All Forum Posts by: Benjamin Canyon

Hey @Edgar DeLeon - Just be aware that there is a lot of competition in Tulum for vacation rentals, and 1-bedrooms make up most of that (42% of the market currently, according to Airdna). Personally, I would go for a larger property (4+ bedrooms). If that's not in the cards/budget, then I would only do a studio if it offers a significant discount from a 1-bedroom. Your 1 bedroom will mostly be rented by individuals and couples, but it at least gives you the flexibility to put a sofa bed in the living room and sleep up to 4 people.

Regarding choosing a developer, I really recommend visiting one of their previous developments in person so you can see finish quality. Ideally a property that is a couple years old.

Hope that helps! Happy to answer any other questions you have being an owner in Tulum but also managing vacation rentals there.

@Michelle Reshel I own several properties in Tulum and also manage a portfolio of vacation rentals there (my properties included). There are some great opportunities in Tulum. Also some risks. It's important to think carefully about (1) the type of property, (2) the developer, and (3) location. There's a lot of supply on the market so one really needs to stand out on Airbnb to be successful. A lot of competition. And certain properties work better than others. Hope this helps and happy to answer any specific questions you have!

@Patrick Sullivan Fancy seeing you here! :) I hear you on the construction quality issues and also how difficult (read: nearly impossible) it is to hold developers accountable. It's just really tough and I've lived through it several times.

But following all the stresses, delays, and finish quality issues—once I started making income on my properties, I've come to see all these challenges as the price you pay for the type of ROI you can get in Tulum. Of course this depends on the purchase price, developer, etc., but if you do it right, it can really pay off.

So if you can stomach the roller coaster ride of development projects in Tulum, in my personal experience it has been worth it. For example, on a $250k investment, I'm netting around $70k/year in rental yields (28%), which is pretty solid. I don't think that's very common. But even half that yield is pretty decent.

Hey @Yousef Samy - I've bought a couple properties in Tulum and also manage a portfolio of vacation rentals there (mine included). I wouldn't recommend a 2-bedroom EXCEPT as a lock-off. That's the only way to do it in my opinion. And I wouldn't even bother with the 2-bedroom listing on Airbnb. Just create 2 one-bedroom listings. It will give you higher yields. What price point are you looking at?

Excellent post, @Mike Lambert! I lived in the area for 7 years, own several properties in Tulum, and manage a portfolio of vacation rentals there as well. What you're saying about the importance of vetting the developer is essential. We had a LOT of challenges with a developer that turned out fine in the end but created a lot of stress, delays, and challenges along the way, especially in terms of accountability and finish quality.

Another dimension of risk that few people talk about with Tulum is the ecological destruction, particularly of the cenote system. The environment is the #1 driver of tourism to the region and it's not adequately protected. My hope is that all the money invested in Tulum will lead to significant infrastructure upgrades and investments either by the government or private industry if things get really bad. Without Tulum's beautiful beaches, cenotes, and jungle, why would tourists come? 

The other risk with Tulum is that, in my analysis, the resale market can be really tricky. With so many presale opportunities, why buy a property that's 3-5 years old? Many existing properties sit on the market for a long time or have to significantly drop their prices in order to sell.

All that said, I think there are some great investment opportunities in the area! Investors just need to look for unique opportunities that can compete in the current market.

Hey @Christina A. - did you ever end up buying anything in Tulum? Let me know if you're still looking to connect with agents (happy to refer you) or property managers (my company might be able to help!).

Hey @Robert Gilstrap! I own a few properties in Tulum and manage a portfolio of vacation rentals. It's true that manual service jobs pay poorly compared to the US, but I've found paying our cleaners and support staff well goes a really long way in terms of the level of service we receive. AND we can still make really, really good margins. I own my properties through a trust (fideicomiso) which is how more foreigners do it. Let me know if I can answer any questions!

Hey @Aura State - Did you end up buying anything in Tulum? I own a few properties there and manage a portfolio of vacation rentals. I suspect prices will go down a bit over the next 12 months, but not sure that should stop someone from buying now. Presales are definitely the way to go. You'll get more of a discount the more money you put down. If you feel really solid on the developer and have done your due diligence in person (e.g. visiting the developer's previous builds and inspecting the finish quality, talking to owners of the builder's units, etc.), then personally I feel good about putting more money down to get a lower price. Just don't give them everything up front :) And make sure there are penalties for delays in your contract. 

You'll want a good buyer's agent and also a lawyer. I have contacts for both if you like.

I think there are still great opportunities in Tulum, @Matthew Swearingen. And @Sebastian Papworth is a great advisor to be in touch with. Personally, I've bought 2 properties with him as my agent! 

I did exactly what you're describing with the first property. Got a HELOC on my primary residence and put some additional cash into the investment to customize it. It's had pretty incredible returns. With that amount of money to invest, you just need to be careful because the market is flooded with studios and 1-bedrooms. And in terms of demand, I can tell you from experience that 2-bedrooms have lower occupancy than 1 bedrooms, so it's not worth the extra money if you're after cash flow. I think the best opportunities right now in Tulum are 4+ bedrooms. Next best are 1-bedrooms and studios IF it's an exceptional and also small development, good location, etc. Then you really need to trick out the design so you stand out on Airbnb.

If you're game to hold the property for a while, I think Bacalar is also an interesting place to invest in the area. Has the chance of experiencing solid growth over the coming years.

Let me know if you have any other questions.

Hey @Vivian Huang - did you end up buying a property in Tulum? Let me know if I can help advise!