When investing in real estate, you will come to the conclusion that there is a very wide variety of options that will sound attractive to realize the investment you have in mind. But really, which is the best option for you? You’ll come across residential lots, commercial use land, presale apartments, luxury villas, eco-friendly homes, and the list can go on and on. The main thing that shall be kept in mind is, “what do you want for your investment to do for you?”. Thinking about buying now and selling in the short term, are you interested in a monthly cash-flow through rents, or maybe you’re interested in developing a real estate product to sell by units?
A low-risk investment will more than likely give you a lower ROI, but again – it’s low risk, where your money is practically guaranteed. Under this kind of investment there are nightly and monthly rents which both are very attractive and again, it depends on what kind of risk you’re willing to take. Nightly rents usually come with a higher risk but the potential income will be at least 25% higher than a monthly rental contract – the risk here is in case the property isn’t rented more than 75% of the month, then the income might be lower than a fixed monthly rental.
When it comes to investing in the land it’s important to consider what kind of business you’re looking for – if your interest is to buy a piece of land instead of having your money in the bank, then it’s always a good idea to buy land opportunities, sit on it for at least 12 months, and resell when the price of the land increases to the desired price or ROI and it’s put back into the market to resell. We’re looking at at least a 20% ROI per year – this is an average based on our experience, this doesn’t mean this is a fixed rule for every land resale in Tulum.
Another option for land investment is when one’s plan is to develop a condo, home, or residential neighborhood – this is where you’ll be seeing the highest ROI, but it’s also the investment plan where most of your time will be demanded since this is a 100% hands-on type of investment, where your ROI will be based on your performance. Usually, the ROI here will be between 20% – 55% of the development’s total investment.
