July 23, 2025 • 14 mins
In this episode Echando Raíces focuses on Playa del Carmen as a prime real estate investment opportunity. The hosts explain that the city’s appeal lies in its strategic location within the Riviera Maya, offering excellent connectivity to airports and other attractions. They highlight Playa del Carmen's rapid demographic and tourism growth, which fuels a constant demand for housing and leads to high property appreciation. Furthermore, the discussion emphasizes the diverse investment objectives that can be met, from long-term and vacation rentals to second homes, alongside the year-round profitability compared to seasonal destinations. The hosts also stress the importance of defining investment goals and securing professional property management to maximize returns, while also noting the low barrier to entry for investors due to easy accessibility.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Bob (00:00):
Imagine a place you've always thought of as purely a
(00:02):
vacation getaway.
Sun Sand Clearwater.
But what if I told you that sameParadise is actually a
powerhouse for smart strategicinvestment, one where you can
put down roots both literallyand financially.
Alexa (00:16):
It's absolutely true.
Today we're embarking intoresidential real estate
investment, and we're putting alaser focus on Playa del Carmen,
Mexico.
Bob (00:25):
Yeah.
We've taken a stack of sources,including insights directly from
real estate experts on theground, to really unpack the
crucial factors you mustconsider before diving into
property ownership there.
Mm-hmm.
Our mission really is to giveyou a shortcut to understanding
why Playa del Carmen stands out.
We wanna help you reduce risksand, uh, maximize potential
returns,
Alexa (00:45):
whether that's for your own personal use, maybe
generating rental income, oreven building long-term wealth.
Bob (00:50):
Exactly.
So let's explore this as we getinto what truly makes a smart
investment here.
Our sources consistentlyemphasize one foundational first
step.
You just can't skip.
Alexa (01:00):
Right.
Understanding your objective.
Bob (01:02):
Yes.
Before you do anything else, youneed to be crystal clear on why
you want to invest.
It sounds simple, but thestrategic clarity, well, it
defines your entire approach,doesn't it?
Alexa (01:13):
It really does, and what's truly compelling here, I
think, is how versatile thePlaya del Carmen market is.
It caters to such a diverserange of investment.
Objective.
Bob (01:22):
Like what specifically?
Alexa (01:23):
Well, you could be looking for a full-time
residence, perhaps a primaryhome, or, you know, even
thinking ahead to a futureretirement haven.
Bob (01:31):
Okay.
Alexa (01:32):
Then again, many see it as a second residence for
personal use, a tropical escapeto enjoy whenever you wish.
Bob (01:38):
Beyond just living there yourself.
What about the income side?
What are the main rental modelsthat really work well in Playa?
Alexa (01:44):
Right, so for many the focus is income generation.
That could mean a long-termtraditional rental setup.
Okay.
Or, and this is increasinglypopular, the vacation rental
model.
You know, using platforms likeAirbnb or booking.com
Bob (01:58):
and the numbers there.
What do the sources say?
Alexa (02:00):
Our sources reveal that Playa del Carmen boasts
occupancy rates often exceeding60%.
Bob (02:05):
Wow.
60%.
Alexa (02:06):
Yeah, and just to give you context, in many established
global vacation markets hittinganything above 50% is considered
excellent.
Bob (02:14):
So Playa is really standing out there.
It
Alexa (02:16):
is.
It makes it a standout forconsistent rental income, and
you're looking at nightly ratesaveraging around 3000 pesos,
which
Bob (02:24):
is about,
Alexa (02:25):
uh, roughly 175 U-S-D-S-E.
So it offers this sweet spot,affordable for tourists, but
still providing strong returnsfor investors.
Bob (02:35):
It sounds incredibly adaptable as a market.
Alexa (02:37):
Absolutely.
And we haven't even touched onbuying for quick resale to
capitalize on appreciation.
Timing is key there, of course.
Right?
Or even using property forcommercial use.
This market really does offermultiple paths depending on your
specific profile, your stage oflife, your resources.
Bob (02:53):
Which explains why as our sources point out, the good real
estate professionals therealways start by asking about
your specific goals.
Alexa (03:00):
Exactly.
Playa del Carmen isn't somegeneric investment destination
where one size fits all.
