Own For Less Than US$100,000 In One Of The World’s Most Appealing Oceanside Retreats
“Prices depend on the neighborhood and the amenities. You get what you pay for. It’s all over the map,” explained property broker Wayne Franklin to our group at the Live and Invest in Puerto Vallarta Conference last week.
“Bottom line, though, it is possible to buy a condo here for as little as US$100,000 or less, and that’s a remarkable thing given the location and what you’re buying into.
“The market in Puerto Vallarta is unique, a kind of a microcosm in relation to the rest of the country,” continued Wayne, who has been a full-time expat in this part of the world for 16 years.
“No question, the market is down from its pre-2008 heyday. There are fewer buyers, but there are buyers. Interest has shifted, though. It used to be primarily Americans buying in this part of Mexico. Before the collapse of the market in 2008, 70% of our buyers were American, 20% were Canadian, and 10% were Mexican. Today, the market is more evenly split among those three groups.
“Prices are down from the peak, and, yes, fewer buyers means better deals. Shopping here, though, you have to keep in mind an important fundamental about this marketplace. About 95% of the property here in Mexico is held debt-free, with no loan against it. That means that few sellers, even in this down market, are in a need-to-sell position. Most of those selling want to sell. It’s possible to negotiate big discounts off asking prices but not typical. This may not make sense to you, as a buyer coming into such a down market, but it’s the reality. You can offer 30% off the asking price, for example, but be ready for the seller to turn you away.
“In Bucerias, 8 miles north of downtown PV, you can buy oceanside for US$70,000 to US$100,000. Larger condos in this area go for US$200,000. One 10,000-square-foot, six-bedroom property here is on the market for US$1.5 million. That works out to about US$150 (about US$1,600 per square meter). That’s a good price.
“Another place currently on offer in the area of Marbella is 1,000 square feet, two bedrooms, two baths, just off the ocean. Asking price is US$115,000. A 2,000 square-foot, three-bedroom ocean-view condo nearby is listed at US$400,000.
“Other notable areas for expats to consider, depending on your budget, include Punta Mita (20 miles north of downtown), a beautiful gated community popular with high-profile executives, movie industry people, and celebrities; La Cruz de Huanacaxtle, with its new marina and sailing culture; Bucerias, an increasingly popular community, reminiscent of what PV used to be like 40 or 50 years ago; and the Flamingo area, with its golf course.
“One important advantage to being a buyer in this region is that, unlike in the rest of Mexico or most of the rest of Latin America, Puerto Vallarta has an MLS system, meaning it’s much, much easier to search for what fits your criteria.
“Another advantage is that it’s possible to get a local bank loan as a foreign buyer. As I said, this isn’t the norm; most buyers still pay cash. But it can be possible for you to borrow locally.
“And the third very big plus for buyers here is that, if you buy right, you can see a good return from renting your place out when you’re not using it. Many North Americans and Europeans choose Puerto Vallarta as a part-time retirement or second home destination. They live here for three to six months per year, while the weather is particularly unappealing wherever they come from. The rest of the time, six to nine months per year, they make their condos available on the short-term market, as vacation rentals. This region is one of the most appealing for this kind of investment in the world right now. The high season runs from Nov. 1 through April 30.
“If your idea is to buy a place that you’d use part-time and then rent out the rest of the year, some things related to property purchase became important that otherwise wouldn’t be. When shopping, you need to remember that you’re not buying only for yourself. Don’t choose a place based solely on what you want or what you think you’d enjoy. Take into account what others will be looking for, as well.”
“I have a client from Chicago who’s an accountant,” added Juan Garcia, who operates a rental management agency in the Puerto Vallarta area. “He rented from me for three years before deciding to purchase. When he bought, he chose to invest in Molena de Agua. His unit is probably the best I have in my inventory (which includes 300 rentals).
“This guy is doing very, very well…because he was open-minded in his purchase. He came to me and said, ‘Tell me what I need in my condo to get it rented.’
“I told him that he needed Internet, a safe box in every bedroom, a DVD player and flat screen in every bedroom, etc. He followed my advice, and, in a year, he’s made back 10% back of his total investment (which was more than US$700,000).”
Kathleen Peddicord
P.S. We’ve been sharing stories and insights from last week’s Live and Invest in Puerto Vallarta Conference this week…but we realized overnight that we’ve neglected to give you a glimpse of what this beautiful part of Mexico looks like. We asked PV expats who participated in last week’s event to send some photos.
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