Invest in Mexico Vacation Rentals: Expert Tips

Video Transcript - (with Maria & Monica)

Maria:

Hi everybody, this is Maria Ocampo, business development manager for MoXi, a global mortgage company. Let me introduce you to Monica. How are you, Monica?

Monica:

Very good.

Maria:

Thanks for being here with me.

Monica:

Very good, Maria, thank you so much for the invitation. It's a pleasure always being with you and with this little interview, of course. Yeah. As she mentioned, my name is Monica Vazquez. I represent Vacasa, which is the largest vacation rental in all North America right now.

Maria:

If I want to come to Cabo, for example, and I need to... Rentals here were not very popular in the past because there was not enough inventory, there was few. Now, we are getting a lot of inventory, but mostly the hotels. This is perceived as a luxury destination. And it is because I think that the average of per night in a hotel, it's around $500, isn't it?

Monica:

Yeah, it is. Yeah. It's a minimum.

Maria:

Yeah. So Vacasa, it's one of the most important companies in this kind of things, and when I list the company, somebody lists the company with you, how many platforms are you on?

Monica:

See, when they list a property with us, first of all, it goes to Vacasa. And then once I sign the agreement, we put them in Airbnb, Vrbo, Booking.com, Home Away from Home, Expedia, most of the most important platforms. Also, now we are working with Marriott Bonvoy and some other. Usually we have around 14 different platforms every time they sign with us, so yeah.

Maria:

That's awesome because it's a kind of partnership. I always said every time that I have an opportunity that I'm invited in forums or whatever, what I say is that having a property used to be in the past like having a second home. Most of the people, the customers that we both have, Americans, they used to buy properties and buy them, but they used to go to the property for the winter season because most of the buyers were in a retirement age. And now what we have been seeing in our own business is that more and more people in a more younger age are coming to us, to MoXi, to ask for mortgages for buying properties. But they are not looking for properties that they want to live in. It's like they are a kind of investor, that they're looking for places to buy and rent them in these new platforms that after the La Pandemia of the pandemic, it came. It's a different world, isn't it? What do you think?

Monica:

Totally. It's a totally different world. Like you say, after the pandemia, this grew like crazy, because of course people want to go out of their homes and they want to be in a paradise like Cabo to be able to work. So it's a tendency definitely like you're saying, and more and more we're seeing developments like these ones. Probably 80% of the people that buy is for rent. And why? Because of course they don't have their money just sitting there in the bank. Here, they're doing an investment, a real investment. They can use it anytime they want because we don't restrict any time they want to use. They will have an app, and in the app, in the same calendar, they will request, "Oh, you know what? It's going to be available for the next two weeks, so why don't we go to Cabo?" So they can use it anytime. But at the same time, the time that they're not using it is generating money. Plus Vacasa is taking care of their properties because we do property management and we do housekeeping. So we're always looking after their properties.

Maria:

Yeah. And let me tell you that I am not only talking with Monica because of what I see. It's because in my own experience, I already listed a property with her. I bought a property in Cabo, but for my professional career, now I need to be moving from different places for MoXi. We have [inaudible 00:04:43] all over the country. So sometimes I am in Puerto Vallarta, which is the place that I think that I'm going to spend most of the time right now. Living in Cabo, and then moving to Riviera Maya. So with this property that I have, I said, "Well, what am I going to do when I am not here?" It's going to be closed, costing me money because HOAs in Cabo have to be paid. And as you said, the maintenance-

Monica:

And utilities, yeah. Utilities, maintenance. Just someone to go and dust your house, get rid of the dust that is always around here. So I think that's very, very positive.

Maria:

Yes. And when I met Monica, I was not very convinced about paying for somebody to manage my property. But one of the things that really convinced me about Vacasa is because when I contact her and gave her the information on the property, she said, she presented me a full study of how much could I spend to gain from the condo in different seasons and periods of time. And there is nothing that, I haven't seen that before because when you rent your property, you never know how much unless you're renting for a year. But on a vocational basis, it's very un-useful to know, "Hey, how is it going to be the expenses related to the property that these expenses never end? And what is going to be the return of my investment?" Can you tell us how do you do that?

Monica:

Yeah, of course. Every time you're going to decide on something, you need to see real numbers. So we do projections. So this is basically based on offer and demand on the area based on historic data, because the company has been in the market for a long, long time. So we have a lot of data. We pull all that data from a property, depending on where it's located, what are the amenities, and the system will create immediately a projection. It's a projection what return of investment that also has an IDR, like average daily rate. It will give you more or less predictions on the month.

So what will be the minimum, what will be the maximum. Or also you will see, you will be able to see what is the average yearly income, the minimum and a maximum. So we don't try that. Another thing that is really great about the company is that you don't have to pay us. You don't have to pay us. If we don't rent, we are not making money. So that's very good, because once we decide that we're going to sign an agreement with some homeowner about a property it's because we know that we're going to be making money. And of course, you are going to be making money.

