5 Ways To Finance A Real Estate Investment In The Riviera Maya

18 March, 2023

1. Finance your property with cash.

You could pay the property’s full price upfront with cash.It is the easiest solution.  But it is not the better one, financially speaking. Of course, first of all this strategy requires adequate financial resources.


– It removes any doubt in the seller’s mind related to a financial risk.

– Paying cash enables you to acquire properties at significant discounts, only because you are using liquidity on hand.

– Paying cash saves buyers a lot of money in interest expenses that come with conventional loans.


Risk versus return.

Paying in cash is a safer, more conservative approach, because you don’t take financial risks; but it caps your potential gains.

An example could explain this concept in a better way.

Assuming you decide to invest $250,000 USD in cash to buy a modern and central real estate property in Playa del Carmen, and then rent the property for $4,000 USD per month (the actual vacation rentals in that area).

You’ll see $48,000 USD in gross revenue per year. By using the more basic financial metric to calculate your return, the Gross Rental Yield (annual gross rental revenue/cash invested), you would gain 19.20% gross return on your investment.

Alternatively, if you make a $50,000 USD down payment, then take out a 20-year mortgage at 10% interest rate, you’ll pay $1,957 USD per month in principal and interest.

By renting that property at $4,000 USD and subtracting the mortgage payment, you’ll get an annual gross revenue of $24,516 USD, with a Gross Yield at 49% of the initial $50,000 USD investment in just the first year.

Although this explanation is oversimplified (there are more sophisticated financial gauges which take into account vacancy rate, operating expenses, maintenance, repairs and extraordinary renovations expenditures), it clearly  illustrates the impact of leverage on your money if you choose other financing options.

Your potential investment’s return may increase if you use the leverage, and if you find a good balance between down payment and the funded amount.

Paying with cash your real investment provides security and stability, but reduces your potential yield.

  1. 2. Finance your property with conventional bank financing

This is the most common form of bank financing.

In Mexico, 35% of the global mortgage market comes from private financial intermediaries, while 54% is provided by the public institution Infonavit.

With a mortgage loan, a financial institution lends money to the future owner based on credit history and ability to pay off the loan over time, usually requiring the house as collateral.

When choosing a bank’s mortgage loan, you have to take into account different funding elements. For instance: the bank institution, the maximum amount to be financed, the property’s value, the percentage of funding, the interest rate, the mandatory down payment, and the loan’s duration.

According to a research by CONDUSEF (Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros), the most common features of the mortgage loans offered by the Mexican banks are:

  • Value of the property: lowest value: $300,000 MXN; highest value: $50,000,000 MXN
  • Amount to be financed: from 69.9% to 95% of the home’s value
  • Down payment: from 10 to 50%
  • Terms: 10 to 30 years
  • Annual fixed interest rate: depends on the financial institution, but many banks establish an interest rate between 9 and 13.64%.


As an investor, you can use the property loans as a tool  to maximize your returns by leveraging the down payment, the length of the payback terms, and the interest rate.

As above mentioned, an appropriate use of leverage may generate a higher return on your real estate investment.


In the case of a high vacancy percentage on your rental property, having a mortgage payment can quickly reduce your profits.

However, in a location like the Riviera Maya, where the annual average occupancy rate is at 82%, this risk is really low.

Mortgage financing availability for Non-Nationals who purchase a property in Mexico is not quite as accessible as it is for Mexican Nationals.

But today, there are still a few mortgage lending options for Non-Nationals, including Americans, Canadians, and Europeans.

Ask your real estate advisor.

  1. 3. Crowdfunding

Real estate crowdfunding means pooling money together from a group of investors to make an investment in a real estate project, whether it is the construction or even the purchase of a building.

The major difference between collective real estate investing (collecting liquidity to buy a property among friends, neighbors, families) and crowdfunding for real estate today is that investors can put money into a project through a direct online process, by using proper platforms.

In general, there are four different types of crowdfunding:

  1. Donation-based: it is the one type of crowdfunding where the investors do not receive anything in return.
  2. Reward-based: What the investors receive is only a simple reward, for example a product from the company financed.

Donation-based and reward-based crowdfunding are rarely used in real estate crowdfunding.

  1. Equity-based: the fundraising participants get a shareholding in the company financed. Therefore, the investor becomes a shareholder.
  2. Lending-based: it is the common way in which a real estate investment can be financed through a crowdfunding structure.

Practically, it is a type of loan. This kind of crowdfunding, known as social lending as well, provides an interest rate, which is the profit for those who put financial resources on the real estate project.

All this occurs through online platforms, where money demand and supply meet.

Crowdfunding is a good option to become homeowners without having the resources to buy a property (or an easy access to the debt market); and a good chance to invest in the real estate market with smaller amounts of money.

Real estate crowdfunding is a market which globally has a value of over $12 billion USD. In Mexico, the crowdfunding sector is regulated by the 2018 Fintech Law.

Some of the largest real estate crowdfunding platforms are: Sharestates (USA), with $1.8 billion USD collected; Exporo (Germany); Crowdstreet (USA); Fundrise (USA); Crowdcube (UK); RealtyMogul (USA).

The top crowdfunding companies in Mexico are: M2Crowd; Play Business; Brick.mx; Monific.


It is a Mexican co-financing program between INFONAVIT and a banking institution.

INFONAVIT is the Instituto de la Fundación Nacional de Vivienda para los Trabajadores, a public sector institutions (alternative to private financial intermediaries), which nowadays play an important role in housing finance:  seven out of  10 home loans in the country are granted by INFONAVIT. It provides credit to households who belong to the formal private sector of the economy.

Currently, there are several housing financing schemes offered by Infonavit.

Among them there is COFINAVIT, which is granted to workers with certain personal and financial characteristics.

COFINAVIT is a shared mortgage financing: part of the funds are provided by Infonavit, and the remaining portion by a commercial bank. In addition, the amount you have saved in your Housing Sub-account (Subcuenta de vivienda), that is where the contributions paid by the employers for the workers’ house purchase purpose are destined, is added to the credit.

This type of financing allows you to increase the money available to pay closing costs, down payment, or purchase a higher price property.

This co-financing is a good way to buy a home because you have two credits actually: the one by Infonavit through Cofinavit, where your employer will charge the monthly installments on your paycheck; and the one by the bank, with the payment conditions established by the financial institution.

  1. 5. Financing through vacation rentals management

There is another way to finance a real estate investment. It is a particular type of purchase contract that includes a specific payment plan.

You can pay only a down payment (quite substantial), and the remaining part of the purchase price will be financed by your same property through the vacation rentals managed, and guaranteed, by the developer or by the real estate agency.

This kind of payment plan allows you to invest only a portion of the house’s value, generally  50% or 60%; and you don’t have to go to a bank to ask for a mortgage loan, or at least borrow a smaller amount.

It is a long-term investment, because you can’t sell the property for a certain number of years, according to the payment plan; during this period, you can use your house for vacation just for a few weeks a year.

But it could be a profitable investment, because you have two types of appreciation: the difference between what you actually paid as cash and the market price upon signing the contract; and, in addition, the potential property’s appreciation during the scheduled payment plan, especially if you buy in a high-growth location like the Riviera Maya.

Ask your real estate advisor what is the best option to finance your investment, according to your needs.


Maya Ocean

Maya Ocean Real Estate

We are a company dedicated to the Sale of Real Estate and we also offer the option to Manage, Promote and Rent. Our real estate inventory and area of operations extends to the Riviera Maya mainly in the cities of Playa del Carmen and Tulum...

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