All Forum Posts by: James G.

@James G.

The Mexican government, through its national fund for the promotion of tourism (Fonatur) has been the master at creating trillions of dollars of real estate value out of thin air, in the good sense. The best example is Cancun and the Riviera Maya. Back in 1969, Cancun was just a coconut plantation. Since then, the Riviera Maya has become one of the world's most visited tourist destinations.

Front-running Fonatur has been a hugely successful investment strategy. We know that they're still investing and planning to invest billions of dollars in Mexico's well-established destinations: the Riviera Maya, Puerto Vallarta - Riviera Nayarit and Los Cabos areas so one of the strategies is to invest in one of those areas. They seem to plan to make the Riviera Nayarit one of the world's main tourist destinations. All these areas have a well-established short-term rental industry so you can get great cashflows while you wait for your properties to appreciate in value. Obviously, this assumes that you buy the right properties at the right prices, as properties won't necessary go up in value indiscriminately.

Fonatur's strategy is so successful that they're clearly gonna keep ringing and repeating it in new locations. So an alternative strategy would be to invest in one of those destinations ahead of Fonatur and you could strike it rich. Mexico has very long coastlines though so you can't just bet but you could strike gold if you get it righted we're making best use of our local connections to find out before the word gets out. However, that strategy tough necessitates a (much) longer time horizon and is obviously riskier and you won't generally great rental income while you wait, if any.

@Allan Smith

"I'm more concentrated on Mexico, which I believe has even more potential, as confirmed with my pals who work at Airbnb."

Thank you to all that contributed to the thread and provided information. Once again, BP proves to be the best place learn about REI. I feel this was a good start to our journey to find a vacation property.

P.I.T.I on 260,000 with 20% down would be around $1430 on a 25 year 5/1 at 5%. 

Should I assume 30-40% of gross rents for property management and turn over? 

If so, $2500/mo or $120/night at 70% occupancy would be breaking even. 

Does this seem attainable?

Two areas I was looking at were Davenport and West of Kissimmee about 5-10 miles. 

Appreciate the insight. 

Jon


 

I just reached out to a property tax attorney about this exact topic in Cuyahoga County. As a standard, there are no automatic increases due to sale in Cuyahoga County. The school board would have to contest the assed value to increase it, but this is very rare and is usually only done when there is a huge increase in sale price compared to county assessed. A $40k increase is considered small.

I use an insurance broker that specializes in rental properties. They shop different companies for the best rates and coverage and then reshop it every year when the policy comes due. I found that by using an agent that doesn't specialize in rental properties that not only do you not get the best rate but often the coverage ends up being substandard for a rental property.