Discover a Simple and Practical Process to Evaluate the Next Purchase of a Pre-Sale Real Estate Property.
You are a Hard worker and Have Finally Accumulated Enough Capital Or Things Are Just Going Well And Now You Have Access To a Financing That Allows You To Get A New Property. And Without fully intending, your antennas have been put into search mode. That Dance of Possibilities begins, whether they are Lands, Houses or Apartments.
You may have heard it in some Commercial, Promotion, seen on Facebook or Instagram, but since you saw it, you haven't managed to remove the thorn of curiosity. And they are all that Range of Real Estate Properties Offer for Pre-Sale in Quintana Roo.
That Emblematic dreaming Land that makes us Remember the Crystal Clear Waters of the Caribbean. If you have had the opportunity to travel to it, you will remember those unforgettable vacations and all the adventure.
You Do A Property Search On Some Portals or Just Google it and Immediately There Is An Infinite Flow Of Properties Ads Promising Immediate Profits And Make Your Money Grow Almost Magically.
Madness in Real Estate Developments in Quintana Roo
The Quintana Roo State is not announced as the safest in the world, and despite this, today it continues to be one of the Mexico's highest investment and real estate growth. The Largest Developers in the Country are Here, Adding to the Momentum that Has Characterized the Area.
And Every Day More Keep Coming!
Unofficially There is an estimate of more than 400 Presales at this moment
There are of all the Flavors, Colors, Sizes, for those Demanding, for the Risky ones, the Adventurers, the Nature lovers, the Eccentric or the Refined ones. It does not matter your Nationality, Religion, Sexual Preference, if you love Golf, Fishing, Equestrian or Water Sports. Here you can find what fits your lifestyle.
Whether you are looking for a Land, Condo, House or Apartment, you can also find Everything and in Almost Unexpected Places, from the Main Cities such as Cancun, Puerto Morelos, Cozumel, Playa del Carmen, Tulum, Bacalar, as well as in smaller communities throughout the State.
The Big question here is How to be able to choose the most Suitable one? How to Filter Those Mediocre Developments from the Really Valuable? And Above all, how to Separate the Real from the Frauds?
Defining the Objective of Our Real Estate Investment
Before You Can Even Think Between Beach or Jungle, or Between Cancun or Tulum. What will really give you the guideline to navigate the process with a cold mind and an enthusiastic heart (because both will have the same weight to decide) and that is defining your investment goals.
I'm taking for granted that you're clear that any Real Estate Purchase or Acquisition is an Investment, it may be the best one that you do throughout your life and above all. One that will strengthen your heritage.
Despite the fact that many people want to increase their money's value by investing in a property. It seems like they are choosing their First House or Apartment. Suddenly, they are in the Middle of an Emotional Whirlwind that doesn't allow them to Advance or Feel that they are Choosing Correctly.
You wake up every Morning listening to those Internal Voices that Scream for your Attention, in Addition to your Partner or Family Members, giving their Opinions and Passing Judgments.
So what would be a good process to get started?
This is in my humble opinion a Simplified Outline to Help You Clear Your Mind in your Decision Making. I am not inventing anything new or miraculous, it is simply a guide that I hope to be useful if you are looking to acquire a real estate property in Presale.
Both Sides of the Coin are Basically the Financial and Legal Aspects and the Other the Emotional Aspects. And because of how complicated can become, the emotional aspect. I will start with the simplest, which is the cold and analytical one.
Note: Buy in Presale as a Foreigner
Three Basics if you are a Foreigner and wish to buy are:
- The Mexican Laws contemplate a Restricted Zone of 50 Km from the Coast and 100 Km in Borders. In this Zone you can Buy a Property in two ways: Through a Company Incorporated in Mexico (Any Foreigner can Create One Meeting the Requirements) or as an Individual through a Restricted Zone Trust.
- Restricted Zone Trusts will allow you to Personally Enjoy your Land, House or Apartment with an Annual Payment to the Banking Institution with which you have chosen to Incorporate the Trust. You are free to sell your property at any time during the Trust's life.
- The Trusts have a duration of 50 years and can be renewed for a similar period.
The Process for Assisting a Foreigner to Buy in a Presale is Familiar and Customary, so having the Proper Assistance is Smooth and Hassle-free..
So... What is a Presale, At least in México?
First, we should think about what a Presale consists of in Order to Judge whether it is what Suits us or not. The Presale is a Marketing Model with Qualities that makes it Ideal for Product Development of various kinds, in the specific case of real estate, whether land, houses or apartments, its main quality is that the developer can capitalize to build what he is selling to you.
