One of the things to consider after you have purchased property in Mexico is whether you´d like to rent it out. Earning some money from your new investment can go towards paying off any funds that were borrowed to make the purchase or simply serve as a profitable side business. So the question invariably leads to whether you should look at short-term rental (also known as a vacation rental) or long-term rentals as the way to go. There are a lot of things to consider when deciding which one is best for you, and below I have provided some information outlining the differences between the two, which I hope will aid you in your decision making process.
When you are renting out your house or condo for a few days at a time (or even a weekend) this is referred to as a short-term rental, or vacation rental. In general this would usually apply to tourists or visitors from out of town who are looking for an alternative to staying in hotels or purchasing a vacation package. You will likely rent out on a weekly basis, or even offer nightly rates. In Playa del Carmen it´s common to charge double or more during peak holiday seasons like Christmas and New Year’s Eve, where demand is quite high. This also applies to popular festivals like BPM in January which tends to draw groups of people who are looking to save on expenses by sharing a house or condo.
In the case of long-term rentals you would be renting your place for an extended period of time, with tenants typically signing contracts for 6 months or 1 year. There are many advantages to this, the most obvious being that the monthly payments become a source of steady revenue that you can rely on. As an owner you would obviously be limited in the amount of use you can get from your own property, so when it´s your time to enjoy vacation and are hoping to get some time in your home you might be out of luck.
As you can see from the above information there are many pros and cons to either rental option, so you´ll have to make some decisions on just how much time you want to spend in your home and whether earning income is a top priority. Your new home in Mexico has great potential as an investment, but the way you earn money from it depends on your own particular lifestyle and goals.
By Thomas Lloyd for TYT
Thomas Lloyd, from Indiana, is a graduate from the prestigious Krannert School of Management at Purdue University, where he obtained a degree in Administration with the Financial Management option. He has been working professionally in Mexico since 1995, and in 2011 he was the first person to ever attain a new nationally regulated Real Estate degree and professional identification number for the Country of Mexico. In 2009 he was voted Realtor of the year, because of his professionalism, attention to customers and knowledge of procedures and the market. Also, he has been active in the real estate community serving on the real estate association’s Honor and Justice Committee. Thomas founded TOP Mexico Real Estate to help non-Mexicans have an enjoyable and safe experience as they purchase and invest in real estate in Mexico.
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