Owning a property in Mexico can be a great investment opportunity. Renting a property is a way to convert your asset into a source of extra income, but before you signing that contract it is necessary to look for the right real estate agent, one that can offer expert advice about the market and has the knowledge of the legal paperwork necessary to avoid any unpleasant surprises.
Our experts gave us 5 aspects to consider, before starting the process of investment rental properties:
1. Long term rental or short term rental property
Before you purchase your real estate property it is important to decide whether it will be used for a short or long term rental. A long term rental property can be rented for a 6, 12, or 18 month lease. This lease is easier because you don’t have tenants coming and going every couple of days to a week, but the down side is the cash return on your investment. In a long term rental the monthly fee is often a lot less then what you could charge for a daily or weekly rental. The short term or vacation rental produces a higher return on your investment but can also be more work. Keep in mind that in the Mexico real estate market there is a high and low season and it is important to adjust the rental rates for the different seasons.
2. Make sure to have all your documentation in order and up to date
Make sure all of the property paperwork is in order. Sadly there are some people offering fraudulent rentals in Mexico, because of this people might ask you for a copy of your deed, youâ€™re ID, or if the property tax and all the bills are paid in full and up to date.
Be prepared so once you find the right tenant, the process of renting will be easy. With the support of the right real estate agent to help you, things can move along quite quickly.
3. Selecting a competitive price for the property
Determining the value of a property depends on several factors such as location, accessibility, services, land use (if it is residential or commercial), development of the area, its size and construction materials. Your trained real estate agent has local market insights that will help you determine a competitive value for your properties lease.
4. Property conditions
Well maintained properties are more likely to be leased and have a higher leasing price. It is very important to review the facilities of water, electricity and gas as well as the A/C units, fans and lighting fixtures. It is also important to keep the property free of debris, trash, and that all of the HOA or maintenance fees are paid. Many owners in the Mexico real estate market prefer to pay the HOA or Maintenance fees themselves, and include it in the rental price. If you chose to have the tenant pay the fees and the tenant fails to make the payments the owner is ultimately responsible and it can be a big expense after a year or more of renting the property.
5. Have a good rental Contract
It is essential to have a contract that explain in detail the requirements and conditions of the rental, condition of the rental return, obligations of the landlord and the tenant, the rent amount, payment due date and penalties for delays. The contract will protect both the tenant and the landlord. The contract may also contain clauses where the causes of termination of contract, such as late payments, public disorder, etc. are established.
After considering all of these tips, the safer way to rent your property in Mexico is to look for a Real Estate Professional who will ensure your interests and your properties interests are in good hands.
There is always a bit of risk when owning an investment property. Many local developers are looking for a safe way for their clients to rent out their investment property.
One of these developments is Quetzal, a condominium complex located in the exclusive Bahia Principe gated community. Quetzal has on-site administration that offers a great rental program giving its residents peace of mind when renting their property and the ability to make a return on their investment without having to go through any of the hassle or headaches commonly involved in renting a property.
If you would like to be one of these savvy investments without all the headaches check out Quetzal.
Now if you have any question of this or any of the TOP MEXICO REAL ESTATE properties we have listed in Playa Del Carmen, The Riviera Maya or anywhere throughout Mexico, please feel free to contact any of our TOP MEXICO EXPERT SALES TEAM and we will be glad to help you find your very own piece of paradise.
And remember, here at TOP MEXICO REAL ESTATEâ€¦
We make it happen!