Spotlight on...Costa Maya, Mexico
Date: 07/31/2008 Author: Suzan HaskinsCosta Maya—buy a piece of pristine Mexican beach from $110,000
by Suzan Haskins
The Costa Maya is for those who enjoy the outdoor lifestyle...fishermen, divers, and those who love warm weather, palm trees, silky sand, and picture-postcard views. If you have been to Cancun, four hours north of here, you have an idea of what the Mexican Caribbean coast looks like. The difference at the Costa Maya is that the water is shallow and, especially south of Mahahual—the heart of the Costa Maya—there is little or no surf.
The one thing that sets the Costa Maya apart from other areas is its beaches. These beautiful beaches are the result of one major thing that the Costa Maya has that Cancun doesn’t—a healthy barrier reef about 300 yards offshore. It’s the same famous reef system that everyone goes to Belize to dive—the second largest in the world after the Great Barrier Reef in Australia. The reef protects the beach, so there are fewer erosion problems.
The Chinchorro Reef is a little more than one hour by boat off the coast from most of the Costa Maya, and it offers some of the best diving and snorkeling in the Western Hemisphere. Amazingly enough, few divers come here. But just a couple of hours north or south, hundreds of divers every day take in the underwater sites near Cozumel or on Belize’s Holchan Reef. On less-known Chinchorro, though, you may have more than 20 miles of dazzling, unexplored reefs and shipwrecks to yourself—and it doesn’t get much better than that.
There is nothing better than catching the first glimpse of the Caribbean Sea after a long day’s journey—those gorgeous turquoise-blue waters and the waves languidly rolling over the reef on the horizon. It makes me slow down, draw a breath, and just stand transfixed. No matter where in the world I live it will be this scene that reminds me why I left the U.S. and headed south.
My husband, Dan, and I have chosen to live in Merida, in Mexico’s Yucatan State, but once upon a time we seriously considered putting down stakes in the Costa Maya…at least I did. Dan is a pragmatist, though, and I must agree. Although this is one of the most beautiful places on earth, it would be hard for us to live here, as we’ve come to appreciate the conveniences and distractions of city living.
There are many opportunities for investment in the Costa Maya. You may want to build a vacation home, a retirement home, a small inn, start a tourist business, or speculate on the real estate market. Many people from the U.S. and Canada and other foreign markets have already invested in the Costa Maya. Some Mexican landowners who have held onto their land for generations are selling. Some may never do so. They know the value of what they have...there is only a finite amount of beachfront property available.
Even though there is a limited supply (just 57 miles) of Costa Maya, some outstanding beachfront property is still available. And while some of it is still being sold at reasonable prices, it won’t last long if Cancun and Playa del Carmen are historical precedents.
Plus...developers are now moving into the Costa Maya. Gated communities are being planned and city blocks and lots are being plotted. So the big question is: how do you decide whom to buy from, and how do you know what the property is worth?
How Costa Maya lots are priced and measured
Property in Mexico—as in most of the world—is measured in meters. Along the Mexican Caribbean, meters of waterfront are what counts. While it is nice to have a deep property, the length does not really matter when it comes to pricing. What does matter is the waterfront width. Currently, prices are ranging from $5,500 to $9,200 per meter of beachfront. A typical residential lot has 20 meters (65 feet) of frontage, and is about 165 feet deep. These lots range in price from $110,000 to $150,000 and more. (Building costs in the area range from about $70 to $100 per square foot.)
Lot prices depend on a number of factors, including: elevation, view from the beach, grade and landscaping (no mangroves), position of the beach road, location, and depth. (Although, remember, total square meters isn’t what counts here—it’s the linear meters of waterfront.) The final price, of course, is determined by the seller. Unless he is in a real pinch for money, we’re seeing sellers hold out until they get the price they want.
Most of the less-expensive lots are around Xcalak (the town just north of Belize). That is because the elevation is lower, the beaches are curvier (you get more privacy but not the expansive coastal view), there is less surf, more sea grass, and more mangroves. The most frustrating aspect for anyone who comes here in a buying quest is that the same lot you see today was probably less than half that amount only a few years ago.
A major consideration to choosing your lot is the position of the beach road and its relation to what is called the Federal Zone. The Federal Zone is 20 meters (66 feet) back from the high tide mark of your property, where you cannot build. The Federal Zone is not owned by you, but may be enjoyed by you. (It can have a “non-permanent structure”...a dock, palapa, etc. Note: to build a dock, you must get a beach concession, which we understand can be easy to do.)
The Costa Maya beach road is a bumpy ride, curving along the coastline and close to the beach in some areas (not desirable). In other places it cuts through the back of the property line (much better).
When you look at lots, be sure to measure the distance from the road to the Federal Zone. This will tell you the allowable distance you have on which to build on the beach side of the road. If the property is deep enough, you may choose, as some people have done, to build on the far side of the road.
More about the beach road: this is not the same 50-mile stretch of road that parallels the coast a bit further inland and that has been paved by the Mexican government. The government has said that paving the beach road is the last item on its list for developing the area. To go up and down the coast, you needn’t take the bumpy, sandy beach road—take the paved road. Every 10 to 20 kilometers or so there are access roads to the beach.
North of Xcalak, an effort is underway to move the beach road. Most landowners are in favor of this, as it will give them more use of property on the beach side. In one case, where the landowners moved the beach road farther back, we understand the lots immediately doubled in value after doing so. (There are no guarantees, however, and this is not something you want to take on by yourself—it’s very political.)
Other restrictions to look out for (when buying a lot):
- An extreme amount of mangroves—you are restricted from removing them
- Elevation—ensure you’re buying solid land, not lowland with areas of standing water...walk the property to find out
- Know what the building restrictions are (up to two or three stories, depending on the area).