That's why you Pay for something that doesn't Exist yet.
What Advantages Do You Get?
Have access to a Reduced price Compared to what you would pay if the house or apartment were ready to be delivered. So let's say you are ensuring a capital gain that depending on the product can go from a 15% Up to 30% According to AMPI Data.
Capital Gain is that which is generated at the end of the work, over the initial price, generally ranging from 10 to 20%, which combined with the discounts you can get, add up to a higher than average return.
Another possible advantage, which will be subject to the developer's policies, is that you can adapt the product, whether you change some finishes, the faucet's brand, or some of the furniture or equipment's elements. As I mentioned above, it is up to the Developer and must be agreed upon beforehand.
For most of the Developments Normally a Presale takes an average of 2 years, some more, some less. Which also gives you the convenience of paying in the same period of time the product's price, so you will not have to decapitalize as in the case of an Immediate Delivery Purchase.
Also, Some Few Developers (The Largest and Specialized in Development of Lots or Land in Condominiums) Offering Win-Win Schemes Where Highly Attractive Direct Financing is Extended. Depending on Your Conditions, these Schemes are Usually Way More Convenient than Local Bank Credit. These Financing Schemes terminate at the end of the PreSale Period.
Note
In the case of a PreSale that is just starting, you have the most upside and time range, but on the other hand you have no idea what you will receive, or you may have the feeling that you may end up empty-handed.
On the other hand, when you are at the end of the pre-sale, the work is very advanced, generally the price has already been adjusted, and the capital gain is much lower, you will have to disburse higher payments in a short time, but the counterpart is that you can get a clear idea of what you are about to receive, it is possible that they already have an exhibit model in which you can fully appreciate the product, but above all, you will have the certainty of seeing something concrete in exchange for your money.
Before Evaluating Any PreSale Real Estate Property
We already have a Pre-Sale Overview, but you should first define what goals you want to achieve.
I want to go ahead and review some thoughts that may be going through your head. Because when it comes to talking about goals, these Ideas become Noisy and I want to share them as Reflections, since I have heard them enough to know that they exist.
Curious Ideas That May Go Through Your Head
"A Real Estate Investment are Inheritance Assets"
My Personal Opinion is that one should be much more Flexible with this. Investment Properties not only Generate Profits in the Purchase, or During the Time you own it, It also Generates Profits at the Time you Sell. And being a good investor sometimes involves being able to have the ability to get rid of two properties to get a better or bigger one. Additionally, there are considerations for foreigners wishing to purchase property in Mexico that limit ownership to defined time frames on Defined Locations, Such as Coast Cities.
That is why it is good to have a less attached attitude, and instead to see it all the time as an opportunity.
"I don't want to buy in front of or near the beach because of the Tsunamis."
This is the one I hear most often and the one that surprises me the most, and I say this because it seems to me infinitely remote that there will be a Tsunami in Quintana Roo like the one in Asia in 2004.
We need to remember that the Quintana Roo Plate protrudes from the Sea only about 30 meters on average, being in the Coastal Edges up to an average of 5 meters. A Tsunami would affect not only the Beach Front Properties but practically any point of the Coastal Cities. Having a property 100 meters from the beach will not be any safer in an event of that magnitude.
As I said, it's keeping your eye on the wrong spot, there are equally destructive and far more frequent hazards such as hurricanes. They happen quite frequently in the area. And that's where our focus needs to be. Fortunately, today we have the knowledge and experience to overcome these phenomena with the least possible impact.
Knowing what Considerations the PreSale Home or Apartment has in terms of Hurricane Protection is an Important Point, and again, You don't need to be just a Beachfront to be Affected, Hurricanes are Destructive anywhere in an Urban or Semi Urban Settlement, Coastal or not.
"My Brother-in-law told me "X" City is already Dead and it's not worth investing ”
It seems to me a good indicator what foreigners think of our tourist areas, it is a good thermometer. But he's not the only one. And of course depending on the person it is limited and merely subjective. Cities like Cancun continues to grow and exceed all investment expectations. In fact, it is one of the cities with the most stable growth forecast..
Factors specific to the Pre-Sale House or Apartment such as its Location, Conformity within the City can make a Property more Versatile in one City than in another that may be fashionable among Foreigners.
Now, let's define Goals
Why are you going to buy that Land, Apartment or House in Presale?
Again, I am considering that you want it as an investment, that is, it is not for you to live it, or raise your children and spend your old age in it. On the contrary, it is with a view to renting it or it may be up to a piece of land that you want to let rest and that over time increases its capital gain.
