Two Things You Need For a Profitable Real Estate Opportunity

On my international real estate beat I look for two things: Capital appreciation and strong rental income. Some locations will offer appreciation potential, others the income. Only in a rare place at a unique moment does an opportunity tick both boxes.

When you add income and capital appreciation, your returns start to grow and compound at an exciting rate. When an opportunity like this presents itself you need to put boots on the ground.

Mexico's Riviera Maya is one location that does just that. This 80-mile stretch of Caribbean coast is home to some of the world's finest beaches, top-notch infrastructure and amenities…and big profit potential.

It's a place that’s experiencing strong growth in the real estate market. It's undervalued compared to more-established Caribbean destinations. It's still possible to buy early-in, pre-construction here with a manageable down payment and low monthly payments. If you buy well, on delivery your home could have capital appreciation of as much as 30% on your purchase price. And you can then rent it out to generate an income stream.

This is a spot that I love to spend time in. And I'm just one of the 4.5 million tourists that visit this coast every year. Today's tourists come from North America, Europe, Latin America, and the well-heeled domestic market. The tourist season is getting longer as more nationalities discover the charms of this Caribbean destination.

While most visitors stay in an all-inclusive resort, some will want a rental. They'll rent a private home for their trip. They're looking for space and privacy, a place to relax with family or friends, with amenities on their doorstep. If you're the owner of the type of home they're looking for, you stand to make a nice profit. You are tapping into a major global trend by owning a rental here.

Airbnb, for example, is now a household name. Its site has more than 2 million listings of properties for rent around the globe. In the summer of 2010, 47,000 people stayed with an Airbnb host. By 2015, that number had rocketed to 17 million. The company is valued at $25.5 billion, 25% more than hotel giant, Hilton.

What the Airbnb founders tapped into is a trend for vacation rentals. It's a $100 billion market, and it's growing. Industry analysts predict it could reach $170 billion by 2019.

A home in a resort fits the bill for many Airbnb renters.

In one particular five-star resort you’ll find landscaped grounds, a 27-hole golf course, a white-sand beach, swimming pools, restaurants and bars, and a gym and spa. These are the kinds of things that appeals to vacation renters.

A home here, your home here, will appeal to them too. Take a two-bedroom, two-bathroom condo. It will feature luxury finishes and a modern look, with 1,194 square feet of space. It will come with a spacious terrace and a view to the golf course.

It's got a clever design that allows you to lock off one side of the condo. That gives you great rental flexibility. You can rent it as a full two-bedroom condo. Or keep the one-bedroom suite private and rent out the rest. If you rent it as a two-bedroom condo, you could charge up to $150 per night.

I mentioned that this coast can also deliver strong capital appreciation if you buy the right home at the right price. A condo like this offers just that, and can be bought for $185,900. This was a strong deal in a strong, rising real estate market and the perfect deal if you were looking for a Caribbean getaway with profit potential…exactly the kind of opportunity I’m always keeping an eye out for.

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