7 types of real estate investment in the southeast of Mexico

Blue World City investment has attracted the attention of entrepreneurs in search of businesses with high profitability, and a property in a good location can become a great ally.

Investing in land for industry or acquiring commercial lots which have great benefits are excellent options to invest your capital in a stable market that preserves the value of the assets.

In the Mexican southeast, real estate activity has been favored by the enormous growth that cities such as Mérida, Cancun, or Playa del Carmen have had over the last few years.

But where is this business headed? Is it wise for you to invest in this region right now? What type of property would be the best option? To answer these questions, we will talk about the types of real estate investment that you can make to generate profits.

Types of real estate investment

When considering a real estate investment, there is a wide range of options to choose from, as the real estate market is vast and offers business opportunities for anyone who wants to invest in real estate.

It is important to understand that the real estate market is not limited to the purchase of houses or apartments, because thanks to the variety of land use of a land, these can be used in various sectors, from residential to commercial and industrial.

Among the many options that exist, seven stand out, of which we will talk to you below, since they are ideal to start investing in the southeast of the country, where the cash flow is constant thanks to the economic and real estate growth of the area.

1. Commercial land

Acquiring commercial properties is undoubtedly one of the best real estate business strategies, since in the short term you can obtain benefits, either by renting the land for franchises or starting your own business.

Land for commercial use – as its name implies – refers to portions of land whose assigned land use is for commercial purposes. This type of property is what is required to start a business, from setting up laundries or convenience stores to shopping centers.

The variety of products or services that can be traded in this type of land is very wide, and unlike residential land that has advantages and disadvantages, commercial ones are one of the best real estate investments that can be made.

We can say that a land is a blank canvas in which the options are unlimited, because you can build, or if you don’t, the maintenance costs will be minimal, so it only remains to wait a certain time for its value to increase and sell it in again making a considerable profit.

This type of land is sold at a higher price than a residential one, so it is a better option when considering buying a property.

2. Offices

Offices represent an opportunity with lower supply and high demand, so if you acquire this type of property, you will always have enough market to rent them.

Whether you build offices on your land or acquire the property already built, the offices and business centers provide excellent profitability due to the ease of obtaining short-term income.

The offices are profitable because they can establish rental contracts for more than one year, in addition to being an emerging market.

In southeastern cities such as Mérida, Cancun and Playa del Carmen they are beginning to become more relevant, which has been reflected in the large number of business centers that have been built and the construction plans for many more.

3. Commercial premises

Like offices, commercial premises provide high lease returns, and there is not enough supply of well-located premises to meet the needs of companies and businesses looking to start or expand.

Some key points to acquire commercial premises are the location, the quality of the property and the amenities.

  • Location: As we have mentioned, if the place has a strategic location, it will be easy to rent it or set up a profitable business, otherwise, for more amenities or benefits if it is not in a good area, it will be difficult to rent it or make a business prosper.
  • Quality of the property: There are two possibilities, buy a commercial land and build or buy the premises already finished. In the first case, you can make sure that the quality of the materials used and the workmanship is the best. In the second case, it will be necessary to make an investment to know the quality of the property and avoid investing large amounts of money in maintenance or repairs. Therefore, it will always be safer to buy land and build on your own.
  • Amenities: It is about thinking about the needs of the type of business that could be installed in your premises. It is necessary to have sanitary services, electricity, drinking water, paving, access to internet services, proximity to avenues or possible suppliers, parking space, among others.

An example of important commercial developments in the Mexican southeast are: Parque Bazar Playa del Carmen, Triangulum and Gran Via, as well as Parque Bazar Cancun.

4. Parking spaces

This is an excellent option if what you are looking for is to save construction costs, because unlike commercial premises or offices, it only requires a toll booth, sanitary services, paving and the infrastructure that this type of business requires.

Parking lots are a profitable business – especially – in commercial areas, for example, it is possible that a shopping plaza does not have enough space for the volume of vehicles that visit it, in this case building a parking lot as close as possible to it increases the Possibilities of renting pension spaces to tenants.

There is also the option of leasing the land so that other people use it for this purpose, and they are the ones who take care of the logistics of the business.

5. Industrial land

The industrial sites have features and locations different commercial and residential; this is because the type of land use they have is for industrial activities in many harmful cases to health, which should be away from the urban sprawl.

