18 March, 2023
The reality is that there is no correct answer between whether you should rent or buy a property.
There are advantages and disadvantages to both options and lately, the decision is largely financial.
Let’s put it this way, if you had enough money in your bank account (that is, you would not require a mortgage loan), would you rent or buy a property?
When you are deciding between one or the other, ask yourself this:
More than anything, renting offers you flexibility and some freedom of commitment as long as you comply with the contract.
A purchase will offer you benefits such as capital and tax deductions, and other intangibles such as belonging to a community, feeling stability and the pride of being an owner.
It’s scary to hear it like this, and the thought of long-term commitment may overwhelm you, but it’s the reality.
In a purchase you cannot let a contract end and move to another cheaper, easier place or return to your parents’ house.
Buying a house with a mortgage loan is a 15 or 20 year contract.
But that means knowing how much you are going to pay monthly during that period.
There will be no surprises, no one to raise your rent, no one to take you out of your home because they decided to sell it or no longer rent it.
In addition, you have the advantage of being able to make capital payments that reduce either the amount you pay monthly or the term of your payments.
The destination, more than one that was open to tourists, has much to offer national and foreign visitors, making it a unique and interesting place for investors seeking to generate income from a vacation rental property.
You will hear many people tell you that real estate does not necessarily mean that you will be able to capitalize on your investment.
And although it is correct, it all depends on where you buy.
This is why it is important to do your due diligence and research everything prior to making such a big commitment.
But the reality is that if you do your research and make a correct purchase, you will see that the value of your home increases over time.
And if one day you are ready to sell your home, then you can benefit from the capital you generated.
Many times the great disadvantage of buying a house, compared to continuing to rent, is the associated costs that it has.
That is, the payment of deed, property transfer taxes, Notary Public, among others.
When you buy a house, you have to consider having the funds for a down payment of between 3 and 20% of the value of the property.
You also have to consider the commission payment if you buy with a real estate agent, pay all the startup expenses, and think about the expenses that are associated in the long term.
This is not only the mortgage loan, but maintenance, furnishing, annual taxes (such as property), among other things.
With the possibility of working from home and access to remote work, many people decided to move to the coastal city for several months, while things improved in their country.
With this, the demand for vacation rental accommodation changed a little, with a focus on not so short-term stays, to periods of 3 to months.
This gave investors a fixed income for a few months renting their homes on platforms, which was very well received during times where travel was still restricted.
In Playa del Carmen it also helped many people to rent their houses, as they have good Internet access, easy transportation and mobility, good hospitals and supermarkets, and a lot of entertainment.
Investors who buy in more demanded areas such as downtown, are generating a large passive income.
Don’t marry the idea that if your mortgage is less than a monthly rent, then you should buy.
But don’t freak out at the cost of buying a home either.
As we said at the beginning, this decision is totally personal and depends on your possibilities and your wishes.
If you are not totally married to where you live, do not rush to buy.
But if you are ready, do not delay in doing it.
Markets are constantly changing, and it’s good to take advantage of times of demand.
In addition, it is always good to rent before buying.
Especially when you are in an unfamiliar city or you don’t have a stable job.
During this period, you will be able to discover what you like and what not about that city, if your work, your points of interest are near or far.
If the area has the services you need to live comfortably.
Renting in an area that catches your eye is the perfect step to prepare for the long-term commitment of buying a home.
This led to an average hotel occupancy of 91.4 percent.
Occupancy, of course, varies by season, but the demand for vacation rentals rose, as did the nightly rate, and occupancy held steady throughout the year.
The majority of vacation rentals were rented through AirBnB (77 percent), while VRBO contributed just 12 percent of rentals.
This shows the importance of having a correct marketing strategy for renting the property and of working with a property manager who can support you in listing and advertising your property, while you just enjoy your income.
The most important thing is that you assess your current situation both financial and personal, and how likely it is that your future will change.
Many times the situation is defined at the point in your life where you are, your plans, and what it is for you.
See our apartments in Playa del Carmen for sale.
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...View More