Mexico’s Next Big Thing
“The market in Mexico’s Riviera Nayarit is stronger than ever right now,” writes Aaron Fisher of Developer Direct. “We continue to see record-breaking sales for development, investment, and second homes.
“Mexico is the seventh most visited tourist destination in the world,” Aaron continues. “And it is estimated that, by 2013, Mexico will be the world’s second-fastest-growing tourist market.
“Still, it’s an emerging destination. It’s been only in the past decade that banks have come in to offer loans to foreigner buyers. Historically, Mexico has been stringent with its lending policies and has never catered to a sub-prime borrower. The result is a low public sector deficit with increased lending to foreigners looking to purchase in this country.
“Because Mexico was, until recently, a cash-and-carry market, this new lending stimulus has launched an influx of foreign investment from a new demographic in the U.S. and Canada.
“Of course, I’m a developer. You may find it hard to accept my position as unbiased. Nevertheless, the truth is, there has never been a better time to live and invest in Mexico than right now.
“All the rules of buying in a developing market and in this part of the world apply. Be sure you’re buying titled property and invest in title insurance (we work with First American Title, the biggest title company in the world).
“Government in this country has never been more reform-minded, and we have seen the passing of the torch from Vicente Fox to fellow Harvard classmate Felipe Calderon. That’s two U.S.-educated presidents in a row.
“Not to mention that Mexico has stepped up to agreements signed with NAFTA and is making big headway toward meeting international standards for infrastructure and government policy.
“We have five new state-of-the-art hospitals offering cutting-edge medical and emergency response care at a fraction the price you pay in the U.S. Prescription medicines are cheaper, too, and you can get a well-rounded health insurance program for as little as US$300 per year.
“After10 years living on the Riviera Nayarit, however, I’d say that the biggest reason for thinking about joining me down here is the lifestyle. For me, this means easy access, good weather, a low cost of living, and opportunity.
“The Riviera Nayarit is easy to get to with more direct flights to major U.S and Canadian cities than almost any other part of Mexico.
“The climate isn’t extreme. We enjoy an average winter temperature of 25 to 26 degrees Celsius (that’s 77 to 79 degrees Fahrenheit) and more than 330 days of uninterrupted sunshine. Plus, water temperatures rarely fall below 78 degrees Fahrenheit.
“Regarding the low cost of living, let’s face it: Mexico is cheap. Maybe not cheap the way it was a decade or more ago, but still your money goes a long way. Services cost far less than in the States, for example, allowing you luxuries normally reserved in North America for the wealthy, like a housekeeper, a cook, and a gardener.
“As far as opportunity goes, Mexico is a developing nation with a strong appreciating market. The ‘World Investment Prospects to 2011’ report from the Economist and the Columbia Program on International Investment predicts that direct foreign investment from 2007 to 2011 in Mexico will average US$22.7 billion annually, the 5th greatest rate among developing countries and the 17th greatest in the world.
“Infrastructure is a key consideration when choosing a market for investment. A new highway has been built stretching from Puerto Vallarta up to phase one of the Riviera Nayarit, and our airport has tripled in size over the last two years.
“Another important consideration is the local market. Is there one? This can go a long way toward helping you ride out global ups and downs. In this part of Mexico, Mexicans themselves account for more than 50% of the tourist income; the other 50% is covered by North Americans and Europeans
“Furthermore, Mexico has one of the fastest-growing middle-income demographics in the world. The minimum wage in the Riviera Nayarit is the highest in Mexico, meaning our area is sought-after for employment. Laborers from all over the country migrate here, allowing developers and builders to select the most skilled workers from a big pool.
“I mentioned already the importance of verifying the title to any piece of real estate you consider purchasing in this country. In addition, you want to make sure that the developer has all the required permits in place to do what he represents he’s going to do.
“You want to make sure the developer has the ability to build and that funds are being set aside in escrow during construction. You want to know that he has the available liquid cash flow to complete.
“And you want to make sure you are comparing apples to apples, both among different developers and developments you might consider in the country and between what you’re looking at in Mexico and what you know from back home.”