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Spokane, Washington  Est. May 19, 1883
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Mexico property offers investment opportunities

Tom Kelly

As we headed out for a special day of snorkeling, sharing the water with a group of baby sea lions off Esperitu Santo Island in the southern Sea of Cortes, I thought about the headlines that keep North Americans from visiting Mexico.

The reports of crime have slowed the flow of many tourists to southern Baja and many other destinations south of the border, but it has not stopped the steady stream of Europeans, South Americans and Asians. Though much of the violence occurs in border towns, Mexico City has had major problems as has the community of Culiacan, two hours north of Mazatlan.

Recent reports of swine flu in and around the capital have also slowed recent visitor traffic.

In reality, the rest of Mexico is unchanged and laid-back, warm and welcoming to foreigners. It has received a bum rap, as some irresponsible reporters have raced to make the world believe that the entire country is on the brink of a bloodbath. That is simply not the case, and many of the areas continue to appreciate, unlike most of the markets in the U.S.

As a beach-crazy member smack-dab in the middle of the boom generation, I vividly remember following the exploits of Parnelli Jones, the celebrated race car driver, as he headlined treacherous off-road Baja events, and I too felt a twinge of loss in 1970 when the first paved road stretching the length of the Baja peninsula’s rugged terrain was finished.

Today, the tourist advertisements of luxuriously grand and appointed developments belie the fact that until the 1950s, the beautiful coasts on both sides of the southern Baja were deserted, except for a few small villages whose only interest in the sea was as a reliable source of food.

Here in La Paz, which is one of the few places in the world where the desert literally collides with the sea, you now find modern tourist facilities and a high standard of living.

The Costa Baja Resort ( www.costabajaresort.com) combines beachfront homes with a modern marina, shops, health clinic, golf-course and hillside homes all on 500 acres just five minutes drive north of the town’s malecon, or seaside strand. Already built, sold and occupied are a combination of 60 villas and condominiums on the beach or overlooking the marina. Prices ranged from $195,000 for a small studio to more than $1 million for a penthouse.

Jim Fletcher, a Seattle attorney and investor, was drawn to La Paz a few years ago because it was unlike any of the other Mexican areas he had visited. Stirred by the Costa Baja setting, protected marina for their boat and proximity to town, Fletcher and his wife, Marlene, purchased a waterfront home and added three additional units overlooking the marina to rent to golfers, snorklers and fishermen seeking the plentiful dorado (mahi-mahi) in the Sea of Cortes.

“We had owned a place on the Algarve in Portugal for 17 years and it became a logistical challenge,” Fletcher said. “We eventually sold it about three years ago and began looking for another area by the water that we could enjoy. I had been just about everywhere in Mexico and wasn’t eager to buy a place in any of them. I had no intention of buying in La Paz when I went down there, but that soon changed once we began looking around.”

Across the Sea of Cortes in Mazatlan, El Cid ( www.elcidrealestate.com) – one of the best-known names in Mexican property – has registered 10 percent appreciation in each of the past 10 years. Its master planned, beach-front community includes a 27-hole country club, four hotels, canals, tennis courts, fitness center, spa, restaurants, bars and shops. It is situated in the heart of the city’s “Golden Zone.” New two-bedroom, two-bathroom homes on the golf course start at $180,000.

“Given the U.S. economy and cost of housing, a place like El Cid makes a lot of sense,” said Rick Cesari, a Seattle businessman. “I could easily rent out to fisherman, golfers … the place is a great investment property even without the personal use.”

One of the more intriguing possibilities in Mexico lies about one hour south of Cancun on the Caribbean Sea’s Riviera Maya. Madrid-based Bahia Principe Group ( www.bahiaprincipecondohotel.com) is building a condotel, Sian Ka’an, on a golf course adjacent to its huge waterfront resort that guarantees owners-investors a 10 percent annual return on their investment for seven years. Personal use is allowed, yet owners-investors can also enter their unit in the guaranteed rental pool. After that period, owners-investors can renew the contract or take sole possession of their unit.

The hotel group said it needs more options for the visitors during the more popular seasons of the year and is more than willing to guarantee a return – regardless if the unit is even occupied. The condo hotel gated community with 24-hour security has access via private bridge to the resort and its pools, spa, restaurants, tennis courts and boutiques.

A 10-percent guaranteed return on real estate in the sun?

Tom Kelly is a former real estate editor for the Seattle Times. His book “Cashing In on a Second Home in Mexico: How to Buy, Rent and Profit from Property South of the Border” was written with Mitch Creekmore of Stewart International.
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