If you are considering a real estate investment, where you buy – the place where prices are lowest, or the place where prices show the most promise for appreciation? Of course you choose the second option; the better the chances for appreciation, the better the real estate investment. This is why it is a more attractive option for buyers to invest in Mexico real estate than in the U.S. market.
The fact that U.S. housing prices are at their most affordable point in possibly 40 years (compared to income, buying vs. renting comparison, etc.) has got some people exciting about buying back home, and wondering why they should invest in a supposedly cheap country, like Mexico, where prices in some areas are almost the same. The problem is that experts predict that the U.S. housing market isn’t going anywhere any time soon.
One expert, Dan Alpert, has said that low prices are „pretty much here to stay,“ and called this era of U.S. housing one of „flat pricing“ and „very, very cheap money.“ This is great if for a young couple planning to buy their first home, but for those of you looking for good investments or planning ahead to retirement, it’s better to invest funds in a place where the market presents a viable opportunity income and good return on a future resale; a flat market means your home will not increase in value, and may be difficult to rent out at a profitable rate.
Mexico MLS listings include many properties in excellent locations that provide just the opposite. Mexico has seen steady property appreciation; even after the U.S. housing bubble and during the recession, most of the country continued to see healthy resale prices. At the worst, prices held steady for a while, and some temporary price reductions appeared, which have mostly been disappearing. Many locations promise healthy appreciation for the near future.
In Mexico’s main tourism areas, rental is a very feasible way to generate a good incomes. Mexico’s tourism has been picking up again after the recession, and the main beachfront destinations, as well as some in the interior have already reached over 90% hotel occupation in 2010, and more. The combination of these 2 factors makes Mexico a more attractive investment market.
But don’t think that just because prices are on a steady increase that Mexico is somehow more expensive than the U.S. Of course, the locations which have been seeing good appreciation for the last decade, such as Puerto Vallarta and Playa del Carmen, have higher prices, usually starting around $100,000 U.S. for cheap properties; but these locations show every sign of continued appreciation, and are excellent investments, especially for those planning on rental income.
Other areas, which are just beginning to tap into their tourism potential offer even lower prices, such as large beachfront lots for under $70,000 in the state of Campeche, or a quaint Mexican style home for under $50,000 in a city which has just recently invested into developing its rich colonial charm. Properties such as these will not bring much in the way of rental for the time being, but as tourism continues to grow in these areas, their value will increase considerably.
Whether you’re looking for cheap or luxury real estate, Mexico is much more promising investment than the current U.S. market.