Bob (03:06):
Makes sense.
So as we go through these othercritical factors, I invite you,
the listener, to keepconsidering what's your.
Alexa (03:12):
Well, for me, and I think for so many investors who commit
to this region, the mostattractive element about p Playa
del Carmen has to be itslocation,
Bob (03:21):
location, location, location.
It's
Alexa (03:22):
the classic real estate mantra, right?
Yeah.
And Playa del Carmenunequivocally checks all three
boxes.
It's strategically positionedright in the heart of the
Riviera Maya.
Bob (03:32):
Meaning,
Alexa (03:33):
meaning it offers excellent connectivity to all
the key destinations around it.
You're just a few kilometersfrom Tulum, a few kilometers
from Cancun, and
Bob (03:41):
that.
Proximity to not one, but twointernational airports.
Hmm.
That's gotta be a significantdifferentiator.
Alexa (03:48):
Oh, it is a huge one.
The Cancun airport alone handleover 32 million people in 20 23,
Bob (03:55):
32 million.
Alexa (03:56):
It's the second busiest airport in Mexico right after
Mexico City.
Wow.
Plus, you're literally right infront of the second largest
barrier reef in the world, andyou've got incredible
archeological zones.
Just moments away.
This combination makes, play'slocation, honestly unbeatable.
Bob (04:12):
It's also fascinating how playa seems to cater to
different tastes even within itsown borders.
Are there specific zones thatline up better with certain
investment goals?
Alexa (04:21):
Definitely.
You've got the vibrant downtownarea and the famous fifth
Avenue, which see incrediblyhigh tourist demand.
So ideal for rentals, commercialventures.
It's the tourist
Bob (04:33):
hub.
Alexa (04:33):
Exactly.
Then you have Playacar that'smore of a private residential
community.
It has its own exclusive beachclubs, golf courses.
It offers a different kind oftranquility,
Bob (04:43):
a different vibe in entirely
Alexa (04:44):
completely.
And then let's not overlook theluxury vertical developments
near the sea.
Think around 34th and 38thStreet or up in the North end
Coco Beach area.
These are internationalinvestment zones where the value
per square meter has just seenimmense appreciation.
Bob (04:59):
So growth potential is still strong there.
Yeah.
Alexa (05:02):
What
Bob (05:02):
about looking ahead, are there any new developments that
might shake things up or impactproperty values?
Alexa (05:07):
Yes.
Actually a key factor oursources are highlighting for
future appreciation is theupcoming opening of a new
archeological zone called Pamalii.
Bob (05:15):
Oh, interesting.
Where's that?
Alexa (05:16):
It's just five minutes away heading towards Xcaret and
Tulum, and the expectation isthat this opening will cause a,
well, a significant surge inappreciation in the surrounding
areas, in the coming years.
Bob (05:28):
Something to watch then.
Okay, so beyond its stellarlocation.
Playa del Carmen's continuousdemographic in tour's.
Growth seems like another majorengine driving investment.
Alexa (05:38):
Absolutely.
This city has transformed, youknow, yeah.
From a humble fishing village tonow over 300,000 inhabitants and
a
Bob (05:46):
growth
Alexa (05:46):
rate, it's averaging about 8% annually.
When you hear that 20,000 to25,000 new people move to Playa
del Carmen every year, it's
Bob (05:54):
like adding a small city annually.
Alexa (05:55):
It is.
And that sustained demographicexpansion continually generates
robust demand for housing, forjobs, which organically drives
property appreciation.
Bob (06:05):
Let's look at the tourist side too.
The numbers are prettystaggering.
Alexa (06:08):
They really are.
If we look year to date, we'retalking over 530,000 tourists
just from the US and NorthAmerica alone.
That's about 36% of allvisitors,
Bob (06:17):
a huge chunk.
Alexa (06:18):
And national tourism.
Mexicans visiting is immenselyimportant too.
That's 30% Canadian tourism addsanother 8%.
Bob (06:24):
And our sources highlighted something quite unique, didn't
they, about Argentinian tourism.
Alexa (06:29):
Yes.
It's fascinating.
Playa del Carmen is often citedas having the largest
Argentinian community in theworld outside of Argentina
itself.
Yeah, it adds this distinctcultural layer, this vibrant
international appeal that'squite unique.
