The truth about cheap Real Estate in Tulum
As Tulum Real Estate is starting to see mass adoption from international investors, it is no surprise that developers want to capitalize on this opportunity and catch a bigger upside.
There are two ways on how they can catch that upside:
1) By delivering high-quality properties that take longer to build but can be sold at higher prices.
2) Using the quantity-over-quality approach and building more, faster, but at the cost of longevity and quality.
In this article, we will focus on the latter and answer the following questions:
Who should buy cheap and low-quality Real Estate? Yes, there is a buyer for this.
How to avoid being sold low-quality Real Estate if it's not for you? Red flags to look for
First thing first, how do I know about the issue with low-quality Real Estate in Tulum?
Answer: I spent months living in several properties built and handed over to buyers in this particular way. Moreover, I saw more of them being built in real-time and got introduced to development plans for future such projects. This bad experience led me to learn about Real Estate in Tulum in-depth and later motivated me to create the TulumYourHome platform to help international investors avoid the inherent risk of not knowing the undisclosed information.
Who should buy cheap and low-quality Real Estate in Tulum?
If your sole goal is to have a hands-off investment that generates monthly income and appreciates at 6-8% interest per year for the next 3 years, and you yourself are not planning to use it as a vacation home, then you might consider buying such property.
Pros:
Hands-off approach. Usually, these properties are sold by companies that also offer property management services, meaning they will take on all tasks associated with renting: prospecting for clients, paperwork, cleaning, management, etc.
Cheap. Prices can start at around $70,000.00 - $80,000.00 per one-bedroom unit.
Cons:
Bad quality. What exactly I mean by this? Don't get surprised by poor sound insulation, water problems, electricity problems, the longevity of materials, etc.
You might experience trouble selling it later. It is already a problem here in Tulum for 3-year-old poorly built properties. With the development boom that Tulum will undergo in the next 5-10 years, don't expect it to be easy to sell an old low-quality property when so many new ones appear each year.
Time is your enemy. Quality means Longevity. Low quality means you have limited time to figure out how to dispose of the property. Low-quality properties tend to loosen their investment attractiveness as the poor quality truly shines as time passes.
More often than not, it's a bad experience for those who end up renting such property. You might not care about the experience people receive while staying at your place, but if you do, you should consider this as a disadvantage of owning a low-quality place.
Author's note: If you are knowledgeable about your investment in cheap and low-quality real estate, have a specific goal for it, and sure about your exit strategy, then it might be a good opportunity for you to own money-generating property for a couple of years.
How to avoid being sold low-quality Real Estate if it's not for you?
If you are not looking for mid-to-short term money-generating cheap property with outsourced management, then you might wonder what red flags to look for when being presented with real estate listings in Tulum.
Low price. There can be good properties at a low price, but they are rare, and, more often than not, quality reflects the price. Be sure to consult as many different and knowledgeable parties as possible before zeroing-in on a particular deal.
Everything sounds fantastic! It is easy to fall into a wonderland when the real estate agent paints you a picture with rainbows, unicorns, and how fantastic everything about this cheap property is. When it comes to such pictures, you should be the biggest doubter there is. I haven't seen a single cheap property in Tulum that hasn't had any drawbacks to it.
Your realtor is also a rental property manager. This is usually the case for builders who populate Tulum with cheap properties. They build, sell, rent, manage, and have their own in-house real estate agency.
Other apartments in the complex where you are looking to buy an apartment are used for rentals only, and owners themself do not leave there.
To conclude:
There are chap low-quality apartments in Tulum.
Figure if this is the kind of investment you want to make
If it's not an investment you want to make, know what red flags to look for when searching for Real Estate in Tulum to not ending up buying low-quality real estate.
Thank you for your time,
For any questions related to Tulum, you can contact me here.
Best regards,
Alex, your personal Tulum insider.