How To Invest in Colonial Mexico Real Estate

One of the Mexican real estate choices recently gaining more attention are colonial properties. While Mexico has long established its excellence in beachfront communities, and many investors have …

One of the Mexican real estate choices recently gaining more attention are colonial properties. While Mexico has long established its excellence in beachfront communities, and many investors have seen excellent return on their property purchases in these areas, the colonial cities are still a relatively new market for non-Mexican buyers. These colonial cites are much more dependent on Mexican economic patterns rather than global ones.

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For investors this means that the properties will see slower and steadier increases, less susceptible to housing bubbles and economic slow down. This is partly due to the lack of institutional lending for property purchases, and the strictness with which these products are being released, along with the resulting lack of need or willingness of owners to sell at less than the price they believe is right.
On the other hand, if an investor can purchase a property in an emerging location before international tourists and large-scale investors take notice, they may see their property value increase drastically with upcoming growth. The following factors are good indicators.
Strong Tourism from Mexican Nationals
An example of this is the city of Morelia in the central interior of Mexico, directly between Mexico City and Guadalajara. Locally, it is claimed that Morelia is Mexico’s most visited city not on a beachfront; whether the claim is true or not, it does receive many national visitors, and for this reason it has also been receiving an increasing amount of investment.
Although it is less than what international tourism would bring, the fact that the city center is already restored and beautified, means it is a likely candidate to catch on with international tourism. With features such as night-time lighting on cathedrals, many well landscaped parks and an authentic colonial atmosphere, the city of Morelia is also a regional center with quality hospitals and modern shopping centers.
Morelia real estate can be found for very reasonable prices. The nearby villages on Lake Patzcauro, which likewise date back to beyond colonial times, are also good picks.
International Investment Nearby
Of course, if there are signs of large scale international investment already taking place, this is perhaps a little more certain. One example is the city of Campeche, on the Yucatan Peninsula. Following the success of places like Cancun and Playa del Carmen on the other side of the Peninsula, and of Merida just about 2 hours north, one European developer (Grupo Mall) has already begun delivery condos in an upscale golf – marina development less than 30 minutes outside of town. A second golf course development has been announced early in 2010.
The state government has likewise invested considerable funds into completely restoring the colonial city center, with underground wiring, repainted facades and new mouldings on both private and public buildings, as well as homes. The idea of buying a colonial home on a street where at least all the facades have been redone is more appealing, and more likely to resell for a higher amount; while the international investment appearing in the area is a good sign that things will not only stay this way, but get better.
Property Options to Consider
After identifying a suitable colonial city for investment, a buyer will need to consider property types. While real estate investments focused on rental income can be beneficial, colonial properties are unlikely to show high-potential as vacation rental (long-term rental, yes). Two main property options to consider are:
A Colonial Fixer-Upper
Find a street or neighborhood with high potential for other investors to fix up nearby homes, or where they have already done so. Walking distance to main attractions is a good choice. Many of these homes haven’t been taken care of for decades now, but have plenty of potential. Make sure to have a professional home inspection done, though, to ensure the structure is worth your money and time to convert it into a colonial dream home.
Projects such as converting old warehouses or estates into condominiums are also catching on in Mexico, with an appeal both to Mexico’s middle class and to foreign buyers. Unlike North American cities, converted churches aren’t really an option – Mexican’s tend to stick to their religion.
You might be surprised by the low price of a high-potential property; but if you wait until too many Americans or other foreigner buyers have come around asking about he price, you might be surprised by how much more they begin to ask.
Land Purchase
If the area your buying in is growing rapidly, with or without foreign real estate buyers, a piece of land in a fairly central location can offer many possibilities for development, both residential and commercial. High-quality new condos in a gentrifying community can be appealing to a wide range of buyers who want to enjoy the lifestyle and charm of the old city, but live in the comfort of a modern building.
Research Mexico’s colonial options – Morelia, Campeche, Mazatlan, Merida, Campeche and numerous others, and contact a qualified, experienced agent from that city to help you find the property right for your colonial investment plans.

 

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