Knowing the Nature of PreSale Properties will also help you to Align and Clarify your Goals. Therefore, I will list some aspects for each of them, without pretending that they are the only investment schemes, I will only mention the most common ones. Under the Presale Scheme
Land in Presale
They may or may not be grouped in a controlled access location, have or not "shared areas" but their main characteristic is that they are profitable as an investment in the medium or long term, in very rare cases even in the short term, i.e. you can buy in presale and sell it as soon as it is delivered to you and get a significant profit.
There Are Cases Where They do not have Basic Services(Electricity, Water, Drainage and now even Internet). If this is the case, then you should consider that at least there is a Certificate by the Local Service Providers (CFE, Aguakan, Telmex) of Feasibility or Capacity to be able to provide service in a determined future. Since these are the elements that increase the value of the land.
And needless to say, a Feasibility Letter is still a document that says they can provide service in the future, but it is not a document that obligates them to do so. Yet in most cases, You will still need to reach an agreement with your neighbors or make the initial investment by yourself, if you manage to do so at all.
It is also good to know the development feasibility. And for this it is necessary to have clear what classification they have under an Urban Development Plan (PDU).
Quintana Roo is a Pioneer State in the Development of its Urban Development Plans.
The most certain thing is that there is one for the area where you want to buy, and you can make sure to obtain the Certificate of Land Use with the characteristics you want, whether it is to do a business, develop for sale, etc. The riskiest thing to do is to have a Mixed Use, as you may end up with a Workshop or Junkyard next door.
The downside for many of the land that is left alone is an issue of vigilance, because if you don't take care of it, it can become a dumping ground for your own neighbors or worse.
In the case of the Land in Closed Locations (But not in Condominium) It is a matter of Practicality. If there are common areas such as access gates, barbecues, green areas, etc., these are not owned by anyone. So their Maintenance, Regulation and Surveillance are left in the Air, or to God's Will that you reach an Agreement with your Neighbors who, like you, do not have the Intention of Living in them, or simply like you, live in another City and are busy with more Immediate Problems. Agreeing to hire a Gatekeeper will be a challenge.
Those who make the best from these presales, are those who are willing to live in a more or less rustic way, making use of alternative energies, and assuming the work involved in its maintenance and surveillance personally. Quite more advisable for those who plan to invest or build in the short term.
Land in Condominal Regime in Presale
The Condominium Regime in México has the advantage that you are not only the owner of your property, but you also participate in the ownership together with the rest of the neighbors of the common areas. Therefore, everyone is obligated to its maintenance, care and surveillance. An Administrative Board is constituted and let's say it is easier to reach agreements and get organized with the pressing issues.
In this case there is less pressure, and you only have to consider a mandatory monthly maintenance fee for the rest of the life of your property.
Ideal for those who wish to completely disengage from the land and can wait several years until it is a suitable time to sell. In general, the more time that passes, the profit is reduced with the maintenance fee contributions. But if you took advantage and knew how to buy and when at a presale, you will definitely make a significant profit.
It is also ideal for those who wish to build in a short term with the intention of selling or renting.
Houses in Presale
Here I want to emphasize that I am referring to not Condo Houses. They have the same condition of being grouped in a closed location or not, but still the agreements with the rest of the neighbors are based on good will. If you lack empathy or are not very sociable or collaborative, it will not be the most convenient.
Ideal for Long-Term Rentals of Minimum one-year Periods. In the case of Vacation Rentals today there is much more openness in most cities and a simple research of the ABnB calculations will give you an idea of what you can get. There are also many property managers or short term rental agents, and the more professional ones can even point you to numbers based on their own statistics. They will take care of everything for a fee.
Condo Houses or Apartments in Presale
These have become a favorite, since the current regulations and technological expansion they have become very profitable investments.
As I mentioned, both are governed by Condominium Regime and therefore there is an Administrative Organization and a Maintenance Fee for Common Areas.
Depending on the location within the cities, some will have a profile easier to rent. Its proximity to areas of interest, access to important and fast highways, etc.
From the moment you are thinking about buying to rent, you have to take care of certain aspects, such as being able to distinguish those developments designed to maximize their profitability.
Note: If there are apartments without Condominium Regime, but understanding the advantages of living in apartments is the least recommended. So I have discarded them.
I want to make a parenthesis now. I will talk to you about something that I had not initially contemplated to include, but it can also serve you, since there is a possibility that you will meet them.
Ejidal Land or Social Property in "Presale"
When someone wants to obtain the highest profit, they will have to consider that today in Mexico in general and especially in Quintana Roo, the highest profit margin is provided by the purchase of Ejido land. (Not Private property)
Of course, if you have no idea what it means to buy, maintain and secure ownership of Ejido land, you run the greatest risk of losing your money.