Then you have a mix of Europeansand Asians making up the
remaining 5%,
Bob (06:48):
so it's a real melting pot.
Now, a question many listenersmight have given all this
growth, isn't the market gettingsaturated?
Alexa (06:56):
That's a common concern and a fair one to ask,
Bob (06:58):
but what does the data say?
Alexa (07:00):
The answer from the data and from experts on the ground
is a resounding no.
While there is a lot of suplyentering the market, there's
much, much more demand.
Bob (07:09):
Can you elaborate a bit on why?
Why does demand keep outpacingthat suply growth, especially
with, as you said, 20,000 to25,000 new residents arriving
each year?
Alexa (07:20):
It comes back to that constant influx.
Those new residents need placesto live.
Combine that with theever-growing tourist numbers,
needing accommodation, itcreates this relentless need for
properties.
Bob (07:30):
So it's a powerful kind of self-sustaining cycle.
Alexa (07:33):
Exactly.
Population growth directly fuelshousing demand, which reinforces
the market's stability and, uh,its potential for continued
growth.
Okay.
Bob (07:43):
Let's shift gears a bit.
Let's talk about the numbers.
Game, return on investment.
I know this is probably the mostanticipated topic for many
potential investors.
Alexa (07:50):
Understandably so.
Bob (07:52):
Now, consider this a preview.
Maybe because we're planning afuture deep dive that will go
all in.
With hard data, more technicaldiscussions on ROI.
Alexa (08:01):
Sounds good.
But for now, let's define ROI.
SimPlaya it's aboutunderstanding the capital you
invest and the time it takes torecover it, right?
And you need to consider thatalongside appreciation.
The increase in property valueover time, which as we touched
on, is estimated at a veryhealthy 8% to 12% annually in
certain key areas.
Bob (08:19):
And location plays a huge role here too, presumably.
Alexa (08:22):
Absolutely crucial location directly impacts ROI.
For instance, think about anapartment right on 12th Street
and fifth Avenue in the thick ofit all.
That will yield a very differentreturn compared to a property in
a more remote area, maybe likeEl Tigrillo.
Bob (08:35):
So the value proposition, the entry cost, everything is
linked to that precise spot.
Alexa (08:40):
Exactly.
The value is intrinsicallylinked to its position.
And what's particularlynoteworthy here is that Playa
Del Carmen leads the MexicanCaribbean in this regard.
Bob (08:50):
How so?
Alexa (08:51):
It's the municipality with the most active vacation
properties and the highestaverage occupancy rate.
Bob (08:56):
Okay.
But you mentioned somethingearlier, a crucial factor, maybe
a warning.
Alexa (09:00):
Yes.
A vital warning for newinvestors.
Bob (09:04):
Yeah,
Alexa (09:04):
a very good location in a great destination like Playa de
Carmen.
Well, it would be worth almostnothing without very good
property management.
Bob (09:14):
Ah, the management piece.
What's the biggest mistake yousee new investors make there?
Alexa (09:19):
It's almost always trying to cheap out on property
management.
It's a classic pitfall.
Bob (09:23):
How does that usually play out?
Alexa (09:24):
They hire a relative, maybe, or find a less than
reputable agency just becauseit's cheaper.
Then six months down the line,they're wondering why they
aren't seeing the profitabilitythey expected.
Bob (09:34):
So the takeaway is.
Alexa (09:35):
Achieving those strong returns, absolutely hinges on
having an excellent managementcompany, one that truly
understands the local marketnuances, the pricing, the guest
services.
Everything
Bob (09:45):
that is vital.
Okay.
And when we talk about returns,profitability, we also have to
talk about seasonality.
That's a big factor in manyvacation markets.
Alexa (09:54):
Huge.
But this is where Playa delCarmen really shines.
Bob (09:58):
How so?
Compared to other places,
Alexa (09:59):
well think about highly seasonal destinations like, uh,
ski resorts that might only peakfor a few months a year.
Yeah.
Or even places like Ibiza inSpain, which.
Operate intensely for maybe fouror five months, and then
significantly quiet down,
Bob (10:14):
right?
Very defined seasons.
Alexa (10:16):
Play Del Carmen is an eternal summer.
