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5 Reasons to Invest in Residential Real Estate

Luxury lots offer an additional 5% in rental yield.

Homes that operate as tourist accommodations under a hotel brand can be priced up to 30% higher.

The real estate market is one of the most sought-after by investors, as evidenced by the fact that in 2023, this sector accounted for 7.5% of the national total, and it is expected to reach 10% in 2024, according to specialists from the Mexican Association of Real Estate Professionals (AMPI). While investments in general contributed 4.2 percentage points to the country’s economic growth last year, according to the National Institute of Statistics and Geography (INEGI), real estate investments had a significant impact.

It is important to note that the construction of residential spaces meets the demand for housing, but the construction of luxury spaces is aimed at addressing future comfort needs. Furthermore, the residential sector offers the possibility of being used as tourist accommodation. In fact, according to a survey by the company CBRE, independent homes with a hotel brand label are priced up to 30% higher than similar properties.

This is an attractive and reliable option, but to help you make up your mind, here are five reasons why it’s worth investing in this sector:

• You can attract foreign buyers: This sector is not limited to the domestic market; on the contrary, it often attracts international clients. Up until 2022, 40% of buyers were foreign. Even if you decide to rent out the property, you can enjoy this benefit, as many tourists seek more private accommodations for temporary stays. The advantage here is that you can charge higher prices.

• You’ll find better financial returns: Over time, homes tend to maintain or increase in value. However, more luxurious properties always appreciate more. Generally, rental yields in major cities across the country range between 5% and 8% annually, while in tourist areas, this can reach 10%. However, luxury lots offer an additional growth of up to 5%.

• You choose the final look: This option gives you much more freedom to decide on the design of the construction, from the materials to the amenities it will have inside. Unlike residential projects that usually follow a basic model, in these types of properties, you can make modifications even after construction. This is the exclusivity they offer, which is why they are priced above average.

• You’ll have better long-term stability: As mentioned earlier, investing in this sector can generate almost immediate income or delayed income over a longer period. The second option is usually the most sought after, as acquiring a house to rent out guarantees a monthly, weekly, or daily income as long as the property is occupied. In this way, you can improve your financial stability.

• You won’t pay high fiscal taxes: As it is a commercial activity, certain interests must be paid. However, in this field, real estate offers an advantage. When filing your annual tax returns, you can deduct up to 100% of the mortgage interest as a buyer. If you’ve made improvements to the property, you can also deduct up to 20% of the original total value, according to the Income Tax Law (LISR).

In addition to the benefits mentioned above, one factor that may encourage you to enter the real estate world is that you don’t need to be an expert to participate and benefit. Of course, it is advisable to be well informed about the regulations and procedures. Remember that information can be your best ally in achieving better profits.

Guía rápida para Comprar Inmuebles en CDMX

Coldwell Banker México: coldwellbanker.com.mx

https://gpvivienda.com/blog/invertir-en-bienes-inmuebles-mexico

https://www.blog.monific.com/post/10-razones-claves-para-invertir-en-bienes-raices-en-mexico

https://www.blog.monific.com/post/reporte-del-mercado-inmobiliario-en-mexico-en-2023-evolucion-actualidad-perspectivas#:~:text=Puntos%20clave%20del%202023&text=Históricamente%20representaba%20el%207.5%25%20del,demanda%20que%20supera%20la%20oferta

https://creasoluciones.com.mx/sector-inmobiliario/crowdfunding-inmobiliario-una-nueva-tendencia-para-invertir-en-bienes-raices/#:~:text=Se%20obtiene%20un%20monto%20de,escoge%20un%20proyecto%20a%20financiar

https://nolab.mx/blog/inversion-inmobiliaria-tendencias-rentabilizar-propiedades-lujo-cdmx

https://nolab.mx/blog/ventajas-de-invertir-en-lotes-residenciales