Playa del Carmen Real Estate Investment market overview & case study

Luigi & I sat down to discuss the Playa del Carmen real estate investment market, and went through a detailed case study of an actual condo.
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🇲🇽 Full analysis of the real estate investment market in Playa del Carmen, including which neighbourhoods to focus on: thewanderinginvestor.com/inte...
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Time stamps
00:00 Introduction
01:00 Why invest in real estate in Playa del Carmen
03:40 The Mexican economy
06:56 Walking on 5th avenue Playa del Carmen
08:08 Apartment visit in Playa del Carmen
10:20 Real estate maintenance in emerging markets
11:46 Luigi my real estate buyer's agent in the Riviera Maya
13:00 In which neighbourhoods to invest in real estate in Playa de Carmen
17:00 New real estate layouts post covid
23:10 Airbnb regulations in Playa de Carmen
24:30 Dollarized economy in Playa del Carmen
25:00 Mortgages in the Riviera Maya
29:25 Mexico's geopolitical neutrality
32:00 Buying coastal real estate in Mexico using a bank trust
33:30 Exact rental yield calculation of a real estate investment in Playa del Carmen
34:30 Seasonality in Playa del Carmen
40:10 Digital nomads investing in real estate in Playa del Carmen
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No part whatsoever of the discussion and presentation is, or should be considered as, investment advice, financial advice, legal advice, or tax advice. Always do proper due diligence and speak to a qualified professional advisor in your jurisdiction. Also, be advised that Ladislas Maurice and The Wandering Investor staff may own real estate or investments in the specific markets or opportunities that are discussed. The Wandering Investor may also have marketing agreements in place with certain opportunities that are mentioned.

[@TheWanderingInvestor]

More information about Luigi's Services: thewanderinginvestor.com/services/international-real-estate-services/my-real-estate-buyers-agent-in-tulum-and-playa-del-carmen-mexico/ Full analysis of the Playa del Carmen real estate market: thewanderinginvestor.com/international-real-estate/making-a-real-estate-investment-in-playa-del-carmen-decent-diversification-in-mexico/

[@SuperFlatrock]

In the example the key details are: purchase price, $161,000, revenue, $18,200; costs, $9745; and a gross profit of $8455 for a return on investment of 5.3%. The problem is taxes. For a Canadian, figure on a minimum of 25% All of the expenses are tax deductible, so you are paying 25% on a taxable income of $8455 for an after tax income of $6341 or an after tax return of $3.9%. As an investment, your return is no better than a one year GIC which is currently 5.5% with an after tax return of approximately 3.8%. The GIC is risk free while the rental property return is hardly risk free. As an investment, the rental is not very good. What the rental property does is give you the option of covering your out of pocket costs while you are not living there.

[@Dannyplayz949]

Yes, I was thinking the same about taxes, the Mexican government will charge taxes on your rental income (I am not sure about the percentage, I believe it’s at least 20%) this might not mean additional tax payments for people living in countries with international tax agreements with Mexico, but definitely taxes should have been included in the net profit calculation.

[@roti1873]

Our taxes different if you are a Mexican citizen owning this property and running the business? Also, what about the return on investment after the property value goes up writing that theoretically make the investment worthwhile after say 10 years especially if you are in Mexican citizens so the property gains tax isn't as bad

[@Deezmok]

Lol I have a unit in Singular Dream. I’ve stayed in this exact building twice already. It’s honestly one of my favorite. That’s how you lock in return clients get a unit in a great building. Love this area. Super close to all the action.

[@Carolinapetroska]

Luigi is very interesting and knowledgeable. It's true that many people are taking money out of Canada or wherever after realizing a capital gain and investing in a much more foreigner friendly country such as MEXICO and with a much better environment where you don't have to freeze stupidly most of the year for nothing

[@BlackWomenExalted]

Great video!! Thanks for making it!

[@jgm3620]

Thank you for the very informative and professional content

[@pink_plankton]

Really helpful, thanks so much.

[@nnamdi721]

Great video.. very realistic.

[@ChrisJustGoes]

Love Playa, ended up grabbing large lots in Tulum, the next town over about 5 years ago. Found your video as Im looking into Paraguay now as alot, especially in the last 2 years I'm seeing alot of changes that patterns reflect that of Usa/Canada with the reasons that people want to "escape the matrix" .... Great vids! Will Follow.

[@TheWanderingInvestor]

Well done on the Tulum lots!

