IL Postcard

Three Tips for Your Property Buy in a Maturing Market

Date: 08/13/2008

August 14, 2008
Campeche, Mexico

Hola Mexico Insiders,

I recently visited a popular beach resort town where I overheard some developers talking about the state-of-the-art construction and amenities they plan to use in their project. Their knowledge of exactly what U.S. and Canadian buyers want intrigued me, and I discussed it with a realtor friend in the area.

He wasn’t surprised at what I’d heard. “This area is at a different stage of its development than it was when I first came here,” he said.

Six years before, when he’d arrived, the town was still a quaint beach destination where property was a steal. House and condo construction was solid and safe, but it sometimes lacked imagination and amenities. Condo buildings, for instance, whose design didn’t maximize sea views, or houses with shelves but no cabinets or closets…

No more. New properties on the market today have it all. Attractive tile or marble floors. Windows designed to maximize views and sea breezes. Well-designed, solid-wood cabinetry and closets with fine finishes. Dishwashers. And the list goes on and on.

As more investors have been drawn to this area, the market has matured and the demand for sophisticated housing has gone up. Today you easily find properties with amenities that the market just couldn’t provide half-a-dozen years ago.

Make no mistake—those early-in buyers haven’t lost money. Far from it. Their houses or condos may not be as sleek and chic as the current models, but with the property appreciation they’ve seen they likely can afford a complete re-do and still be ahead.

Here, then, are a few tips for buying in an appreciating resort market:

• Early-in buyers may get bargain property prices, but the trade-off may be fewer high-end amenities—these may not be available yet in that market. Overall, though, you’re probably still getting a great deal
• If you buy early-in, check whether the trade-offs are things you can upgrade later. For instance, you can always re-do a kitchen, but knocking out walls to create a view is harder—and you certainly can’t move your property to a better location
• Think carefully about how you plan to use your property, and buy accordingly. That cute condo two miles inland may be great for fulltime living, but good luck renting it to vacationers—they want to be closer to the beach and the action.

And, of course, you can always choose to pay for those brand-new, chic properties with all amenities. In an appreciating market, the top dollar you’ll pay for them today will seem like a bargain two or five years from now.

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Best regards,

Glynna Prentice
Editor, Mexico Insider