There's strong visitation prettymuch year round,
Bob (10:21):
which means,
Alexa (10:21):
which means much more balanced profitability
throughout the year.
For investors, you don't havethose drastic spikes and then
long empty lulls,
Bob (10:29):
so more consistent cash flow coming into your pocket.
Alexa (10:32):
Exactly.
Even though you still get higherpeaks during the traditional
high seasons, December, newYear's, holy Week, summer
holidays, but the base level isstrong,
Bob (10:42):
that year round appeal is a massive advantage.
Alexa (10:45):
It is.
And it's not just aboutyear-round.
Demand.
Playa also offers incrediblediversity in the types of
properties available.
You've got studios, 1, 2, 3bedroom apartments, even houses.
Bob (10:56):
And in different locations too, right?
Not just the absolute primespots.
Alexa (11:00):
Correct.
Across various locations fromthose premium high demand spots
to other areas that might not bebeachfront, but still offer
great ROI potential.
This adaptability truly catersto, well, pretty much all
investor profiles
Bob (11:13):
and that accessibility you mentioned earlier, the ease of
getting there, that alsocontributes significantly to its
appeal.
Yeah.
Our sources talked about a lowbarrier to entry.
Alexa (11:22):
Yes.
It really lowers the barrier.
Bob (11:24):
How does that accessibility translate?
Into a low barrier to entry forinvestors?
Yeah.
Beyond just being easy to visit.
Alexa (11:30):
Well, it's about market dynamics.
Really.
Think about it, getting to somemajor luxury or ski destinations
can be quite involved.
You might fly into a major hub,then face a long drive, maybe.
Two, three, even four hours,like
Bob (11:45):
trying to get to Aspen or Vail, maybe.
Mm.
Fly to Denver.
Then the drive.
Alexa (11:50):
Exactly.
Compare that to Playa delCarmen.
You fly into Cancun,international direct flights
from all over the world, landthere and then.
It's a pretty straightforwarddrive, maybe 35 to 60 minutes,
even if there's a bit oftraffic,
Bob (12:03):
it's much simpler.
Alexa (12:04):
Much simpler.
You're quickly at yourdestination ready to enjoy it.
Now, for an investor, thisunparalleled accessibility isn't
just a tourist convenience.
It fundamentally broadens thepool of potential buyers and
renters.
Bob (12:16):
Oh, okay.
Alexa (12:17):
Unlike maybe more exclusive or difficult to reach
luxury markets, Playa's ease ofaccess means you have a more
dynamic market, potentially moreliquid,
Bob (12:24):
more people who can easily buy or rent there
Alexa (12:27):
precisely, which generally makes it a more
resilient market for propertyowners
Bob (12:31):
and that ease, that constant flow of people wanting
to come and come back again andagain for the investor that
directly generates consistentdemand.
Boosts, ROI, potential and fuelsappreciation.
It's a powerful feedback loop.
Alexa (12:46):
It really is a self-reinforcing cycle.
Bob (12:48):
So let's recap.
We've just unpacked several keyfactors that make Playa Ade
Carmen such a compellingresidential real estate
investment opportunity.
We talked about understandingyour strategic objective first.
Alexa (13:00):
Absolutely foundational.
Then it's unbeatable location inthe Riviera May,
Bob (13:04):
right?
The explosive demographic andtourist growth, fueling demand.
Alexa (13:08):
Can't forget the attractive return on investment
potential.
Linked heavily to that location
Bob (13:12):
and critically the need for excellent property management to
actually realize that potentialso important.
Alexa (13:18):
And finally, those incredibly low barriers to
entry, thanks to itsaccessibility.
Bob (13:23):
A lot to consider,
Alexa (13:24):
and this is really just.
Part one of our deep dive intoPlaya del Carmen investment.
There's more to cover,
Bob (13:29):
definitely.
And our next deep dive, we'll begetting into some other crucial
aspects.
Things like legal certainty,legal, security,
Alexa (13:36):
very important, especially for foreign buyers.
We'll talk about structures liketrust, the fideicomiso, which is
essentially the legal vehicle,allowing foreigners to own
property in certain zones inMexico,
Bob (13:47):
right?
Demystifying that.
And financial transparency.
