–
Looking for the best of both worlds? Having a vacation home in one of Mexico’s most popular destinations and earning extra income could be just what you are looking for! For many years, foreigners have been doing just that – renting out their properties in the Riviera Maya and earning a noteworthy profit in the process.
There is no doubt about it: The Riviera Maya is a HOT real estate market! The area is experiencing a boom in residential real estate due to the area’s safety, modern infrastructure and it’s incredible natural beauty. Take advantage of the investment opportunity today. Stop saving all year for your vacation, and put your Caribbean property to work, making money for you while you are away!
Think about this… Millennials are spending over a trillion dollars a year on travel, and are more likely to choose short-term rentals instead of hotels for their stays. This new generation of vacationers prefer authentic experiences and are smart travelers who enjoy having the ability to cook their meals in a vacation rental. This makes Selva Escondida an ideal choice.
With travel trends only increasing in the Riviera Maya, a vacation rental property is one of the best investment decisions you can make! In this article, we will outline the basic things you will need to know to make a success of utilizing your property to its full potential.
A Rental in Puerto Morelos
Our properties at Selva Escondida are perfectly suited for vacationers, with a kitchen, two bedrooms, one bathroom, and beautifully planned grounds that feature several pools, shaded areas, walking paths, an outdoor exercise area, and grills. Your guests will love the feeling of staying in an authentic residential area while being within a five-minute drive to the beach.
The town itself is perfect for vacationers with excellent grocery stores, dining options, and tour companies offering plenty of exciting activities and excursions, all within a quick fifteen-minute drive from Cancun International Airport. For appealing to the millions of tourists arriving daily to the area, the location cannot be beat.
Setting the Scene
How to make your rental property stand out from the rest? Have fun and get creative! Come up with a theme for your rental; the ocean is an obvious choice, but we have also seen mermaid themed, starfish, and so on – your only limit is your imagination. Pick a color scheme, and tastefully decorate. But don’t go overboard! Remember, this is a vacation rental, not your own home, and you will want to make it an appealing space for the wide variety of visitors you will be hosting.
Make sure to invest a bit of time and energy into furnishing it tastefully. Provide plenty of high-quality linens, and basic items needed for cooking. Next, add some little touches like bathing suit hooks in the shower, information to local attractions, or perhaps some bar tools and non-breakable glasses for mixing up the perfect poolside cocktail. People appreciate and remember the little things that made their stay enjoyable.
You will also want to have a bunch of great photos. This isn’t the time to show off your iPhone camera skills. You will want to hire someone or have a friend with a great camera and some experience to help you out.
When searching for a place to stay in a foreign country, people want to know where the Wi-Fi is, how far to the nearest store, and what kind of beds are provided – all before they even arrive. Lots of detailed photos say, “We are prepared for your stay, and we care that you have a great experience here.”
Don’t be misleading in your photos or description. Showcase your beautiful property and our secure, quiet grounds, but make sure you are honest about location, amenities, and any other important details. Your guests should know what to expect before they arrive in Puerto Morelos. With all the wonderful things to see and do here in the Caribbean, this shouldn’t be too hard!
Setting Your Rate
A good rule of thumb is that you can charge 1% of your property value, but in the high season, your price should reflect your property’s demand. December through April is when many property owners see huge returns on their investment! In the low season, you can entice bargain hunters with your lower rate.
You will also want to calculate your monthly expenses. This included fixed costs – Items that do not change per month such as your home payment, taxes, homeowners insurance, the salary of your property manager, listing fees, TV and internet, and so on.
Then, there are variable costs; the things that will change depending on occupancy. These are things such as utilities – electricity, air conditioning, guest supplies, laundry services for guest linens, and property repairs. Knowing your expenses can help you determine the minimum rental rate. This allows you to maintain a budget and a steady income. The nice thing about Mexico is that all of these expenses will be much lower than you are used to, making it even easier to ensure a profitable rental.
Make sure to check out similar vacation rental properties online. Compare their property features, amenities, and decor to yours. Take note of the rates for each of these properties. Does yours have more to offer? Is it larger or smaller? This will give you a feel for what you can reasonably charge for your property while keeping the price competitive. Keep an eye on the market, and adjust your prices accordingly, as property owners consistently report a demand for their rentals.
Advertising
To make sure you attract as many potential vacationers to your beautifully appointed rental property in the Riviera Maya, you will want to get it seen! This is much easier than it used to be, with sites such as Airbnb and Homeaway catering to the millions of people renting out their spaces for a source of extra income. You might want to consider making an Instagram account for your rental property, showcasing up to date snapshots that put the viewer in the scene. You want your potential short term tenant to feel that your home is their home.
Legalities
Before you get started with your property, you will want to do your due diligence and verify the terms of the fideicomiso to confirm who is the party that has the authority to lease. You will need to make sure that you, as the beneficiary, have the legal right to do so. We have discussed how property ownership works here.
Don’t let this step discourage you from an income property, as many fideicomisos include this language, and if they do not, they can be simply amended to include express leasing authority for the beneficiary. It is well worth your time to make sure everything is done correctly right from the start, that way, there will be no surprises later!
Required Taxes
The next thing you will need to keep in mind is that just like your home country, income earned in Mexico will require the payment of taxes to the Mexican government. Foreigners are obligated to pay taxes on income generated in Mexico.
Whether you are a partial or full-time resident, you will need to register with Mexico’s Registro Federal de Contribuyente (RFC). This is similar to your Tax ID number. All rental income is subject to Impuesto Sobre la Renta (ISR). The ISR tax rate is based on 25% of your gross income earned.
The second tax that is associated with your rental property is one you have probably seen before if you have booked a vacation rental. It is the Value Added Tax (VAT), which is 16% and is tacked onto the property’s rental fee, paid by the tenant, and then to the Mexican government by the owner. This tax is common in many countries, and the percentage in Mexico is much lower than in other places.
Property Management
If you plan to be back in your home country some of the time while you are renting out your property, your ability to be hands-on will be limited and it may be in your best interest to hire someone local to the Riviera Maya to handle the day to day responsibilities of a rental property.
These can include arranging cleaning of the rental between guests, property maintenance, meeting guests, and assisting them with questions or needs during their stay. Many people who are employed as property managers in the area speak both Spanish and English and finding a reputable one is not difficult.
Although getting a vacation rental property up and running requires some initial planning and effort, many have found it to be an amazing source of income, and pride. Imagine having your own vacation home in the Caribbean that is making money for you while you are away! This is just one of the ways you can enjoy the good life with Selva Escondida Residential, Puerto Morelos.
If you have any questions, feel free to send us an email, and we’ll be happy to help!
