Tulum townhouse vacation rental

[Maria Boykin]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $326,000
Cash invested: $285,000

vacation rental in Tulum, Mexico: sleeps 6-8, 3 bedroom, 4.5 bathrooms, bonus rm, rooftop pool, community pool, gym, rock climbing wall.

What made you interested in investing in this type of deal?

I have a couple of rental properties. I wanted to invest in a property internationally. Mun Tulum was a great community. The developer had lots of experience and I knew a couple that purchased in the same development 3 years prior.

How did you find this deal and how did you negotiate it?

I was cautious about investing internationally. I took a business partner and we both decided to pay more down for a substantial discount off of the purchase price. I also negotiated specific terms in the contract to pay us if the developer went over their the agreed upon delivery date. Instead of cash we got custom features added to the house such as a sliding barn door to one of the rooms.

How did you finance this deal?

We paid cash for this deal. My business partner and I split the cost 50/50. I leveraged money from my brokerage account and gave myself a loan for my portion. It was challenging to find an institution to finance a property out of the US.

How did you add value to the deal?

We added pergola to the roof by the pool for shade and added solar panels to decrease the electric bills.

What was the outcome?

In December, we launched the home on airbnb. We've had 6 guest, 5 traveling tourist and one guest who booked for 2 months while they were waiting for their new condo to be completed. We are still navigating promotion and pricing during a pandemic.

Lessons learned? Challenges?

I definitely learned to vet any potential business partner thoroughly. I ended up doing most of the work when it came to furnishing and setting up the rental and traveling to the location. Deal directly with the developer. You get better discounts and can make custom changes and additions. Apply for temporary or permanent residency (if possible) before or during the process. It will help reduce taxes.