Other key considerations
Alexa (13:52):
among many other topics.
It's gonna be another packedsession.
Bob (13:55):
You won't wanna miss it, but for now, as you ponder all
this, here's a thought.
If defining your investmentobjective is the foundation, and
location is the bedrock.
How might the eternal summer ofPlaya del Carmen redefine your
understanding of what a trulyyear-round investment can look
like?
Imagine a place you've always thought of as purely a
(00:02):
vacation getaway.
Sun Sand Clearwater.
But what if I told you that sameParadise is actually a
powerhouse for smart strategicinvestment, one where you can
put down roots both literallyand financially.
Alexa (00:16):
It's absolutely true.
Today we're embarking intoresidential real estate
investment, and we're putting alaser focus on Playa del Carmen,
Mexico.
Bob (00:25):
Yeah.
We've taken a stack of sources,including insights directly from
real estate experts on theground, to really unpack the
crucial factors you mustconsider before diving into
property ownership there.
Mm-hmm.
Our mission really is to giveyou a shortcut to understanding
why Playa del Carmen stands out.
We wanna help you reduce risksand, uh, maximize potential
returns,
Alexa (00:45):
whether that's for your own personal use, maybe
generating rental income, oreven building long-term wealth.
Bob (00:50):
Exactly.
So let's explore this as we getinto what truly makes a smart
investment here.
Our sources consistentlyemphasize one foundational first
step.
You just can't skip.
Alexa (01:00):
Right.
Understanding your objective.
Bob (01:02):
Yes.
Before you do anything else, youneed to be crystal clear on why
you want to invest.
It sounds simple, but thestrategic clarity, well, it
defines your entire approach,doesn't it?
Alexa (01:13):
It really does, and what's truly compelling here, I
think, is how versatile thePlaya del Carmen market is.
It caters to such a diverserange of investment.
Objective.
Bob (01:22):
Like what specifically?
Alexa (01:23):
Well, you could be looking for a full-time
residence, perhaps a primaryhome, or, you know, even
thinking ahead to a futureretirement haven.
Bob (01:31):
Okay.
Alexa (01:32):
Then again, many see it as a second residence for
personal use, a tropical escapeto enjoy whenever you wish.
Bob (01:38):
Beyond just living there yourself.
What about the income side?
What are the main rental modelsthat really work well in Playa?
Alexa (01:44):
Right, so for many the focus is income generation.
That could mean a long-termtraditional rental setup.
Okay.
Or, and this is increasinglypopular, the vacation rental
model.
You know, using platforms likeAirbnb or booking.com
Bob (01:58):
and the numbers there.
What do the sources say?
Alexa (02:00):
Our sources reveal that Playa del Carmen boasts
occupancy rates often exceeding60%.
Bob (02:05):
Wow.
60%.
Alexa (02:06):
Yeah, and just to give you context, in many established
global vacation markets hittinganything above 50% is considered
excellent.
Bob (02:14):
So Playa is really standing out there.
It
Alexa (02:16):
is.
It makes it a standout forconsistent rental income, and
you're looking at nightly ratesaveraging around 3000 pesos,
which
Bob (02:24):
is about,
Alexa (02:25):
uh, roughly 175 U-S-D-S-E.
So it offers this sweet spot,affordable for tourists, but
still providing strong returnsfor investors.
Bob (02:35):
It sounds incredibly adaptable as a market.
Alexa (02:37):
Absolutely.
And we haven't even touched onbuying for quick resale to
capitalize on appreciation.
Timing is key there, of course.
Right?
Or even using property forcommercial use.
This market really does offermultiple paths depending on your
specific profile, your stage oflife, your resources.
Bob (02:53):
Which explains why as our sources point out, the good real
estate professionals therealways start by asking about
your specific goals.
Alexa (03:00):
Exactly.
Playa del Carmen isn't somegeneric investment destination
where one size fits all.
Bob (03:06):
Makes sense.
So as we go through these othercritical factors, I invite you,
the listener, to keepconsidering what's your.
Alexa (03:12):
Well, for me, and I think for so many investors who commit
to this region, the mostattractive element about p Playa
del Carmen has to be itslocation,
Bob (03:21):
location, location, location.
It's
Alexa (03:22):
the classic real estate mantra, right?
