As you enjoy a coffee on your rooftop terrace in the early morning, you watch the sun slowly light up the brightly colored homes that blanket the hillside across the valley. Church bells toll.
Heading down for breakfast, you pass through the interior courtyard, past the flowing fountain. As you move through your home, you admire the centuries-old wood beams lining the ceilings overhead, the elaborate tilework under your feet. The windows and archways between rooms are set off by decorative moldings.
You feel surrounded by history, which in fact you are. But you have a comfortable, easy-going existence. You haven’t sacrificed any modern conveniences. In fact, here in Mexico’s colonial highlands, you have everything you need.
Such a life isn’t far out of reach. In fact, in the right place you can find a large Mexican colonial home for much less than you think.
But among the country’s hundreds of historic towns and villages, where should you go…?
If your heart is set on a colonial home in the center of a colonial town, then you should look in the beautiful town of Guanajuato.
Guanajuato (pronounced gwaa·nuh·waa·tow) has a European flavor—no surprise as the architecture and layout was modeled on Spain—with a distinct Latin edge. Taco stands next to church belltowers. Monuments in the plazas surrounded by mariachis ready to sell you a song in the evenings.
You’ll find restaurants of every cuisine, from Thai and Vietnamese to nouveau Mexican to Italian to French…and even American-style sports bar fare.
International visitors are also attracted by the vibrant arts scene. Guanajuato has a symphony, an international film festival, live music of every genre in smaller venues, performing arts, galleries and museums…the centerpiece is the Cervantino (named after the Spanish author of Don Quixote, Cervantes), a month-long festival every October that draws artists and performers—and audiences—from all over the world.
There are immaculately maintained parks and plazas with shade trees and wrought iron benches underneath. You’ll see pensioners chatting. Young couples snuggling. In the evenings, the mariachis will play romantic ballads or other traditional songs for a nominal fee.
Tourists eat it all up. It’s European, it’s Mexican. It’s traditional, yet sophisticated…
Guanajuato was the site of several mines that sent vast amounts of gold and silver back to the mother country, making it one of the wealthiest cities in the New World at one time…and that’s reflected in the impressive structures of its centro.
Alongside the monuments and plazas, there are plenty of private homes in centro, some brought up to 21st-century standards…and others in need of work.
The intrinsic value in colonial properties
Famed investor Jim Rogers said, he invested in beachfront land because “They aren’t making any more of it.” It’s inherently desirable, with a finite supply. Buy right and you will make money…or so the thesis goes.
This applies even more to historic homes. Colonial homes are utterly unique, their one-of-a-kind features inscribed in the historic register. These are pieces of art that cannot be reproduced. They have a special place in many peoples’ hearts. They are collectibles you can live in. There are a limited number of Spanish colonial cities in the world. And within them there are a limited number of colonial homes.
In a sense, there is an “economic moat” around a colonial district. The amount of homes is set and cannot be changed. And that matters when demand comes chasing properties like these. When you have a lot of demand chasing limited supply, you have something inherently valuable.
I’m not saying a colonial home is a RETA-grade investment. Think of it more like the collectibles or art market, perhaps even those non-fungible tokens (NTFs) that have been in the news recently.
These are items that you can enjoy from a lifestyle perspective, but they are also a store of value with potential rental appeal.
Profit Potential with a Colonial Home
Already-updated colonial homes in Mexico can cost a pretty penny. Even those in disrepair can be surprisingly expensive if they’re in a good location. But there are still plenty of bargains to be had, especially in places like Guanajuato that are considered “secondary” destinations.
And there is opportunity here…
Mexicans from the country’s biggest cities (especially Mexico City and Guadalajara, which are within a four hour drive), come to this colonial heartland in droves to enjoy the picturesque architecture, laidback vibe, dining and entertainment, and always warm but not hot weather.
Many Mexicans take trips to places like Guanajuato with the extended family—the grandmother, cousins, and the like—and they all want to stay together. And foreign travelers often with groups of friends; again, it would be very convenient for them to all be together.
Find a large colonial property with several rooms—or even separate apartments—in the historic centro. These would appeal to individual travelers, couples, families, and especially large groups.
I love this niche for renting because you can charge top dollar.
You could live in part of the property and rent out the rest. Or just open the whole place up to guests. In either case, you could bring in a nice, consistent income from a diverse market base.
When my team member Jason put boots on the ground in Guanajuato over the summer, he found ideally located colonial homes in the heart of the action that could work perfectly for this opportunity—all walking distance to all the sights, the best places to eat in town, and everything else.
Bargain Colonial Homes in Guanajuato
The first is a seven-bedroom home across the street from Jardin Reforma (a shopping area) and a block from the central market. It’s on the second and third floors of the building; an ice cream shop is on the first level.
There is an interior courtyard, as well as rooftop terrace with views. There are seven total bedrooms, each with a bathroom, sharing a kitchen and living area. Three have a balcony. And there is also a separate two-bedroom apartment with its own kitchen and bathroom—the perfect owner’s suite. No renovation needed; it’s well-decorated too—although perhaps not to everyone’s taste. The list price is $364,000.
For project houses, check out this seven-bedroom home on three levels. There are balconies, an interior terrace courtyard, a rooftop with views, and three bathrooms. It’s close to the Callejon del Beso (The Alley of the Kiss), a pair of balconies set over a very narrow street over which two forbidden young lovers stole a kiss…and then tragedy struck.
The list price is $169,000. This one needs work, which means the potential to add a lot of value without a huge investment. The outdoor spaces are in shambles. The rooms need new tile. The bathrooms need updating. The exterior facing the street needs to be redone. But the bones are good. So with that low price, you should have some cash for remodeling work.
This last home is a recently renovated property about a 20-minute walk from the main part of centro. It’s up a bit of a hill and accessed through a Callejon, or narrow alleyway. Yet, it has a panoramic view of the city and a terrace upon which to enjoy it.
The list price is $148,500, so you get a discount for the out of the way location. But it’s perfectly set up, with three separate apartments, each with a kitchen, bathroom, bedroom, and sitting area. You could stay in one, rent out the others to vacationers from Mexico or abroad, work-from-home folks, and even snowbirds and part-time or full-time expats. Remember, it’s already fixed up. So if the idea of setting up an Airbnb in Guanajuato appeals to you, but renovation doesn’t, it’s ideal.
The Guanajuato Rental Market
Based on current hotel rates in centro (nice hotels near the properties above go for $60 to more than $100 per night) and what they’re charging on Airbnb, I figure you could rent out rooms with private bathrooms for $50 per night. One-bedroom apartments with separate kitchens and sitting areas could go for $100 and up. With just 100 nights of occupancy, that comes to a tidy sum.
Of course, you could always find long-term tenants as well, especially for the apartments. Figure on charging about $500 a month or more for a one-bedroom apartment, renting to snowbirds, expats, or digital nomads.