It’s no surprise that Forbes recently recommended Tulum in one of their top tips when looking for places to buy an investment property. Beyond the city’s tranquil white-sand beaches, legendary parties, and world-renowned spiritual sanctuaries, Tulum has also become a hotspot for foreign investment due to its attractive property prices and rewarding return on investment.
But whether you’re contemplating buying a villa, land, or apartment, it can be tricky to invest in a foreign country if you don’t know the rules or don’t understand the real estate market.
This is why we spoke to Jeremy Stevenson from Tulum Land and Property, a partner at one of the leading Real Estate Brokerages in Tulum to get the scoop on what people should know before investing.
But whether you’re contemplating buying a villa, land, or apartment, it can be tricky to invest in a foreign country if you don’t know the rules or don’t understand the real estate market.
This is why we spoke to Jeremy Stevenson from Tulum Land and Property, a partner at one of the leading Real Estate Brokerages in Tulum to get the scoop on what people should know before investing.
1. Why should people invest in Tulum over other places?
In the past ten years, Tulum’s population has grown by over 65% and has turned the city from a hidden gem to a global hotspot for travellers and digital nomads.
From an investment perspective, this has resulted in Tulum becoming a buyer’s market, but property prices are rising – fast.
In 2019 the price of an average 3-bedroom villa was around USD$250,000, today this has increased by 60% to USD$400,000.
These prices are set to soar even further with the opening of the Tulum International Airport as well as the high-speed rail link from Cancun to Tulum in 2023, so it is best to invest earlier rather than later.
It’s also useful to know that when comparing property prices to other places, Tulum is twice cheaper than nearby town Playa Del Carmen, and three times cheaper than the median property price on Miami Beach. This coupled with the lucrative return of investment (‘ROI’), ensures buying in Tulum not only guarantees access to a wonderful Caribbean escape, but also a safe and profitable investment.
From an investment perspective, this has resulted in Tulum becoming a buyer’s market, but property prices are rising – fast.
In 2019 the price of an average 3-bedroom villa was around USD$250,000, today this has increased by 60% to USD$400,000.
These prices are set to soar even further with the opening of the Tulum International Airport as well as the high-speed rail link from Cancun to Tulum in 2023, so it is best to invest earlier rather than later.
It’s also useful to know that when comparing property prices to other places, Tulum is twice cheaper than nearby town Playa Del Carmen, and three times cheaper than the median property price on Miami Beach. This coupled with the lucrative return of investment (‘ROI’), ensures buying in Tulum not only guarantees access to a wonderful Caribbean escape, but also a safe and profitable investment.
2. Let’s get into the hard numbers, how much capital do you need to invest?
We offer a wide range of properties in our portfolio that cater to most budgets.
The starting price of a designer 1-bedroom villa is typically USD$125,000, plus closing costs which amount to roughly 7%. Our favourite luxury 3-bedroom villas range from USD$350,000 to USD$500,000 and for more seasoned investors, we also sell reputable hotels on the beach which go into the tens of millions.
It’s important to note that payment can be made in installments, so you don’t need to have all the cash upfront. A typical purchase will require a 30% down payment and monthly or quarterly installments.
Having worked in investment banking for over 10 years, I know how important it is to understand each individual’s purchase power and risk appetite so they can feel comfortable and confident with their investment. My advice would be to reach out so that we can assess what type of investment is best for you.
The starting price of a designer 1-bedroom villa is typically USD$125,000, plus closing costs which amount to roughly 7%. Our favourite luxury 3-bedroom villas range from USD$350,000 to USD$500,000 and for more seasoned investors, we also sell reputable hotels on the beach which go into the tens of millions.
It’s important to note that payment can be made in installments, so you don’t need to have all the cash upfront. A typical purchase will require a 30% down payment and monthly or quarterly installments.
Having worked in investment banking for over 10 years, I know how important it is to understand each individual’s purchase power and risk appetite so they can feel comfortable and confident with their investment. My advice would be to reach out so that we can assess what type of investment is best for you.
3. What type of realistic returns can you expect on an investment?
The average ROI in Tulum is between 8 and 15% – which is extremely attractive when taking into account that the average annual stock market return is 5.4%.
This means, for example, that a 3-bedroom villa can achieve a nightly rate of USD$400. At 70% occupancy, that is over USD$100,000 in revenue per year. With annual expenses of around USD$30,000 (including a professional property manager who looks after all aspects of your property), you can net USD$70,000 per year.
This number is often higher for the types of properties we source and sell. Certain villas that we have sold have a projected ROI of 25% on a USD$585,000 7-bedroom villa – netting an impressive USD$146,000 return per year.