Yeah.
And Playa del Carmenunequivocally checks all three
boxes.
It's strategically positionedright in the heart of the
Riviera Maya.
Bob (03:32):
Meaning,
Alexa (03:33):
meaning it offers excellent connectivity to all
the key destinations around it.
You're just a few kilometersfrom Tulum, a few kilometers
from Cancun, and
Bob (03:41):
that.
Proximity to not one, but twointernational airports.
Hmm.
That's gotta be a significantdifferentiator.
Alexa (03:48):
Oh, it is a huge one.
The Cancun airport alone handleover 32 million people in 20 23,
Bob (03:55):
32 million.
Alexa (03:56):
It's the second busiest airport in Mexico right after
Mexico City.
Wow.
Plus, you're literally right infront of the second largest
barrier reef in the world, andyou've got incredible
archeological zones.
Just moments away.
This combination makes, play'slocation, honestly unbeatable.
Bob (04:12):
It's also fascinating how playa seems to cater to
different tastes even within itsown borders.
Are there specific zones thatline up better with certain
investment goals?
Alexa (04:21):
Definitely.
You've got the vibrant downtownarea and the famous fifth
Avenue, which see incrediblyhigh tourist demand.
So ideal for rentals, commercialventures.
It's the tourist
Bob (04:33):
hub.
Alexa (04:33):
Exactly.
Then you have Playacar that'smore of a private residential
community.
It has its own exclusive beachclubs, golf courses.
It offers a different kind oftranquility,
Bob (04:43):
a different vibe in entirely
Alexa (04:44):
completely.
And then let's not overlook theluxury vertical developments
near the sea.
Think around 34th and 38thStreet or up in the North end
Coco Beach area.
These are internationalinvestment zones where the value
per square meter has just seenimmense appreciation.
Bob (04:59):
So growth potential is still strong there.
Yeah.
Alexa (05:02):
What
Bob (05:02):
about looking ahead, are there any new developments that
might shake things up or impactproperty values?
Alexa (05:07):
Yes.
Actually a key factor oursources are highlighting for
future appreciation is theupcoming opening of a new
archeological zone called Pamalii.
Bob (05:15):
Oh, interesting.
Where's that?
Alexa (05:16):
It's just five minutes away heading towards Xcaret and
Tulum, and the expectation isthat this opening will cause a,
well, a significant surge inappreciation in the surrounding
areas, in the coming years.
Bob (05:28):
Something to watch then.
Okay, so beyond its stellarlocation.
Playa del Carmen's continuousdemographic in tour's.
Growth seems like another majorengine driving investment.
Alexa (05:38):
Absolutely.
This city has transformed, youknow, yeah.
From a humble fishing village tonow over 300,000 inhabitants and
a
Bob (05:46):
growth
Alexa (05:46):
rate, it's averaging about 8% annually.
When you hear that 20,000 to25,000 new people move to Playa
del Carmen every year, it's
Bob (05:54):
like adding a small city annually.
Alexa (05:55):
It is.
And that sustained demographicexpansion continually generates
robust demand for housing, forjobs, which organically drives
property appreciation.
Bob (06:05):
Let's look at the tourist side too.
The numbers are prettystaggering.
Alexa (06:08):
They really are.
If we look year to date, we'retalking over 530,000 tourists
just from the US and NorthAmerica alone.
That's about 36% of allvisitors,
Bob (06:17):
a huge chunk.
Alexa (06:18):
And national tourism.
Mexicans visiting is immenselyimportant too.
That's 30% Canadian tourism addsanother 8%.
Bob (06:24):
And our sources highlighted something quite unique, didn't
they, about Argentinian tourism.
Alexa (06:29):
Yes.
It's fascinating.
Playa del Carmen is often citedas having the largest
Argentinian community in theworld outside of Argentina
itself.
Yeah, it adds this distinctcultural layer, this vibrant
international appeal that'squite unique.
Then you have a mix of Europeansand Asians making up the
remaining 5%,
Bob (06:48):
so it's a real melting pot.
Now, a question many listenersmight have given all this
growth, isn't the market gettingsaturated?
Alexa (06:56):
That's a common concern and a fair one to ask,
Bob (06:58):
but what does the data say?