Once you’ve identified a lot or simply decided that you want to buy a lot in Costa Maya, you have two distinct options for how to proceed: through a reputable real estate broker or directly from the owner.
Properties and lots for sale on the Costa Maya
At Punta Chahuay, 10.5 miles north of Mahahual, Mexico International Real Estate Company has 10 lots for sale. Each averages 20 to 24 meters (65 to 80 feet) of frontage and is a healthy 100 meters (110 yards) deep. The price is $110,000 per lot. The coastline here is rocky, but the views of the Caribbean are spectacular. And financing is offered on these: 20% down and a five-year note at 10%. For more information, contact Mitch Keenan; e-mail: mitch@mexintl.com .
Mitch is also offering financing on Mahahual highway lots. Mahahual is the heart of the Costa Maya and the area’s only real commerce center. Mitch believes that these lots will quickly escalate in value as Mahahual is being rebuilt and new tourism infrastructure is required. These lots, each 2.5 acres in size, are located on the one and only highway with access to Mahahual. Price: $50,000 each.
In the heart of Mahahual town, across from the 40 Cannons Hotel, a triangular-shaped lot (not beachfront) of about 4,300 square feet is being sold for $140,000. Denis Couture, who has been investing in the Costa Maya for about a decade, believes this is the best value in town right now. “The entire town will grow around this parcel of land,” he says.
While El Placer is the most popular area along the Costa Maya for foreign buyers Denis believes it is overpriced at $10,000 to $15,000 per linear meter. (One linear meter = 1.1 yard.) “My bet is still in and around Mahahual.” Contact Denis by e-mail at: Mexicocaribbean@aol.com; website: www.mexicocaribbean.net. (Denis can help put together opportunities for group investments.)
To give you an idea of what prices are for beachfront lots in Mahahual, Mexico International has two 20-by-35-meter (.18 acre) lots currently listed for $300,000 each. These lots have electricity and are near the entrance to Mahahual between the new artisan market and Tequila Beach Club. This would be an excellent location for a commercial venture.
You can occasionally find homes for sale. One house we saw that seems to be a particularly good deal is near Xcalak, about 40 miles south of Mahahual. Alternative energy sources are required here, as government power poles are nowhere in sight. This home has a complete solar energy package and a freshwater well. It has four bedrooms and two baths, a large detached garage/workshop, and sits on a beautifully groomed and landscaped piece of prime beachfront, measuring 18 meters by 65 meters (about a third of an acre). There is some owner financing on this, and it’s offered at $325,000 with first option on buying the same-sized lot next door for $120,000. For more information, contact: Kim Calkins; e-mail: kim@mexintl.com; website: www.mexintl.com.
Kim also has a lot for sale in the Rancho Tanquila neighborhood, about halfway between Mahahual and Xcalak. The lot has 20 meters (65 feet) of frontage and a nice sandy beach. Price: $99,900. This lot is 60 meters (200 feet) deep.
You can buy a lot and hold it to sell or build on at a later date. Property here has been appreciating rapidly and steadily, and there is no reason for that trend not to continue.
You can build on the lot and/or purchase a lot with a home already on it to use for a vacation getaway or full-time home.
Kim Calkins, who owns Tierra Maya resort near Xcalak and also works as an area real estate associate for Mexico International, knows something about the area tourism business. Her resort and others in the area do a brisk business catering to sport fishermen who come for the plentiful bonefish, tarpon, snook, and permit that inhabit the waters here.
Kim says holiday homes in the area have high occupancy rates, renting for $900 to $1,500 per week, with mid-December to mid-March being high season. Most of these fishermen return year after year, says Kim. And no wonder—during the last season there were four grand slams and five super grand slams. (For you non-fishermen, a grand slam is when you catch a bonefish, permit, and tarpon all in one day. Add a snook and it becomes a super grand slam.)
The area could use a good rental management company, says Kim. Other ideas for businesses that are needed, she says, include a hardware and construction supplies store, ATMs, a nice campground for backpackers or RVers, and smaller businesses like ice cream and donut shops.
Additional information on the Costa Maya from the May issue of Mexico Insider
Fast Facts
Altitude: Sea level
Climate: Humid, sub-tropical climate, cooled by sea breezes
Population: Sparse but growing. Mahahual had about 300 permanent inhabitants in the 2005 census
Location: Southern Caribbean coastline of the state of Quintana Roo, in the Yucatán Peninsula
Pros: Spectacular beaches, with fine white sand and turquoise Caribbean waters. Beachfront property is still affordable, even though prices have climbed dramatically in recent years. It’s also a nature-lover’s paradise, with nearby biosphere Sian Ka’an
Cons: This area is sparse on infrastructure and is vulnerable to hurricanes—parts of the area are still recovering from last year’s Hurricane Dean. Chetumal is the nearest city for health care or anything more than “necessity” shopping.
Mexico Insider's Ratings of the Costa Maya
Note: Our rating system is entirely subjective. We assign points based (from 1–10 with 1 being dismal and 10 being excellent) on our perceptions of what is most important to us. As for housing costs, if we think they are extremely reasonable, we give the location a 10 ranking. This, too, is subjective, as housing costs in resort areas can be extremely expensive yet still reasonable based on the fact that it is a popular destination where prices are likely to continue to appreciate. Total points available for any one destination: 100.
Weather and Climate 8
Health Care 6
Overall Attractiveness 10
Housing Availability 6
Housing Cost 8
Accessibility to an Airport 6
Cultural Activities 6
Other Activities 8
Communication Infrastructure 4
Daily Living Cost 8
TOTAL 70
Ease of Doing Business 6
Note: Ease of doing business may not be important to you but it is quite important to us. What we mean by this is can we find an English-speaking person in the local bank, phone company, real estate office, etc.? We assign extra points(from 1–10) for this category.
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