Real estate investment in recent years in Yucatan and specifically in Mérida, the state capital, has been booming. However, you have to understand the context of the origin of this investment niche.
Mérida is the commercial and service hub of southeastern Mexico. It has all the services of a capital city. Transport, although lagging behind, has integrated new routes it also has a good level in Public and Private Universities, Hospitals and Squares or Shopping Centers.
The geographical location of 35 km from the coast through a wide land corridor gives the city an invaluable tourist attraction. In fact, at certain peak hours, it takes longer to get to the historic center than to the port.
One of the most important hallmarks is the security and citizen peace that attracts many families from different states of the country. This distinction is a combination of the security policies that have been implemented and the confidence of citizens in the police. In Mérida, if you call 911 they always come and in excellent response times. There is a culture of complaint.
These attributes add to the added value of the properties located in the city. In addition to the avenues, public parks, sports centers, cultural centers, and theaters.
The city is divided into development zones.
Merida’s Historic Center, one of the largest in all of Mexico, houses buildings from the colonial era that have been restored by their new occupants, true jewels of architecture.
The owners are foreign residents from Canada, the United States, and Europe. This community covers some old neighborhoods such as Santiago, La Mejorada, Itzimná, and San Juan among other emblematic suburbs. It is there that the world-famous culture of the Yucatan also resides.
The south of the city is a densely populated area with popular housing, it is the oldest next to the Historic Center and is certainly the one with the greatest challenge and backwardness in terms of services and infrastructure.
The western area has more development, connects with the highway to the city of Campeche, and has become a logistics corridor where industrial warehouses are located and which are connected through the Periférico and the highway that goes straight to the deep sea port located in Progreso. Yucatan.
The housing area includes mid-range subdivisions such as Residencial Pensiones, Yucalpetén, Juan Pablo II, and Francisco de Montejo and connects with Ciudad Caucel a macro-project in conurbation with the city of Mérida with large housing development.
The east connects with the southern entrance of Mérida from Cancun, it is a popular area with settlements with good service and infrastructure requirements, however, the area further north has greater resources with mid-range housing units such as subdivisions such as Los Héroes.
TIP IRVING. A risk factor in companies in the material security of investments. Thefts in transportation, robberies, or extortion of businesses affect the prices of products, but also the decisions of investors to set up a business. It is important that the money be used for productive businesses in places of greater security.
Let’s talk about the North of Merida
The North is the most developed area of the City of Mérida. The most modern. High-end settlements, residential subdivisions, avenues that interconnect shopping malls, restaurants, schools, and all services are located.
Something important to say is that the Periférico that surrounds the city interconnects all the cardinal points back and forth continuously and without traffic lights, making this road very busy.
The northern area of the city extends beyond the Periferico limit and has allowed the development of exclusive areas and multiple private residential subdivisions. The main campuses of private universities are located in this area too.
I stop for a moment at the housing description to go get a glass of water. By the way, the city is very hot during some months of April, May, June and July with temperatures exceeding 40 degrees Celsius.
In recent years, Mérida has increased its real estate development by integrating vertical apartment buildings, a new lifestyle for new generations close to shopping centers, gyms, cafes, restaurants, and fun night activities.
Everything I write is evidence, it exists, and it is not a 20-year project. It is present tense.
What is surplus-value?
Returning to the subject of real estate investment, we must define a necessary agent to understand: Capital gains.
Capital gain means the increase in the value of land or property as a result of modifications of public or urban works in its vicinity, without the owners having spent on it. It is the increase in the value of the property over time. How long?
It will depend on external variables and it is not possible to know for sure.
And another feature is that this “surplus value” or gain will only be real at the time of sale, so the investment horizon is indefinitely long term and the only way to convert it into liquid money is, as I said if the real estate is sold.
The great advantage is that the capital is guaranteed by the property.
The ownership of the real estate must have all the legal support that accredits you as the legitimate owner. Therefore, the property must be registered in the public property registry of the State of Yucatan. This is basic, but you have to understand that the person who sells you real estate is not necessarily the owner. Whenever there is a purchase-sale process, the capital gain applies.
Direct investment in real estate projects
The boom in real estate development in Mérida has brought investors looking for a very interesting model that consists of placing capital in real estate development projects.
In this model, the investor does not have to acquire a house or land. What he contributes is capital to a qualified company that is dedicated to the construction and commercialization of real estate projects that offer very attractive returns to its investors.
The interesting thing is that the investment horizon is not longer than 5 years, as happens when you acquire land or an investment lot. It is a scheme in which the investor puts his money to work for an attractive return.
The advantages are:
- Advantage 1, shares of the company are delivered.
- Advantage 2, Legal Certainty.
- Advantage 3, Fiscal Certainty.
- Advantage 4, there are options for terms and contributions.
- Advantage 5, Depending on the options, yields are obtained.
- Advantage 6, there is constant information, and the destination of the resource can be observed. term
At PROVIFIN we have flexible investment projects starting at $200,000 pesos (10,000 USD), and with attractive returns.
One of the aspects of real estate investment, in my opinion, has more financial elements than marketing. Buying a house to live in has more to do with family and estate planning. Obtain intangible benefits in the short term, but we will share this important concept later.
My recommendation is to look at the tree without losing sight of the forest.
by Irving Alberto Escalante Castillo
Irving is a Public Accountant from the Autonomous University of Yucatan. Master in Business Administration with a specialty in Finance from the Tec Milenio University. He has more than 20 years of experience in leadership of planning teams and execution of business projects, crisis management, and corporate finance. He has collaborated with companies such as MEGAMEDIA where he served as Director of Administration.