Alexa (07:00):
The answer from the data and from experts on the ground
is a resounding no.
While there is a lot of suplyentering the market, there's
much, much more demand.
Bob (07:09):
Can you elaborate a bit on why?
Why does demand keep outpacingthat suply growth, especially
with, as you said, 20,000 to25,000 new residents arriving
each year?
Alexa (07:20):
It comes back to that constant influx.
Those new residents need placesto live.
Combine that with theever-growing tourist numbers,
needing accommodation, itcreates this relentless need for
properties.
Bob (07:30):
So it's a powerful kind of self-sustaining cycle.
Alexa (07:33):
Exactly.
Population growth directly fuelshousing demand, which reinforces
the market's stability and, uh,its potential for continued
growth.
Okay.
Bob (07:43):
Let's shift gears a bit.
Let's talk about the numbers.
Game, return on investment.
I know this is probably the mostanticipated topic for many
potential investors.
Alexa (07:50):
Understandably so.
Bob (07:52):
Now, consider this a preview.
Maybe because we're planning afuture deep dive that will go
all in.
With hard data, more technicaldiscussions on ROI.
Alexa (08:01):
Sounds good.
But for now, let's define ROI.
SimPlaya it's aboutunderstanding the capital you
invest and the time it takes torecover it, right?
And you need to consider thatalongside appreciation.
The increase in property valueover time, which as we touched
on, is estimated at a veryhealthy 8% to 12% annually in
certain key areas.
Bob (08:19):
And location plays a huge role here too, presumably.
Alexa (08:22):
Absolutely crucial location directly impacts ROI.
For instance, think about anapartment right on 12th Street
and fifth Avenue in the thick ofit all.
That will yield a very differentreturn compared to a property in
a more remote area, maybe likeEl Tigrillo.
Bob (08:35):
So the value proposition, the entry cost, everything is
linked to that precise spot.
Alexa (08:40):
Exactly.
The value is intrinsicallylinked to its position.
And what's particularlynoteworthy here is that Playa
Del Carmen leads the MexicanCaribbean in this regard.
Bob (08:50):
How so?
Alexa (08:51):
It's the municipality with the most active vacation
properties and the highestaverage occupancy rate.
Bob (08:56):
Okay.
But you mentioned somethingearlier, a crucial factor, maybe
a warning.
Alexa (09:00):
Yes.
A vital warning for newinvestors.
Bob (09:04):
Yeah,
Alexa (09:04):
a very good location in a great destination like Playa de
Carmen.
Well, it would be worth almostnothing without very good
property management.
Bob (09:14):
Ah, the management piece.
What's the biggest mistake yousee new investors make there?
Alexa (09:19):
It's almost always trying to cheap out on property
management.
It's a classic pitfall.
Bob (09:23):
How does that usually play out?
Alexa (09:24):
They hire a relative, maybe, or find a less than
reputable agency just becauseit's cheaper.
Then six months down the line,they're wondering why they
aren't seeing the profitabilitythey expected.
Bob (09:34):
So the takeaway is.
Alexa (09:35):
Achieving those strong returns, absolutely hinges on
having an excellent managementcompany, one that truly
understands the local marketnuances, the pricing, the guest
services.
Everything
Bob (09:45):
that is vital.
Okay.
And when we talk about returns,profitability, we also have to
talk about seasonality.
That's a big factor in manyvacation markets.
Alexa (09:54):
Huge.
But this is where Playa delCarmen really shines.
Bob (09:58):
How so?
Compared to other places,
Alexa (09:59):
well think about highly seasonal destinations like, uh,
ski resorts that might only peakfor a few months a year.
Yeah.
Or even places like Ibiza inSpain, which.
Operate intensely for maybe fouror five months, and then
significantly quiet down,
Bob (10:14):
right?
Very defined seasons.
Alexa (10:16):
Play Del Carmen is an eternal summer.
There's strong visitation prettymuch year round,
Bob (10:21):
which means,
Alexa (10:21):
which means much more balanced profitability
throughout the year.
For investors, you don't havethose drastic spikes and then
long empty lulls,
Bob (10:29):
so more consistent cash flow coming into your pocket.
Alexa (10:32):
Exactly.
