A How-to Guide to Real Estate Investing

When a person buys real estate, they aren’t just buying a place to live. They are making an investment. They are saying that if they support their home long enough, one day, it’ll support them. And that’s true, especially now.

Real estate prices are skyrocketing in the United States and around the world. Cities like New York and Chicago have seen their home prices rise by 4.7% and 8.6%, respectively. That trend is only expected to continue in these cities and across the country.

Mexico sees a similar trend in its housing markets. Mexican real estate prices are skyrocketing in most major cities, but currently, you can get some great real estate for pennies on the dollar.

When you buy a home, you will want to make sure the value of the property will increase. And there is quite a bit to consider when making the decision to invest in a property. In this, we will discuss how a real estate investment will bolster your portfolio and which of our properties are worth investing in.

How to Make Money Investing in Real Estate

Many young Americans are deciding between owning and renting property. For many, renting is the only option here in the states. Skyrocketing home prices coupled with stagnating wages is making the idea of home ownership out of the question for many young Americans. 

This is why Mexico gives many a way not only to own a home but also invest in property that may give them the ability to make money from their property and build a passive income generator. If you are new to the real estate market or just need a refresher, here are a few reasons why you should own real estate.

• Right to Transfer- This means you will have the ability to transfer ownership of the property to someone else or put the property in the will
• Bundle of Rights-This is all of the rights you gain over your property as a homeowner. It also means you won’t have to deal with a landlord.
• Encumber- This means you can take out loans on your house for other things. For instance, if you want to build a pool but you don’t have enough cash, you can take out a loan against your home.
• Build Wealth- When you are ready to start to make a profit off your home, you can lease it. 

Once you’ve decided to lease your home, here’s how that works.

Cash Flow

In simple terms, this is money spent and money earned from a property. Money spent on the property is things like your mortgage payment, taxes, HOA dues, and upkeep. The goal is to make enough from your tenant to cover that and maybe even make a profit. Let’s say you made a $200 profit a month, which means $2,400 a year.

Appreciation

If you are leasing a single home, odds are you won’t make a ton of profit from your tenant. Your profit will come with the appreciation of your home. This is what we mean when we say investing in real estate.

When you buy a home, you are expecting the price of that home to rise. In Mexico and Baja California, that is happening almost across the board. In Tijuana, housing costs went up 10% last year. That is a bit of an outlier, so let’s say you bought your house at $250,000, and each year the price of your home went up by 5%. By your ten-year mark, your home would be worth $407,224.

Loan Paydown

Throughout these ten years will be making regular monthly mortgage payments, let’s say $1,200 a month. After ten years, you will have paid off $144,000 of the home. That leaves you with $106,000 left to pay, but if after ten years you want out, that means over $300,000 profit from your home appreciation and an additional $24,000 from your tenant. Not bad for not doing anything. Like we said earlier, the more homes you buy, the more you can see how these profits can compound themselves.

Home Loans for Mexico Property

Real estate is the best way to make passive income, and I’m sure you’ve heard that. Hell, I’m sure you’ve told people that before. And it’s because it’s true. All you need is some capital or at least good enough credit that a bank will give you a loan. For help with this process, please visit us here with any questions you may have.

There are a few legal hoops to jump through when buying a home in Mexico as an American, and we have a few other blog posts that go more in-depth on these topics, so please check out our other blogs about home ownership in Mexico as a foreigner.

Where in Mexico

As we talked about earlier, Mexico is seeing housing prices skyrocket as their economy continues to go up and their population becomes more middle class. There are a few International Land Alliance developments in a few key Baja cities and towns that are great investments.

San Felipe, Mexico

San Felipe is a port city on the western side of Baja, California. Only about 45 minutes away from downtown San Diego, which makes it an easy commute for those who want to work in the states and live in Mexico. The area is also renowned for its cuisine and wine, as Valle de Guadalupe is just north of the city. 

We have a couple of developments around this beautiful city. One is Plaza at Bajamar. This is a beachfront development with easy access to the city and a couple of great golf courses. The other is Valle Divino, which is a little more inland, but right next to the wine-growing valley in the region. 

Either way, San Felipe is a fantastic city that is going to blow up in a similar way as its neighbor, Tijuana. It’s an excellent port city with great exports. If there is anywhere in Mexico to invest in, it’s here. Travel down in an RV or truck and spend time at Kiki’s San Felipe. A great way to get to know the city and enjoy the ocean.

Why International Land Alliance

There are plenty of people that can help you buy a home, and we hope you trust us to put your home-buying dreams and financial future in our hands. We have an impressive track record in real estate development, so we are confident in the future of your new home.