It’s worth mentioning that these returns don’t even take into account the capital appreciation of the property. In Tulum, property appreciation is typically 8% to 10% per year and even higher for land.
This means, for example, that a 3-bedroom villa can achieve a nightly rate of USD$400. At 70% occupancy, that is over USD$100,000 in revenue per year. With annual expenses of around USD$30,000 (including a professional property manager who looks after all aspects of your property), you can net USD$70,000 per year.
This number is often higher for the types of properties we source and sell. Certain villas that we have sold have a projected ROI of 25% on a USD$585,000 7-bedroom villa – netting an impressive USD$146,000 return per year.
It’s worth mentioning that these returns don’t even take into account the capital appreciation of the property. In Tulum, property appreciation is typically 8% to 10% per year and even higher for land.
4. Is the purchase process simple?
Yes, I can break it down into 3 easy steps:
First, you need to find an expert real estate advisor who specialises in helping foreign investors buy in Mexico. Many realtors out here focus on Mexican buyers and don’t understand how to look after overseas buyers properly, for example, when considering tax.
Next, you will need to decide on your ideal property! Whether it’s a beachfront condo or jungle villa, your broker will help you find the perfect property to suit your needs, whether it’s for investment or for living.
Last and by no means least, you’ll need a lawyer to do the due diligence, review the contract and set up your bank trust, which takes 3-4 months. Your broker will be able to recommend a trusted lawyer.
First, you need to find an expert real estate advisor who specialises in helping foreign investors buy in Mexico. Many realtors out here focus on Mexican buyers and don’t understand how to look after overseas buyers properly, for example, when considering tax.
Next, you will need to decide on your ideal property! Whether it’s a beachfront condo or jungle villa, your broker will help you find the perfect property to suit your needs, whether it’s for investment or for living.
Last and by no means least, you’ll need a lawyer to do the due diligence, review the contract and set up your bank trust, which takes 3-4 months. Your broker will be able to recommend a trusted lawyer.
5. What will other property brokers not tell you?
Tulum is experiencing a lot of development right now so when it comes to investing in property, it’s important that you invest in something unique that won’t flood the market in a few years’ time. That’s why at Tulum Land and Property, we focus on sourcing and selling interesting projects that will hold value, remain competitive, and maintain rental yield.
We aren’t interested in selling cookie-cutter projects most commonly seen on the market as we want to provide the best and safest investment for our clients.
We aren’t interested in selling cookie-cutter projects most commonly seen on the market as we want to provide the best and safest investment for our clients.
6. Is there anything else potential buyers need to be aware of?
Tulum’s property market is in its nascent stage, therefore, most properties for sale are pre-construction. We only work with established developers who have an impeccable track record for unique designs and timely delivery. Pre-construction properties are also quite attractive due to their substantial increased value once built which is around 25% to 30% for properties in high demand.
Another important point to note is that potential investors should typically have enough capital for their initial down payment as borrowing is difficult in Mexico as a foreign investor. If you’re concerned about the capital you have available, feel free to contact us as we may be able to structure a deal with other interested investors (commonly known as ‘fractional ownership’) so you won’t miss out!
Another important point to note is that potential investors should typically have enough capital for their initial down payment as borrowing is difficult in Mexico as a foreign investor. If you’re concerned about the capital you have available, feel free to contact us as we may be able to structure a deal with other interested investors (commonly known as ‘fractional ownership’) so you won’t miss out!
If you would like to speak to Jeremy about investing in Tulum, contact him via email (jeremy@tulumlandandproperty.com) or phone (+1 917 675 3408) and quote “So Tulum” in your message to receive investment advice.
Jeremy Stevenson is a Partner at Tulum Land & Property, based in Tulum, Mexico. He spent 10 years in Investment Banking advising the London trading floors of Goldman Sachs, Deutsche Bank, and J.P. Morgan in Hong Kong.
His career in Real Estate began by flipping properties in Central London, during which time he became certified in Mortgage Advice and Equity Release from the London Institute of Banking & Finance.
Jeremy is also qualified as a Chartered Accountant with PricewaterhouseCoopers and is a Fellow of the Institute of Chartered Accounting in England & Wales.
His career in Real Estate began by flipping properties in Central London, during which time he became certified in Mortgage Advice and Equity Release from the London Institute of Banking & Finance.
Jeremy is also qualified as a Chartered Accountant with PricewaterhouseCoopers and is a Fellow of the Institute of Chartered Accounting in England & Wales.