Note that all Ejido Lands are regulated by the National Agrarian Registry and in turn by the Local Ejido Authorities.
Here the National Agrarian Registry webpage https://www.gob.mx/ran
Why do I mention it?
Crazy as it may seem, there are a good number of Ejido Land "Presales" ads. They disguise themselves with certain terms such as "Ecological Land" and give you a list of "Amenities" that tell you about "Spas" "Club Houses". Normally they consist of a Notarized Contract where they will give you an Assignment of Rights (Not a Property Title) for a Land in the middle of Nowhere, and for which You Commit to a Monthly Payment for a Determined Time.
The Reality is that All that is Promised as Amenities Will Never Come True. The Contracts do not contemplate converting it into Private Property. And if you do not exercise any action with your land, such as building, planting trees or “working” it, several commons have rules where they can reclaim those land for being idle. So it makes it quite delicate and risky.
In terms of capital gain you get very little, since the real gain is given until the moment that the land becomes private property and for which you have to follow a generally lengthy process that requires assistance from agrarian law specialized lawyers.
The nature of Social Property is very different from Private Property, so Presale Schemes as mentioned above have no use or reason.
My personal suggestion is to immediately discard the Ejido property "presales". Unless of course you have full knowledge of what you do.
Closing the Parenthesis of the Ejido Lands, We Left to Focus on the ...
Aspects to Consider when Evaluating a PreSale Property in the Caribbean
Attractive Amenities
Enough outdoor and enclosed activity spaces for the different seasons.
Lock off
This Variant is applied to Apartments with several Rooms that its design allows a Room to work completely independent of the others, making it quite versatile.
Reception-Concierge
There are developments that are quite oriented to vacation rentals, and have been designed to provide the best possible service to prospective guests and can operate as a mini-hotel, so they are often called Condo-Hotel.
Free or Mandatory Administration.
Here there is an aspect that generates a lot of controversy. In some developments it is stipulated that at the time of purchase you sign an agreement with a management agency to operate the rentals. And it doesn't matter what they say and promise about investment returns. Once You Have Signed, You Will Have To Be Conformed With The Results.
On the other hand, there are other condominiums that allow you to contract directly with a management company from which you can demand results and, if necessary, you can change them.
Both options can bring varied outcomes. At least in the last one you have a greater margin of action, it will depend on how you like to manage and get involved with the operation.
Regardless of the case, it is always good to have a clear understanding of the Presale Development conditions, that will allow you to find out how the Management Company is performing. Obtain references from Owners in other Developments and in General how satisfied they are with their Operation.
Ease of Maintenance
Lately I see a lot of developments showing you images with Azulik's wood structures style everywhere, and without wanting to make an aesthetic judgment about it, there is zero consideration for maintenance issues. And that will have a direct impact on the performance of the yields, so it doesn't hurt to pay attention to what they show you.
Surely I will be missing many other aspects at this time, but in order to keep it clear and simple, I hope you have a clearer picture that can help you defining your goals with this information.
Considerations When Obtaining PreSale Real Estate Information
Bank Financing
If your purchase method is through a bank credit, you must be clear with the conditions your bank imposes in order to select a property subject to credit. This is assuming that you already have a pre-approved loan. In general, the construction will have to be well advanced, and the best presale conditions will have already been concluded. Also, not all developers accept bank loans. It is always good to ask.
Construction Licenses
It is the Best Indicative of the Health of the Development, It Means that the Developer has Covered all the Legal Requirements and has carried out the Procedures and Procedures so that the Project can be completed. A License Folio Number in Process does not mean much, so in terms of certainty this document makes a difference.
Condominium Regime
The Quintana Roo State Condominium Law has its peculiarities. Having the Condominium Regime constituted will allow a Condominium Developer to be able to deed the property. The twist is that in order to do so, he must have his Construction Completion License, that is to say, he must have finished the work in its entirety. So they may even deliver your apartment or house that you bought in presale, and they cannot give you the deeds. The most Experienced Developers have a Perfect Synchronized Coordination to Expedite the Process and Deed at the Time of Delivery of the Properties.
Real Estate Trust
The Best Prepared and Experienced Developers Know the Infinity array of Risks that Developments and Presales imply, and to Insure themselves against Eventualities they turn to the Trust Figure where in Practical Terms the Development and the Fulfillment of the Acquired Commitments are Protected. The fact that a Developer makes use of the Trust Figure is a Positive Indicator. (Not to be confused with the Foreign Restricted Zone Trust).
