Opinions on Tulum MX

[Eric Cieslak]

Bought my first property in Tulum MX via cash pre-sale last year. Looking to yield both cash flow and appreciation for 5 yrs minimum...plus have a place to hang out once in a while :) 

Now looking to get into potential land deals as the growth opportunity seems to be there.

Any other Tulum/ Yucatan investors that can share their experience/ situation/ opinions would be appreciated!

[Mike Lambert]

@Aaron Logan @Eric Cieslak

No worries. Happy to share my knowledge and market intelligence. This is part of what BP is for after all.

A lot of the speculative activity has occurred in Region 15 over the last couple of years based on the fact that it's the one closest area to the beach aside from the Hotel zone (the area where I was offered the deal I mentioned above is even closer). Land prices have gone up by hundreds of percent and more than doubled in a single year. A huge part of the activity in that area is due to the new beach road, Kukulcan Avenue, who would be the quickest link between the town and the beach and would pass right through Region 15.

Most of this road has already been built, except the very end close to the beach. What hardly anybody knows, including the locals, is that the people owning the land through which the road has to pass are refusing to let the road pass (I know because I know the owners and have even met them). As a result, the road might never be finished and people staying in Region 15 might have to do a huge detour to get to the beach, whereby the Region would lose a big part of its appeal. Almost everybody believes that the road is going to be built so that'a already reflected in the land prices so an agreement to finish the road shouldn't push prices further up.  If the road doesn't get finished, there's huge potential downside there, not to mention the overbuilding issue I discussed in my previous post.

Investing overseas is awesome when done properly. Again, this example shows how important it is to have the right knowledge or be connected to people who have it. Thankfully, BiggerPockets helps with both! :-)

To conclude, I personally don't invest where the potential downside much exceeds the potential upside. I look for the exact opposite!