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Mexico real estate can be an excellent investment both in terms of lifestyle and in terms of financial gain. One of the most attractive features of investing in Mexico’s market is that there many options for low-budget investment, making it possible for those on a lower budget to “get their foot in the door” of good real estate investment, to diversify investments or for those trying investment in Mexico to start off small to “test the water” before moving on to larger projects. The following are some of the approaches those investing on a lower budget can consider as viable options in Mexico.

Price Reductions – Speaking very generally, most of Mexico’s real estate market tends to be more stable than much of the U.S. Part of the reason is that Mexicans are more likely to just wait things out rather than reduce their price to sell quickly. They have a different seller’s mentality. However, there are a number of regions where many Americans and Canadians own homes or condos and bring our sales mentality with them. Maybe sales are temporarily slow, maybe they’ve already bought a new property, or maybe they have personal pressures (financial, family, etc.); in these cases they are likely to lower the price to sell quickly. Especially in high demand areas, these kinds of price reductions go fast, so it is important for buyers to be on the ball, do their homework and be ready to move quickly and safely backed by adequate knowledge.

Low Market Areas – In handful of areas, there were enough Americans buying just before the U.S. housing crisis that when the crisis hit, prices dropped significantly in these expat markets as well. The high demand before the crisis brought a large supply of high-quality, new properties to the market, meaning buyers have their pick of very fine real estate options designed for an upscale market at prices significantly lower than usual. Owners reselling also had to adjust their prices accordingly. At the same time, it looks very likely that the best of these areas will get back on their feet; strong tourism appeal, Mexico’s ongoing efforts to boost tourism and foreign investment and extremely good infrastructure and lifestyle already existing all suggest that within the next few years, prices will be back up to normal. Now is a great time to invest. Two examples include Rocky Point (Puerto Penasco) and Puerto Vallarta.

Up-and-Coming Areas – Mexico has begun an effort to position itself within the top 5 international tourist destination countries. There is also an ongoing (and successful) effort to draw tourism from emerging economies and BRIC countries;  Russia and Brazil have seen especially large increases, creating enough demand to open more direct flights. This growth means that new tourist areas are being discovered. Undiscovered tourist areas tend to have really low prices even for beautiful beachfront real estate; once they are discovered this can change very quickly, as happened in the recent past in places like Playa del Carmen. Buyers should look for somewhat unknown areas with “buds” of future tourism – reasonable access, existing attractions like nice beaches and well kept up towns and cities with good atmosphere, new golf and marina developments, etc. Two examples are Costa Maya, 4 hours south of Cancun, and Campeche, 2 hours west of Merida.

Pre-construction Discounts – In areas where the market is currently growing at a healthy pace (like Playa del Carmen) this is a viable approach. Buyers will need to work closely with a knowledgeable and professional agent to evaluate the reputation of developers. These two factors in place, a buyer can enjoy virtually instant appreciation as the complex is completed and condos are sold at their listed price.

Mortgage – Mortgages in Mexico – for Mexicans and non-Mexicans alike – are a fairly new phenomenon. As with any mortgage, the option gaining a mortgage with a Mexican bank allows a buyer to start with a minimal investment – usually 30% of the sale price as a down payment plus closing costs, which can range from 4-7% of the sale price. The advantage over gaining a mortgage in the buyer’s home country is that they can leverage the mortgage against the same property they are buying to avoid tying up valuable home equity on a previously owned property.

Remember: Work with a Reliable Team

Finally, in each of the approaches mentioned above, it is of high importance for investors new to buying in Mexico or new to buying by means of one of these approaches to work with a reliable, professional team to guide them through the process. Whether it is to help the buyer know the reputation of a developer or to identify, evaluate and move on price reductions quickly and safely, an agent with qualifications (degrees, certificates), membership in Mexico’s professional real estate association (AMPI) and significant experience will be their best guide to buying on a low budget with minimal risks.

Investing in Mexico real estate can offer great potential in low cost properties; these tips will help buyers know how to find even greater savings and potentially increased return on their low investment.