Investing in Multifamily Real Estate in Playa del Carmen, a Case Study, Mexico

Most people typically invest in Airbnb units in Playa del Carmen, but there is a relatively large segment that is practically untouched by foreign investors, which is to invest in local multifamily real estate to rent to locals. In some cases the numbers can be surprisingly good. My realtor Luigi took me to such a property and we ran the exact numbers together.
🇲🇽 More information on Luigi's services: thewanderinginvestor.com/serv...
🇲🇽 Full analysis of the real estate investment market in Playa del Carmen, including which neighbourhoods to focus on: thewanderinginvestor.com/inte...
00:00 Introduction
00:30 Two types of real estate investors in Playa del Carmen
01:35 The investment case for multifamily real estate in Playa del Carmen
02:55 Safety in Playa del Carmen
03:10 Multifamily real estate for sale in Playa del Carmen
07:20 Evicting tenants in Mexico
08:00 No rent control in Mexico
08:55 Tenant interview
12:10 Building an extra floor on the roof
14:30 Exact gross revenue for this multifamily real estate in Playa del Carmen
17:10 Occupancy rate for multifamily real estate in Playa del Carmen
17:50 Property management, cleaning, water, internet, maintenance fees for multifamily real estate in Playa del Carmen
21:37 Rental yield and capitalization rate calculation for multifamily real estate in Playa del Carmen
25:00 Exit strategy
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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.

[@jgm3620]

Great video, very interesting investment, thank you so much for the calculation details which a good idea about the R.O.I. and also about price increase

[@TheWanderingInvestor]

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

[@cl2385]

To Luigi's point, you do need someone with eyes and ears on the ground. You may find 6 people living in a studio or furniture walking away or being swapped out for cheap stuff. I hope a structural engineer was brought in to do an assesment for the upper floor extension possibilities. So, I have heard on several KZbin chanels that the Peso is getting stronger and they are paying more in rent at this moment.

[@tiborveres6811]

Man, pure gold

[@MyLatinLife]

This is an excellent video

[@bmwegypt]

Great analysis Ladislas 👍

[@TheWanderingInvestor]

Thank you Karym

[@cl2385]

Great video, I would definitely update the building and for sure add another hand rail to the stairway! Specially if there are children and or elderly living there. Take a look at all the water heaters and not sure if those would need and Anode Rod to extend the life of the water heaters. Being a long time landlord in the US, we know all about the problems getting tenants out. It sucks for sure! Just do extensive financial background and references and like you mentioned, if the building is kept in good repair most likely you will attract good tenants too 😊😊 Would love to see the finished condo in Turkey!

[@TheWanderingInvestor]

Thank you. Will do a video on the Turkey property in the coming months 👍

[@portofcall100]

Just wondering if the salary for the cleaners would include a unit for them to live in? We have rented large 5-7 bedroom homes in the area on a few occasions and it is standard for the cleaning staff to live on site in a casita.

[@TheWanderingInvestor]

No unit for them here. They would have to commute, but the commutes are short in Playa.

[@Christopher-rt1jq]

You forgot about management costs

[@lylerobinson3515]

Would love to see a video on investing in Dominican Republic

[@Wesna269]

Great video and I think the building was nice. Would doing AirBnBs be a good idea? I was surprised how nice the roof was it looked very clean and in good condition. This video got me interested in exploring Mexico as a place to live and invest. Currently, I live 6 months per year in Cali, Colombia but hesitate at times since it is a little unsecure there for me to invest. The difficulties with transfering funds to Colombia alone concern me.

[@TheWanderingInvestor]

I hear you. With the proper process getting funds in & out of Colombia is fine. I wouldn’t use this property for Airbnb due to its location. It’s better suited for long term or mid term tenants.

[@greeneryfinancial]

It'd be suitable for airbnb - it'd just be a lower-end rental. You'd be looking at $650-$900/mo most likely tops, $18-35~/day depending on season, and would get many people staying a couple months at a time assuming you improved the kitchens a bit and added a table/chair that's proper. You'd likely need to have the 2bed unit, or atleast a studio for an onsite cleaner/manager though, so the profitability wouldn't be substantially better when accounting for offseason.

[@pepper2304]

do you have controlling interest? Why is management fee so high, is it 3rd party? is a foreign real estate investment considered passive income in the US for tax purposes? Are your returns cash on cash and unlevered? Looks like a good play Ladislas.

[@TheWanderingInvestor]

Thank you. Unlevered. 10% management because overseas and you need someone to manage it. Can’t comment on US taxes. I bought another building together with Luigi, will probably make a video on it later.

[@pepper2304]

@@TheWanderingInvestor I like the idea of investing with someone to mitigate risk. Keep us posted on investments seems like a win win even w o increase in SF.

[@cl2385]

Is that $68,400.00 split between you both?

[@TheWanderingInvestor]

This is the total amount. So yes split between the partners.

[@marcusalexander6677]

How can I get in contact Luigi ?

[@TheWanderingInvestor]

[e-mail]