Home Headlines More Mexicans buy their second home to rent it and obtain an extra income

More Mexicans buy their second home to rent it and obtain an extra income

by Magali Alvarez
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The purchase of properties is a way to increase wealth, and after the Covid-19 pandemic, with the arrival of digital nomads, there is greater interest in acquiring a second home in order to obtain income through short-term rentals.

In the last five years the purchase of second homes increased by over 20%, according to the real estate consulting firm Neximo, while data from the rental platform Airbnb indicate that during 2022 the average annual income of homeowners who rent their homes was around 64,000 pesos, an amount that varies depending on the area and the home.

“Today there are many reasons to invest in a second home, in tourist areas we find a high demand both domestic and foreign that can generate a significant return on investment related to occasional rent, but at the same time we also see more openness in supply. Some players are offering down payment or financing facilities for home purchases,” said Karim Goudiaby, ceo of Neximo.

Daniel Hoyos Setén, commercial director of Grupo Miraro, explained that many homeowners find in renting the opportunity to pay part of the monthly mortgage loan payment with that income, which makes it much easier financially, in addition to obtaining capital gains on the property over the years.

But, what should be taken into account when buying a second home, Daniel Hoyos explained that the best thing to do is to identify the purpose of the property, whether it is intended to generate income through rent or for personal use, since this depends on factors such as location, finishes and services, aspects that can increase or decrease the cost.

Victor Guido, after working for 25 years as an importer and seller of costume jewelry, acquired an apartment that he used as a rental platform, and after three years of owning it, he is going for a second purchase to continue capitalizing his investment through short term rentals.

What did Victor consider to buy his property, an important factor was the location, he details that he contemplated the pros and cons of buying housing in Guadalajara, he observed from the massive events that are held every year locally and some that will be held, such as the World Cup or international events.

According to Airbnb, a week in a mini apartment near downtown Guadalajara can cost more than 5,000 pesos.

Daniel Hoyos Setén, explained that other factors to consider are the services of the property and those that can be found in the area, with this it is possible to identify which can be more attractive to potential users; it is important to take into account that having additional services make housing more expensive, so it is advisable to recognize and compare with other options within the location.

In addition, the cost of furnishing and decorating the property should be taken into account; Daniel Hoyos recommended taking into account the risks of renting a home, among which is the possible breakage or increased wear and tear of the furniture.

Lastly, Victor Guido, who rents his property, explained that it is advisable to review the cost of placing the property on the rental platforms and a photographic session, as well as to keep a savings fund for expenses related to constant maintenance.

Fractional housing an alternative

Karim Goudiaby, explained that the main market for this scheme are people who already have a previous patrimony, however, they are beginning to observe that some people interested in short term rentals are looking for fractional housing.

Fractional housing is a model in which a group of people acquire a fraction of a property, to which they can have access for a certain number of months per year for personal use or for rent.

He explained that despite the interest of foreigners in acquiring housing in this scheme, for them it is complicated, and they prefer to continue renting.

TYT Newsroom

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