Making money in paradise
Mexico?s Pacific seaboard ripe for investors
Clayton Jarvis
Canadian Real Estate Wealth
Investors looking for opportunities in Mexico have no shortage of choices, but an unconventionally located option on the country’s left coast is one of the most exciting to come along in some time.
With Acapulco a ghost of its former self and Puerto Vallarta forever struggling to achieve something more than third- or fourth-option status from travellers, investors looking for upscale vacation rentals south of the Rio Grande can be forgiven for ignoring Mexico’s west coast. But the country’s Pacific seaboard is dotted with charming and culturally rich resort towns, many of which are a short flight from Mexico City.
400 km south of Acapulco lies Puerto Escondido, one of western Mexico’s most popular destinations for both surfers, who flock year-round to the hulking turquoise waves; foodies, who have come to regard the region as one of Mexico’s culinary holy grails; and families, who can locate some form of enjoyment around every corner.
But Canadians, investors and travellers alike, have come to expect levels of service, class and comfort from their Mexican digs that most Puerto Escondido-based hotels and resorts simply can’t deliver. To find the amenities, style and attention to detail that are the hallmarks of a prime vacation rental opportunity, a short drive up the Emerald Coast to Vivo Resorts will most definitely be in order.
Vivo Resorts, the brainchild of Canadian Olympic skier Cary Mullen, is a 75-acre gated community of luxury condos and private homes facing the endless blue of the Pacific. By early 2019, Vivo Resorts will be home to 200 condo units and 14 sprawling private homes, but that’s just the beginning. At full build-out, Vivo is projected to consist of 600 condos, 114 private homes, a pedestrian esplanade and a broad mix of shopping options.
It’s an ambitious project for an area of Mexico that is just starting to garner wider appreciation, but confidence runs high at Vivo. And why shouldn’t it? Most of the completed units have already been sold (construction on new buildings doesn’t begin until 75% of the units have been spoken for) and occupancy rates during peak season are delectably high.
It’s not hard to see why. Vivo Resorts provides guests an exquisite resort experience. Mouth-watering meals are lovingly assembled using locally-sourced ingredients. Two immaculate pools, one for the kids, one for the grown-ups, provide ample relief from the heat. The sunsets are hallucinogenic; the beach endless. The on-site activities range from relaxing (yoga sessions, spa treatments, children’s cooking classes) to the life-changing (releasing baby sea turtles into the wild) and those taking place nearby, including sport fishing excursions, sea safaris and nighttime visits to bioluminescent lagoons, add a dose of wonder to any vacation.
Getting in Investors have a range of options for capitalizing on the growing interest in Vivo Resorts. Condos range from spacious studios to astonishing two-storey units, all fully furnished and impeccably decorated. Prices start at a mere USD $219,000, but those looking for more space should prepare to spend at least $375,900 for just under 1,100 square feet.
Vivo Resorts’ private villas should also be attractive to Canadians tired of paying exorbitant prices for sub-optimal detached homes. Custom-built beach homes at Vivo start at USD $140 per square foot. A the upper end of the spectrum, investors can land a fully furnished 3,000 sq. ft. palace with a pool, parking, UV water treatment system and fresh water cistern for USD $478,000 (plus the price for the home site). But options are available for almost any budget.
Vivo Resorts offers owners who place their units into the rental pool a generous 70-30 split, taking over all marketing, maintenance and cleaning burdens. Nightly rates range from $140 (mountain view studio) to $380 (private villa) a night during the regular season, but they skyrocket to a range of $225 to $1,200 around New Year. If a 1-bedroom ocean view unit that rents for $172 a night in regular season was occupied for 60 days out of the year – a fairly low threshold to cross – its owner would be looking at approximately $7,200 in rental income.
Investors with experience casing the Mexican market know that owning properties near the shoreline can be tricky for non-Mexicans. But recent changes to Mexican law allows foreigners to purchase properties through a Mexican Corporate Trust. Purchasing property through a Corporate Trust not only allows a foreign owner to use, improve, lease and sell the property, it also results in lower closing costs and frees the owner from having to obtain an FM3 work visa in order to legally collect rental income.
And as Vivo Resorts increases its profile, that rental income is sure to increase as well. Mexico is still a first-choice for many North and South American travellers, and those wanting something more than a noisy, crowded week in Cancun are sure to find in Vivo the idyllic escape they spend the year dreaming of.
“We have people living here full time. I see their lives and I envy them,” says Paris Cendejas Villar, Vivo Resorts’ director of sales and marketing. “They wake up in the morning, they’re having a coffee on their terrace, they go down to the pool with their computers and they’re running their businesses. They’re making money in paradise, and I’m like, ‘That’s what I call a life.’”
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