Maria:

Of course. Yes. Because when they are doing advertising in so many different platforms that all the people in the planet can access, and they say, "Well, Cabo." And what I see is that the technology right now, it's so important. And I see that they have this technology that the prices even adjust because what she showed me is in the, for example, we are here right now in Vistabella, which is one of the complex more demanded for vacation or rentals because it's very well located and all the amenities here are the hotel amenities. And we were just talking about that right now in Cabo, the average rate for a room of a hotel or one of the hotels that we have in Cabo, that most of them are luxury hotels, it's around 500 dollars.

Monica:

I think that's the lowest. Yeah. Yeah, yeah.

Maria:

So imagine, so every time that somebody can access to an Airbnb or Vrbo or whatever, it's also something that it's good. And on the other hand, I have seen, you were telling me something about Vistabella. Did you already-

Monica:

Yeah, that's funny because I was going to come and see you, but I was going to see a client here. So they just purchased a penthouse, beautiful, by the way. Very, very nice. But the way they knew about us is because on the past stays, they stay in a Vacasa condo here in Vistabella. They loved it. They love the service, they love the amenities, and they say, "Well, why not? Let's go. Let's buy in here," because they were planning before buying somewhere around Cabo, but it's kind of noisy for them because they say, "We are not young anymore." So they really love it.

Maria:

Yes, it's amazing. So I think that these kind of companies like Vacasa, it's helping to the real estate ecosystem to keep on growing because one of the things that a client might say, "Hey, when am I going to buy a condo in Cabo or in Puerto Vallarta or in Riviera Maya. And I am not going to be able, I'm going to be obligated to go always to the same place for vacation because that's the place where I own the property." But I think that the kind of investors that we have right now, it's the kind of people that they are not very much confident about other type of investments in banks or investments in funds or other instruments. Because right now the real estate investment, it's the most I think-

Monica:

Profitable.

Maria:

Yes, profitable and stable.

Monica:

And stable. Yeah, for sure.

Maria:

So a lot of people right now, it's moving with MoXi and say, "Hey, I would like to... Hi, I would like to buy a property in Puerto Vallarta, and I'm going to buy..." And we have clients that have bought with loans with us in three different places. One is San Miguel de Allende because they like the vinegars and there's something that is going. And San Miguel de Allende is a magical place by the way, but also Riviera Maya and get a condo in Cabo. So they are really earning money. They are really not taking gains, not only because of the price of the property that it never goes back.

Monica:

It never goes down. Yes, of course. Yeah.

Maria:

It's increasing, and plus the rentals that they get. And in much of the cases, the rentals give enough to pay the mortgage. And in many of them, they have extra money. So the renters are the ones that are paying for the property.

Monica:

That's correct.

Maria:

And you are paying with a mortgage up to 30 years. This sounds to be like a good business, isn't it?

Monica:

Definitely. We're great partners.

Maria:

Yes. That's why every time I say, "Hey, come on, buy a property, get a mortgage with us, and well, you can just give the property to Vacasa." They are very professional. They do all the job. You don't have to worry about nothing.

Monica:

Yeah. And I mean, we also give a lot of advertising about when they come to me and say, "Well, what do you recommend me?" Because I was seeing, like you say, a property in Tulum or a property in Cancun or a property in Cabo. So we'll say, because we have a lot of information, we'll say, "Well, you know what? Depending on the budget and everything, I could definitely give you more or less a guidance on how to go and what is better. And also we'll give you these projections so you'll be more updated and see what is more profitable for you."

Maria:

Yeah, yeah. Well, so if you are hesitating about buying a property nearby the beach or in a magical town or whatever, and you say, "Hey, okay, it might be a good business to buy a property and get rentals. Who's going to rent? Who's going to take care of the property?" I am going to be like, "I don't live in that city," so now you don't have to worry about that because there is Vacasa that can do the job. They can be your partners in this real estate business. You can get a mortgage with us. They will take care of your property, they will look for the rentals, and they're going to make you gain money. So I think this is a very good perspective for getting into the real estate business as an investor without thinking about that it's not going to be a enjoyable trip.

Monica:

Exactly. So if you need information, if you want anything from Vacasa, write me an email at [email protected].

Maria:

Perfect. Anyway, at the interview, we are going to put your email so they can contact you directly. And well, do not hesitate to do this. And thank you very much, Monica, for being here with me.

Monica:

No, thank you, Maria. No, thank you. We're in a beautiful property, beautiful place. So yeah, we look forward for more interviews.

Maria:

Okay. Well, of course we were going to do. And I would like to interview one of your clients.

Monica:

Oh, of course.

Maria:

To have this conversation, but with somebody that is actually doing it, gaining money from his property, that maybe got a property with one of our loans. And just too that my audience will know that this is something that is very attractive