer attractive rental yields and appreciation potential.

High return of investment

Investing in real estate in Mexico offers a high return on investment, especially through vacation rentals. With over 34 million tourists visiting annually, there’s a strong demand for unique vacation properties. Prime locations such as beaches, historic cities, and major attractions can command higher rental rates, maximizing your income potential. Platforms such as Airbnb simplify the rental process, provide a global audience, and increase security for property owners.

To evaluate potential profits, consider the rental yield – annual rental income divided by the property price. Mexico’s rental yields, which range from 6.3% to 9.0%, are highly competitive and often exceed yields in other markets.

For expert advice, contact Jaguar Tulum Real Estate.  We specialize in Mexican Real Estate and offer free advice call to answer any questions you may have regarding buying real estate in Mexico.