[@nimacastro7664]

Very valuable video and information. I am surprised it has only 390 likes. While a cat video has million like.!! We are living in a interesting time. Two people giving us their valuable experience and knowledge for free and only few people put like 👍? Amazing Thank you two.

[@TheWanderingInvestor]

Thank you. Maybe I should pivot towards cat videos.

[@nimacastro7664]

@TheWanderingInvestor 😆 🤣 😂 😹 😆 🤣 😂 😹. No don't.

[@cybermondays]

ill be contacting Luigi soon!!

[@Shinee3e]

Thank you for the clean and professional content, i just think that 5% is pretty low for a 160k investment in a not 100% secure country, not sure...

[@marikoishibashi1357]

Hi ! Thank you for all the content this is a very informative video. What do you think about real estate investment in Tulum ? Is it a profitable market ?

[@TheWanderingInvestor]

Sign up to my free private list as I’ll publish my research on Tulum real wstate in the coming weeks: thewanderinginvestor.com/private-list/

[@DebeNicole]

Condo Insurance I hear is about 1000 a year. That would lower the ROI aswell.

[@Captain_Tiger]

Can you do a video about you dissolving yr HK brojkerage account? i also have one and use it.

[@TheWanderingInvestor]

Good Idea. I will. Thank you. Fyi, didn’t dissolve it. Just withdrew 98% of assets.

[@patriziarosi]

we wanted to invest there but way too much sargasso on the beaches lately and its getting worse every year

[@TheWanderingInvestor]

They are working on it: thecancunsun.com/playa-del-carmen-to-install-new-sargassum-barriers-this-month-to-keep-beaches-clean/

[@adrian3373]

You need to make an update on Mexico, been there 2 years and now they've changed how much you need to qualify for residency. To be eligible for Permanent Resident Visa right away:This means that you should prove your “economical solvency”. You can do that by showing your monthly income of at least US$5,460 over the last 6 months or savings/investments account balance(s) of at least US$218,000 over the last 12 months.18 Aug 2023

[@TheWanderingInvestor]

Thanks. Yes. Update coming soon.

[@sajibhasan4809]

How can I stay offgrid please?

[@jencat8]

hello, but what about the 50 kilometers distance to beach, there is a rool, that non-mexican people have, that we cant buy something near the beach, right?

[@TheWanderingInvestor]

You can, using a local bank trust. It’s common.

[@CDLVancouver]

unfortunately your assessment of the political stability is off. the Yucatan and specifically PDC and Cancun are now home to several cartels. They run the place. The potential for this to become another Acapulco is very real. but other than that a very good general overview of pdc market

[@PaulBeet]

I agree with you about Quintana Roo(the state on the Carribean). I think it´s good for visiting, but not to live. The next state over, Yucatan, is very different. I live in the main city, Merida, and much prefer it to touristy Quintana Roo.

[@karolinecox4345]

I love Playa Del Carmen, I go there all the time. I was going to purchase a condo, however, Playa is a wasteland from sea weed from this year beginning of March 2023, I was there in January and Playacar was clean but Playa was already getting sea weed. This is a growing concern for me as a real estate investor as not only Mexico but many surrounding Carribean neighbors including florida both coasts are dealing with red algae and sea weed infestation issues. For me as an investor, traveler, home owner of a "beach town" / coastal property is a Nighmare.......... this will not stop, it will only get worse because the sea weed season is coming earlier and stronger.............. how do you see this effecting the real estate in Playacar, Playa Del Carmen..... the smell of the sea weed is rott and sulfur.... this needs to be discussed because it is becoming a real problem with few or no solutions.......... so it will effect everything coastal like Playa Del Carmen.

[@SuperFlatrock]

I am looking at a two bedroom condo in Jardines de Ciudad Mayakoba which is basically a large gated community. It will be a retirement purchase. It seems like an attractive option that will include a medical centre and a lot of amenities. It is just a couple of kilometers from the beaches. Not sure if it would qualify as a digital Nomad rental option. I'll live there for five or six months. My only rental objective is to cover costs while I'm not there. What do you think?

[@TheWanderingInvestor]

You’ll cover your costs and a bit more. Many Russians stay there. People like living there. But don’t expect explosive returns.

