One new gated community in Playa del Carmen, La Escondida, offers investors an excellent opportunity to capitalize on a market which very few developments, hotels or condo rentals are tapping into; accessible rental rates in a small boutique community, which offers visual appeal, a high-quality lifestyle with many activities and many services focused on convenience and maximized enjoyment of both the community and the entire Playa del Carmen area. La Escondida is a full-ownership condominium community, with built-in features to offer return for investors, which are as follows:
The market of accessibly priced vacation rental alternatives to hotels and large-scale resorts has gained very little attention in Playa del Carmen. Vacation rentals tend to high-end (and high priced) condos on the beachfront. The market for lower priced rental is large, and growing, as more North Americans and Europeans consider tighter budget needs in their traveling. The services and design of La Escondida have been planned to optimize vacationers’ experience in the area. The prices and monthly fees are very accessible for investors, allowing them to offer their unit at a low, competitive price will still enjoying good return.
High Lifestyle Appeal to Vacationers/Snowbirds
Both La Escondida’s property design and services will make it an appealing option for vacationers, which include:
72% green space and common areas
small community atmosphere – only 50 properties on 13,000 sq. mt (140,000 sq. ft)
high safety level – gated entrance, with newest technology in security
swimming pools, club house and a gym
planned activities
location next to a large mall, with large international stores and English movies
concierge and transportation service
front door pick-up, drop-off and baggage delivery
on-site tour provider
While other affordable rental options will simply provide a place to stay with a kitchen and maybe a pool, La Escondida will provide renters with an active and relaxing on-site experience, with full access the area’s attractions, easily and conveniently.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
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- This is not a loan. These tax credits do not need to be repaid
The developers of La Escondida are providing an online rental management system which will allow owners to control their property’s rental from anywhere in the world with internet access. Owners will be able to analyze:
- Rental Revenues
- Utility Usage and bills
- Bank Deposits
- Vacancies and Bookings
- Property Tax Charges
Low Maintenance and Rental Management Fees
To be able to offer accessible rental rates, investors need to ensure that their own expenses will be minimized. The condos fees for these units are only $350 USD per month for the largest unit (a 4 bedroom stand-alone villa, with 240 sq. mt. [2580 sq. ft.] of living space.) Similar properties in the Playa del Carmen area can have maintenance fees of up to double this. Part of La Escondida’s method of keeping rates maintenance fees low is to use alternative energy and resource sources, combined with the city utilities to ensure that residents and guests continue to enjoy complete comfort.
Rental fees are projected to be 20% of gross rental revenue.
The cost of investing in a property in La Escondida in the first place is also very accessible. The property prices begin at $207,000 USD, for a 2 bedroom 102 sq. mt (1100 sq. ft.) apartment-style condo, to $420,000 for the large villas.
La Escondida lowered costs is by choosing a location back from the beachfront. The community is located in a newly developing area which is seeing only high-quality land and condo projects. This contrasts to other low-cost rental options which would also be back from the beach, but without the transportation, planned activities, services or mall next door, and may not be in nice neighborhoods.
The following statistics point to the potential annual return for investors. Playa del Carmen’s occupancy rate in is well over 80%. Counting on only a 74% average annual occupancy (source: Fideicomiso for the Promotion of Tourism), a property will see:
positive cash flow between 20 and 30 days of rental (depending on the property)
Net Operating Income (NOI) of $42,000 – $60,000 USD annually
A worse-case-scenario study assuming the levels at the peak of the recession combined with the impact of the H1N1 influenza outbreak in 2009 of 37% shows that NOI would still reach 50% of the given numbers if the situation lasted for a year; the real situation lasted weeks, and it is unlikely to repeat, especially for a longer period of time. The numbers take rental management, maintenance fees, utilities and property taxes into account.
Investors interested in tapping into a relatively untouched market through a property that offers high appeal to vacationers in a continually growing tourist community will find a unique and profitable opportunity in La Escondida.
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