Is a house in Puerto Vallarta a good investment? Case study with capitalization rates.
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- čas přidán 4. 07. 2024
- Paul & I sat down to discuss the Puerto Vallarta real estate investment market, and went through a detailed case study of a house for sale in the Zona Romantica of Puerto Vallarta.
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00:00 Introduction
01:40 Lock off condos in Puerto Vallarta
02:50 Viewing of historical house in Puerto Vallarta
07:45 Case study of cap rates for a house in Puerto Vallarta for long term rental
13:10 Property management costs in Puerto Vallarta
13:30 Pool maintenance costs Puerto Vallarta
14:20 Cap rate for long term rental Puerto Vallarta
14:35 Case study of cap rates for a house in Puerto Vallarta for short term rental and Airbnb
15:30 Occupancy rates Zona Romantica
18:00 Cap rates for short term rental Airbnb in Puerto Vallarta
20:10 Catalysts for real estate in Puerto Vallarta
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No part whatsoever of the discussion and presentation is, or should be considered as, investment advice, financial advice, legal advice, or tax advice. Always do proper due diligence and speak to a qualified professional advisor in your jurisdiction. Also, be advised that Ladislas Maurice and The Wandering Investor staff may own real estate or investments in the specific markets or opportunities that are discussed. The Wandering Investor may also have marketing agreements in place with certain opportunities that are mentioned.
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There are two expenses you failed to mention. One is the cost of insurance. PV is in a seismic area. I hope anyone who considers that house will have a structural engineer examine it. ( I've seen a few multiple story buildings with substandard amounts of rebar and less than desirable placement of structural/foundational elements). Secondly, there used to be the annual cost of the bank holding your trust of $600 (unless you're a Mexican citizen). Both reduce your cap rate.
The problem with Puerto Vallarta is that it's just to expensive now, the bubble needs to burst, and then maybe airbnb will make sense again.
Never understood these high prices anyways, 600k for a house you can't even even drive too, only 250sq meters? that's pretty nutz, in someways it's more expensive for what you get in most US states at this point, and it's definitely more expensive than Playa del Carmen.
Well Said !
If your thinking to purchase and rent. Look at how many rentals are available in low season spring and summer. I think those days to purchase and renting to make money those days have sailed away.
Numbers don't work out-- Hautulco, Mexico is less expensive & less crowded. ( Hautulco is very Hot in summer). If you are going to buy, live there for a year---Real estate sales are not regulated in Mexico--there can be 3 different price listing with 3 different sales offices. Being " on the ground' will give you a better position.
I love this house. I think it's more of a lifestyle investment and there is nothing wrong with that.
The cost of travel/lodging seems to have exploded everywhere........its not just a PV phenomenon.
Yes
Rents are so high now I PV . Many r leaving ... especially snow birds..love it...but costly
Cool.
If you have a house by the beach its gonna be a lot of maintenance work. because of the salted moisture.
Here are other issues I find with this property ... It would be miserable climbing those stairs during rainy season. I wonder how the drainage flows or would there be a pool in the common area. Difficult getting deliveries because too difficult to locate. Ordering propane would also be difficult. Cute house, but houses chiseled into the mountain side can be problematic
Definitely not a house for retirees 🙂
It's not a condo so no common areas. The roof top terrace has a small pool.
Very timely! I just got back from the local consulate and they have granted my Mexican residency. I have always loved Vallarta and would love to spend a chunk of the year there. The prices are a bit eye-watering right now, that I don't see buying straight away.
Congrats on getting residency!
Don’t buy in PV. Lots of better spots Nuevo / Bucerias
@@Homer62001 Thanks. I detailed this in my article: thewanderinginvestor.com/international-real-estate/full-guide-to-making-a-real-estate-investment-in-puerto-vallarta/
Dam they got the gringo rental prices. I purchased a lake view property in a small town twice the size of that property for a quarter of what that property causes where i will make a big Italian villa style house with a pool for way less. The weather is great all year round not like where this property is at. You gringos gotta look around because these prices are way high if you are planning to retire out here.
great Case study
Thanks man
When are you going to have Ladisla on your podcast???
We already did! Check our episode catalog
With zero upside potential and in a downturn a decent chance that place gets knocked down 20-30% better off putting your $650k in some long term treasuries and using the $30k plus of income to rent a high end apartment for as long as you want. Ridiculously bad opportunity.
Definitely more of a lifestyle property. That’s how I view the PV market for now. Lifestyle and diversification.
@@TheWanderingInvestor what you describe as “lifestyle” most would describe as “loss making”. Definitely not an “investment”.
Great content and quantifiable analysis. Mexico RE cost in vacation towns seems absurdly high compared to Southern Europe, Montenegro, etc.
In PV especially, yes.
Objectively, most of Southern Europe is cheap.
Great case study videos. This is a new world for me but one I have alwaysbeen curious about....lots of homework to do and just because one city is great vacation spot doesnt mean that its a wise investment...what are your thoughts about Greater Toronto Area real estate up here in Canada? Thanks and keep up. the great work
Thank you. Personally, as long as interest rates are high I wouldn’t be buying up there, in spite of booming immigration which fuels demand.
Yes, lot of panicked owners who are struggling with mortgage payments. Seems like another issue is you would have to be cash flow negative on a month to month basis and then hope prices have appreciated so you sell at a profit large to recover the monthly losses and still come out a winner... thank you.@@TheWanderingInvestor
There are no cap rates on SFR's! Someone is trying to scam you.
Maybe watch the video before writing nonsense? It literally shows poor cap rates
@@TheWanderingInvestor Cap rates are used to value commercial properties. They do not use "asking" prices to calculate a cape rate. It is obvious that you have zero knowledge of cap rates. Geez
@@Walina-gv9ph North Americans often don’t understand the term “rental yields” so I use cap rates. My numbers are transparent. Seriously go watch some other channel. This one is clearly not the right channel for you.
@@TheWanderingInvestor Cap rates are a valuation metric. V=i/r See, it is used to value NOI. What you are doing makes no sense at all and is misleading people. You are either clueless or a scammer. If you are just clueless then it is best that you listen to more experienced people. If you are a scammer then I rightly just exposed you!
Pv is extemely overpriced in most tourist areas
Nice house and must be pleasant to live
Great job again man! I’ve never been to Puerto Vallarta but you set the tone on what to expect!
Thank you
Bad investment, you can get 11% in the banks in Mexico hassle free
As always Ladislas is terrific. Paul's videos are also great. But with the greatest respect to both, there is the issue of the progressive deterioration of Mexican society due to the cancer of the drug/fentanyl cartels whose economic and political control in Mexico is expanding everywhere. It cannot remain invisible and swept under the rug to expats and snowbirds forever. It is sadly a sickening reality that those wishing to escape the deterioration in the US and Canada should not find themselves moving from the frying pan into the fire.....
Thanks. I see your point. It could also be argued that cartels are generally less of an issue than government for foreigners just living there.
@@TheWanderingInvestor How can such a powerful criminal organization be "less of an issue"?? It's power is spreading throughout Mexico, controlling businesses, police, army, politicians with money and threats of assassination..... yet the CZcams community sweeps it all under the rug.....
@@gmg6200 I have recently joined your club. No more Mexico for me either!
@@gmg6200 You honestly shouldn’t worry about this for vacations. It’s a non issue for tourists.
lol villages that look like crap , did he said that ?
He’s full of shit if he says he prefers driving in PV. It’s a nightmare.