[@SuperFlatrock]

Thanks for your quick reply!@@TheWanderingInvestor

[@TheWanderingInvestor]

I literally lived there for a few months 😉😅

[@matthewlee112]

Is this building right in front of the Hyatt Thompson mainhouse lol, in terms of blocking its view

[@TheWanderingInvestor]

I think so 🙂

[@buyrealestateoverseas3299]

Yes, it is the Hyatt

[@monicamonica1539]

❤

[@michaelkronner6869]

What about the 35% tax that automatically is taken from your Airbnb income?

[@TheWanderingInvestor]

These numbers are net of this tax. We don’t want to delve too much into this topic as there are quite a few ways local accountants can help minimize it…

[@tba1986]

PARAGUAY ❤❤❤

[@stringandstrands]

Would have appreciated seeing more of the condos you visited instead of the camera on you most of the time.

[@israeltorres8823]

excellent video ! , question... is Mexico in the middle east ???

[@Carolinapetroska]

No it's in Canada

[@3pm341]

Africa

[@stevevirag8282]

Is their house keeping for Airbnb who takes care of it while u are at home

[@TheWanderingInvestor]

I don’t understand the question

[@stevevirag8282]

@TheWanderingInvestor if I were you buy a condo and want to rent it out .is there a service that can clean it and take care of it

[@TheWanderingInvestor]

@@stevevirag8282 100%. Luigi and his team can do this as well.

[@gem3132]

Bonus: lots of direct flights from Canada. Thanks.

[@rachegwalid2548]

Hi, what about ISR tax?

[@TheWanderingInvestor]

Many different ways to structure the purchase and rental. Many deductions are possible too. This topic would have taken too long to cover. Depends on each individual’s personal situation.

[@davidwilliams2502]

What is ISR tax And what do you mean there are many ways to structure the purchase and rental?? @@TheWanderingInvestor

[@deborahcurtis1385]

It's not very helpful to say to check out for bars, restaurants and clubs for possible noise disturbance. Because a new bar etc. could easily be established after you buy so it's really a crap shot. Also the maintenance and any body corporate, you're always at the mercy of the legal situation and how to enforce. There's always an optimal element when the building is new and then it tapers off after 10-15 years or so. I personally hate air bnb and wouldn't invest with them in mind. Too small an apartment will have limited life IMO. I prefer older areas and less trendy. The way the discussion went there is limitless rainforest to cut down for limitless investing, I mean how about sustainable development? How about that? Just a few thoughts.

[@pptkn1s140]

Hoa, competition, management fees, maintenance costs and taxes eat away most gains. Life style investment yes for ROI look elsewhere

[@downhomegirl5]

It's really not nice there... I loved it years ago for its authentic mexican lifestyle but now, it's becoming to Americanized.. the plus is the ferry near by however, you get harassed to death to buy stuff when you go to the island & the nicest part ends up being the ride there & back on the ferry... I personally no longer go to Playa & let's not ignore the massive drug activity

[@connieb.6061]

north americans need to stop using housing as investments that is what is ruining everything

[@Erickscarpone]

So, 2.5% yield? With no financing? What is good about that? You can put your capital in Robinhood and get 4.5% or a CD 3 months at a time and get over 5% There is going to be a huge crash in the area. I would wait for all these prices to come plummeting down or investor just selling at a loss for not making any money from this "investments"

[@davidwilliams2502]

Why will there be a huge crash in the area - Playa del Carmen?

[@Erickscarpone]

There is too much demand and very little investment and financial options. It has already started, the price of new projects is decreasing, and completed units are being price reduced and not sold. Even Moxi, the only financing option that I have seen for US buyers, is now reaching out to investment less than $250k More and more affordable projects with less intro cost and more size/quality hokes are popping in Belize/Nicaragua/Colombia/RD so there is a lot to choose from in terms of beach vacation places with a much higher return

[@Cinepobrefilmfestival]

nutcase: playa del carmen a safe haven LOL. hijole

[@oneclickandclosed]

Cartel country

[@esanchez036]

Shut up Bi... You are the one buying from them stupid. Mexico is more then stupid cartel

[@Carolinapetroska]

Well at least foreigners are allowed to buy unlike in Xenophobic canada

[@y2vvilliam]

Better than Chinadas Trudeau Cartel LOL, at least you know whos the real enemy

[@PaulBeet]

@@y2vvilliam Foreign buyers have done VERY well in Canada during the Trudeau years !!

[@maltratar]

mexico para los mexicanos!!!!!

[@hansmaier1391]

Gente ascerosa