This is not always the case, since you can acquire land for industrial purposes to build a distribution center, warehouses, manufacturing, among others that do not affect the quality of life of the inhabitants of the area.

However, the common thing is that they are located on the outskirts of the city, and several industries of similar fields are concentrated in the same area.

To satisfy the needs of an industry, they must be large plots or large lots, close to suppliers, main avenues and with quick access to the exit of the city.

In the case of Mérida – Yucatecan capital – at BMF inversions we have two large industrial land projects with high capital gains in the western part of the city: Intersocial and Advance Yucatán Industrial Park Peripheric.

 

6. Macro lots

The macro lots are large tracts of land located in strategic areas with high added value and towards urbanization.

They represent a great opportunity for large-scale real estate projects, and allow them to generate a return on themselves.

This type of land is ideal for developments such as private residential areas, subdivisions, shopping malls, office buildings, distribution centers, industrial parks, warehouses, factories, among others.

To make an investment of this type requires a large capital, however, an option that also results in large profits in the medium term, is to divide the land into lots and sell them, in this way more people can benefit from the location and participate in the commercial or industrial development of the area.

7. Real estate investment funds

A Real Estate Investment Trust or Real Estate Investment Trust —REIT for its acronym in English— is a company that has real estate assets whose income is obtained by leasing said properties.

These companies participate in the stock market with shares that contribute the amount necessary to buy, develop and manage real estate properties. The profit, in this case the profits, is distributed as dividends.

Among the various advantages of this modality are:

  • Quickly sell the shares if necessary to obtain liquidity.
  • They allow you to invest in residential and commercial properties.

Why invest in the southeast of Mexico?

The Mexican southeast during 2021 has reported a considerable increase in its contribution to the total Foreign Direct Investment of the country only during the first quarter of the year.

It has been concluded that this deviation of investments towards the southeast has been due to the fact that, compared to other regions, the southern zone has diversified its investment options allowing more businesses to enter and provide their services.

Likewise, the southeast has gained strength in key sectors that have made it the focus of attention for investors, and it has shown to possess the ideal qualities to be a profitable option for companies:

  • World-class tourist activity.
  • Great connection with abroad.
  • Huge economic and industrial development.
  • Natural and cultural wealth.

But which sectors have benefited the most? One of them, without a doubt, has been real estate.

Either due to the increase in tourism or migration to these cities, the growth in real estate activity has made it possible to position the southeast as a great investment option in this field.

Residential, commercial projects —and even investment lots— have attracted the attention of small, medium and large entrepreneurs in recent years, thereby greatly benefiting the capital gains of the land and properties that are acquired there.

The Mexican southeast is just showing what it has for the rest of the world, but it still has a long way to go to take advantage. Both the government and private investors know this, and that is why they continue to bet on the region.

The Mayan Train, for example, is the most important infrastructure, socioeconomic development and tourism project that is planned to culminate in the current administration. It is planned to have a route of 1,525 kilometers that covers all the states of southeastern Mexico.

This has been a collaborative work of both public and private investment, ranging between 120 and 150 billion pesos. Approximately 10% in charge of the Government and the rest under other companies.

But what does this mean? How does this type of project benefit the real estate sector? Throughout.

The business opportunities, the quality of life, the services and the economic growth of a city also depend on the development that the city manifests.

We are not only talking about the arrival of tourists, but about investment opportunities, this makes the region an attractive area both to live and to do business.

This is where the real estate sector benefits, and who does not want to live in a city that is safe for the family and profitable for business?

This is a phenomenon that can already begin to be noticed. Cities like Mérida, Yucatán draw attention for their positive attractions, such as being considered one of the two most attractive cities to invest in housing within the country, thanks to high security rates and job creation.

For its part, Quintana Roo is shown as one of the most important emerging markets in the real estate sector at the national level, and a real estate investment boom is anticipated for 2022 due to an investment of 2,000 million pesos -during 2019-2021- that will benefit mainly to Playa del Carmen and Cancun.

Investing in real estate secures your future

It was to be expected that investment in the real estate sector in the southeast of Mexico is today one of the main attractions for many entrepreneurs who want a business with a good return on investment and capital gains.

The region —especially Yucatán and Quintana Roo— is heading towards higher levels in real estate matters, which is why more and more national and foreign companies are betting on investing in this area.

At BMF inversions we have extensive knowledge in the real estate, architectural and legal industry. We are focused on projects of commercial and industrial investment lots with high profitability and with strategic locations.