Puerto Vallarta Real Esatte

Invest, Rent or Sell in Puerto Vallarta Area

I was a career real estate broker in the United States for thirty-eight years, specializing in sales, developing, construction and investing - analyzing investments for my clients and for my own use. I know from experience that it is getting very difficult for people in the US to find something worth investing in. Mexico offers the perfect alternative market with: the NAFTA trade agreement, favorable changes in Mexican investment regulations, tourist developments in the most desirable areas, allowable tax deductions by the IRS, close proximity to the US, perfect weather, a stable economy and a much lower cost of living. Mexico offers opportunity and returns that are all but non-existent in the US. Hundreds of thousands of American and Canadian baby boomers are looking at Mexico as a place to live and invest in, and are doing so in record numbers. Three hundred and ninety (390) baby boomers are retiring every hour in the US, and a large percentage is buying real estate in Mexico. Personal use and retirement planning are the main reasons for doing so, with the investment aspect justifying the purchase. In 2006, Canadians and US citizens purchased over 500 million dollars worth of real estate in Puerto Vallarta. Almost 80% of the money invested was in condominium projects. For today's world traveler, it is easy to lock the door, and not worry about the security, because someone will be there to look after your home.

Investing in a condominium in the pre-construction/presale stage, as opposed to one that is finished and ready to move into, offers the most important reason to buy from an investment standpoint. If you purchase in the right project at the beginning, and can wait up to eighteen months to take delivery of your new condominium, you can realize up to a 100% profit. In the best of the new ocean front resort developments built during the last five years in Marina Vallarta, Nuevo Vallarta and out to Punta Mita, the buyers who invested in the very early stages of construction saw their investments double in the first 3-4 years. There are currently over fifty new developments ongoing in the greater Puerto Vallarta area, eight of them are rated as a best buy by fundVallarta Investments.

Because of the increasing amount of US baby boomers, there is more demand than supply in Mexico, which is creating appreciation rates that exceed anywhere in the US. This trend is anticipated to continue for the next seven to ten years. If you need to finance your investment, then you will need to purchase real estate that is finished and ready to move into.

There are several great projects to consider if this is your option. There are companies from the U.S. located here, that offer real estate financing in Mexico. The most asked questions by clients I have talked to are: "Can I as a foreigner own real estate in Mexico, how much does it cost, how safe is my investment and can I rent my condominium?" Safety will only become an issue if you invest in the wrong projects. Ownership is fully discussed in another article "Frequently asked legal questions", which is accomplished through a fideicomiso.

"What is a fideicomiso? (Mexican Bank Trust)
Pronounced: fee-day-co-miso. This is a legal structure which allows non-Mexicans to purchase real estate property located in the 'Restricted Zone'. This zone encompasses the areas along the coasts and borders of Mexico. Essentially, it is a recorded contractual arrangement where a property is held in Trust by a bank for a specific purchaser, or beneficiary. In all material respects it is similar to the type of Trusts commonly used in the United States and Canada to hold property for estate planning purposes."

Rental and usage is important, but the most important reason is the increase in value from pre-construction to finished product. Prices on finished construction at Nuevo Vallarta are escalating at 15% per year in the most desired areas, and buying a pre-sale at large discounts of today's prices further enhance future profits.

If you are going to invest in the greater Puerto Vallarta area, and are not planning on living here full-time, and you want to rent while you are not here, then the best option is a condominium in an oceanfront development. When shopping for a condominium project in Nuevo Vallarta, or along the north shore to Punta Mita, there are important things to look for, and questions to ask. What kind of reputation and experience does the developer have? Will they also have time-share or fractional sales? Have the owners built other successful projects? Do they offer title insurance and escrow services? Do they have the funding to build the project, or do they need the buyer's money to complete construction? Be very careful investing in any project that asks you to make monthly payments during construction, where you have paid the full price before taking delivery. While title insurance is not as critical in new construction projects as it is in re-sales, it tells you that the developer knows and understands the wants and needs of the US buyers.

If you are planning on renting your condominium, it is important to know before you invest if the condominium's location is one that potential renters will want to use for their vacations. You should be investing in a resort style residential ocean front project. Renters want to be in a place that has lots of activities, amenities, and a beach to use.

Sixty to seventy percent of the people I talk to, have been to Puerto Vallarta more than once.

According to Travel Magazine, Puerto Vallarta is the seventh most returned to city in the world.

There were over 15,000 flights in and out of Puerto Vallarta in 2006. People return because they love Puerto Vallarta, they become interested on investing in their own place to vacation, with plans for full-time usage on retirement.

Most of my clients are not planning to live here full-time immediately, so the rental issue is an important consideration. I have included several web sites that specialize in renting condominiums. They show the rental rates of ocean front condominium projects at Nuevo Vallarta. Almost all of the resorts offer rental and property management, but most owners will also try to rent their units themselves. The web sites available for rentals make it easy to do it yourself.

What will an ocean front condominium rent for? The average one-bedroom in a Nuevo Vallarta oceanfront project rents between $900 to $1400 per week in high season, and $700 to $1000 during low season. The average two-bedroom rents between $1000 to $1700 per week during high season, and $700 to $1300 during low season. There are less three-bedrooms for rent, and the rates seem to be more diverse, but most are in the $250 to $375 per night range during high season, and as low as $200 per night in low season. Large beachfront condominiums in the best residential developments in the Punta Mita area can rent for as much as $1500 per night. Most of the units advertised for rent have a majority of their weeks booked during high season and surprisingly, several have quite a few weeks booked during low season. The two I found with the most weeks booked did not have the cheapest rates. The best units for rental are the two-bedroom units with a studio, in developments with amenities wanted by the vacationer.

I have gone into detail on the 'how to' aspect of renting successfully in another article, "Renting your condominium". If you would like a copy, please send me an email and I will be happy to send you one.

Investing in Mexico should not be a game of chance. The simple answer is to use fundVallarta Investments' marketing services. Our investment advisors live here, are experienced, professional and trained in the investment of a condominium or villa. We know which projects are the best to purchase in, which developer has the most experience and the best reputation.

fundVallarta Investments specializes in helping its clients use their IRA's and 401k plans to invest in Mexico. We are helping clients invest their retirement dollars, which was earning less than 10% in the US, into safe returns of 25% to 30% annually. We have formed alliances with the best legal and tax attorneys in Mexico and the US, and with a top rated US company that specializes in setting up self-directed IRAs. All the details are available on our web site at http://www.primepuertovallartarealestate.com./ or www.ppvre.com. Please feel free to contact us with questions about projects, real estate related issues and about using your IRA to gain wealth in Mexican real estate.

David Crenshaw,
President of fundVallarta Investments
advisorinrealestate@yahoo.com
Puerto Vallarta, Mexico
Toll free from the United States 877-387-3468


Some web sites for condominium rentals and general information are:
http://vrbo.com/ http://www.pvpropertyrentals.com/ www.findrentals.com http://greatrentals.com/Mexico/mexicanriviera.html#Banderas_Bay http://www.idealvacationrentals.com/puertovallarta.htm http://www.ladydee.com/mexico/ http://www.mexicovacations.com/mx/Puerto-Vallarta-Pacific-Coast.html http://www.sunworx.com/board/nuevo/index.htm http://www.sunworx.com/ http://vacationhomes.com/beach-rentals/index.cfm?&page=90&sb=0 http://www.vacationrentals.com/vacation-rentals/Nuevo-Vallarta-Pacific-Coast.html

Copyright © David Crenshaw 2007  


 

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