Even though you still get higherpeaks during the traditional
high seasons, December, newYear's, holy Week, summer
holidays, but the base level isstrong,
Bob (10:42):
that year round appeal is a massive advantage.
Alexa (10:45):
It is.
And it's not just aboutyear-round.
Demand.
Playa also offers incrediblediversity in the types of
properties available.
You've got studios, 1, 2, 3bedroom apartments, even houses.
Bob (10:56):
And in different locations too, right?
Not just the absolute primespots.
Alexa (11:00):
Correct.
Across various locations fromthose premium high demand spots
to other areas that might not bebeachfront, but still offer
great ROI potential.
This adaptability truly catersto, well, pretty much all
investor profiles
Bob (11:13):
and that accessibility you mentioned earlier, the ease of
getting there, that alsocontributes significantly to its
appeal.
Yeah.
Our sources talked about a lowbarrier to entry.
Alexa (11:22):
Yes.
It really lowers the barrier.
Bob (11:24):
How does that accessibility translate?
Into a low barrier to entry forinvestors?
Yeah.
Beyond just being easy to visit.
Alexa (11:30):
Well, it's about market dynamics.
Really.
Think about it, getting to somemajor luxury or ski destinations
can be quite involved.
You might fly into a major hub,then face a long drive, maybe.
Two, three, even four hours,like
Bob (11:45):
trying to get to Aspen or Vail, maybe.
Mm.
Fly to Denver.
Then the drive.
Alexa (11:50):
Exactly.
Compare that to Playa delCarmen.
You fly into Cancun,international direct flights
from all over the world, landthere and then.
It's a pretty straightforwarddrive, maybe 35 to 60 minutes,
even if there's a bit oftraffic,
Bob (12:03):
it's much simpler.
Alexa (12:04):
Much simpler.
You're quickly at yourdestination ready to enjoy it.
Now, for an investor, thisunparalleled accessibility isn't
just a tourist convenience.
It fundamentally broadens thepool of potential buyers and
renters.
Bob (12:16):
Oh, okay.
Alexa (12:17):
Unlike maybe more exclusive or difficult to reach
luxury markets, Playa's ease ofaccess means you have a more
dynamic market, potentially moreliquid,
Bob (12:24):
more people who can easily buy or rent there
Alexa (12:27):
precisely, which generally makes it a more
resilient market for propertyowners
Bob (12:31):
and that ease, that constant flow of people wanting
to come and come back again andagain for the investor that
directly generates consistentdemand.
Boosts, ROI, potential and fuelsappreciation.
It's a powerful feedback loop.
Alexa (12:46):
It really is a self-reinforcing cycle.
Bob (12:48):
So let's recap.
We've just unpacked several keyfactors that make Playa Ade
Carmen such a compellingresidential real estate
investment opportunity.
We talked about understandingyour strategic objective first.
Alexa (13:00):
Absolutely foundational.
Then it's unbeatable location inthe Riviera May,
Bob (13:04):
right?
The explosive demographic andtourist growth, fueling demand.
Alexa (13:08):
Can't forget the attractive return on investment
potential.
Linked heavily to that location
Bob (13:12):
and critically the need for excellent property management to
actually realize that potentialso important.
Alexa (13:18):
And finally, those incredibly low barriers to
entry, thanks to itsaccessibility.
Bob (13:23):
A lot to consider,
Alexa (13:24):
and this is really just.
Part one of our deep dive intoPlaya del Carmen investment.
There's more to cover,
Bob (13:29):
definitely.
And our next deep dive, we'll begetting into some other crucial
aspects.
Things like legal certainty,legal, security,
Alexa (13:36):
very important, especially for foreign buyers.
We'll talk about structures liketrust, the fideicomiso, which is
essentially the legal vehicle,allowing foreigners to own
property in certain zones inMexico,
Bob (13:47):
right?
Demystifying that.
And financial transparency.
Other key considerations
Alexa (13:52):
among many other topics.
It's gonna be another packedsession.
Bob (13:55):
You won't wanna miss it, but for now, as you ponder all
this, here's a thought.
If defining your investmentobjective is the foundation, and
location is the bedrock.
How might the eternal summer ofPlaya del Carmen redefine your
understanding of what a trulyyear-round investment can look
like?
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