Developer Curriculum
It is becoming more and more common to extend this information, with it you can research previous developments and get an idea of the expertise of who will carry out the work. Many of them are companies with long trajectories, and it does not mean that the ones that are starting are necessarily going to fail, but it is always good to have a clear picture as possible. For this you can help yourself with Google or you can verify in Profeco's website. https://burocomercial.profeco.gob.mx/
Clear Information and Finishes Specifications
The more detailed this information is, the better your chances of getting what they are selling you. If you have doubts about any Material, you can Investigate and Assess it.
Local Legal Assistance
Always have a lawyer assistance and not simply trust that the Public Notary will take care of your interests (Which is not Real). And it is always better to have a Local Lawyer who knows the Civil Code of Quintana Roo and all the Local Legislation.
Identify the Attorney in Fact for Contract Signing
Request the IDs and a copy of the Development Company Articles of Incorporation, with this information you can verify the legal status and the Attorney-In-Fact for Signatures of those who are presumed to be. To verify this you can use the Commerce Public Registry. https://rpc.economia.gob.mx/
You will have to register and Create a User, but you will be able to access Valuable Information of the Company you Investigate.
All of the above are the General Aspects and would become the Cold and Rational Part. The Emotional Part, which is equally powerful and important.
Emotional and Subjective Aspects
Now, in the Emotional Factor at the Time of Buying a Land, House or Apartment in Presale in the Caribbean, your personal Situation influences. You are probably at the point of foreseeing a drastic change in your life and moving is something very feasible, or desirable. Whatever the Reason. It is simply to put the following on the table:
Personal Use and Enjoyment
If you intend to occupy the property 6 months of the year and the rest put it as a vacation rental, then the house or apartment will have a personal aspect, it will have to please you first. If, on the other hand, you intend to occupy the property for no more than a couple of weeks of the year and the rest is for rent, well, then theoretically the focus should be on the potential client.
There are People who are not Conflicted and Prefer to Focus on their Tastes and Whims, and if the World Aligns with Them Fine, in a "Take it or leave it" Fashion. In that Case there are no Worries or Economic Pressures and Capitalization for Income or Marketing is Completely Secondary.
If the Specific Case is that You will Occupy the Property Personally and You have no Intention to Rent or Market it. Then all the Personal Factors of Taste, Style and Personal Needs come into play. Just keep in mind that All presale properties have a margin of months or years before you can occupy them.
Time Factor
Hand in hand with the above is to have a Time Measurement regarding the Property.
There are people who have the idea of buying to rent immediately, but in their minds is the thought that when they retire in 30 years, they will go to live in their land, house or apartment. And by visualizing their Old Age, again all the Personal Aspects are involved, wanting to anticipate 30 years in advance their Needs and Preferences in the Future.
Of course, it is very valid, and I would not pretend to disqualify it, I would just like to share a reflection on this. In such a long period of time, it is difficult to remain the same. It is very sure that the property conditions will change, not necessarily for better or worse, they will simply be different, and the same happens to us, what we liked before will change, our wishes, preferences and tastes will be different.
Salesperson Assistance
I'm referring to the treatment you receive from the real estate agent or agency. The fact that they extend information to you, are on time for appointments, their answers are consistent. And in general, how they behave with you is the best indicator of the professionalism and reliability behind a development. And that can only be measured personally and instantly. If at some point you feel you have to beg or plead for information, or they commit to something and then don't even bother to get back to you. Or you may encounter the desperate ones who won't let you catch a break.
Letting You Feel Comfortable and Confident is something Only You Can Measure.
Conclusion
The Balance
Finding the Healthy Balance Between All These elements, You Should Always Get the Best Possible Result. And that is one that only you can judge, as long as you have the Clarity of the Motive that drives your Decision-Making.
If you Define your Goals with Sufficient Clarity you will be able to Navigate the Sea of Offers with more Certainty, and in the process you will Identify by Dealing with Those You Can Support to Achieve them.
"Presales are Ideal Schemes for Those Who Want to Maximize the Return on Their Money"
A Careful Selection, Supported by a Professional Can Guide you to Do It in the Best Terms, Considering your Goals, Conditions and Needs.
Few Investment Schemes Manage to Generate the Results You Can Obtain By Buying a Real Estate such as a PreSale Land, House or Condo in the Caribbean.
With this I am done, and I only hope I have provided you with valuable information that will be of help. If You Have Any Comments, Doubts or Suggestions, I would be Glad to Hear from You. Likewise, if You Know Someone Who Can Benefit, Please Share.
I also invite you to visit my social media sites and give me a Like.
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