Investment Property in Mexico City

Investment Real Estate in Mexico City

Mexico City property investment can be a worthwhile venture if you are selective with the areas you choose to invest in. If not, you could find that your investment suffers due to low rental yields, dwindling demand, and slow property price growth in many parts of Mexico City .

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Search Map of Mexico City Investment Real Estate

Mexico City (Spanish: Ciudad de México, locally [sjuˈða(ð) ðe ˈmexiko] (listen); abbreviated as CDMX; Nahuatl languages: Āltepētl Mēxihco) is the capital and largest city of Mexico and the most populous city in North America. Mexico City is one of the most important cultural and financial centers in the world. It is located in the Valley of Mexico (Valle de México), a large valley in the high plateaus in the center of Mexico, at an altitude of 2,240 meters (7,350 ft). The city has 16 subdivisions known as boroughs or demarcaciones territoriales.

The 2020 population for the city proper was 9,209,944, with a land area of 1,485 square kilometers (573 sq mi). According to the most recent definition agreed upon by the federal and state governments, the population of Greater Mexico City is 21,804,515, which makes it the second-largest metropolitan area in the Western Hemisphere (behind São Paulo, Brazil), the eleventh-largest agglomeration (2017), and the largest Spanish-speaking city in the world.

Greater Mexico City has a GDP of $411 billion in 2011, which makes it one of the most productive urban areas in the world. The city was responsible for generating 15.8% of Mexico’s GDP, and the metropolitan area accounted for about 22% of the country’s GDP. If it were an independent country in 2013, Mexico City would be the fifth-largest economy in Latin America, five times as large as Costa Rica and about the same size as Peru.

Mexico’s capital is both the oldest capital city in the Americas and one of two founded by indigenous people, the other being Quito, Ecuador. The city was originally built on an island of Lake Texcoco by the Aztecs in 1325 as Tenochtitlan, which was almost completely destroyed in the 1521 Siege of Tenochtitlan and subsequently redesigned and rebuilt in accordance with the Spanish urban standards. In 1524, the municipality of Mexico City was established, known as México Tenochtitlán, and as of 1585, it was officially known as Ciudad de México (Mexico City). Mexico City was the political, administrative, and financial center of a major part of the Spanish colonial empire. After independence from Spain was achieved, the federal district was created in 1824.

After years of demanding greater political autonomy, residents were finally given the right to elect both a head of government and the representatives of the unicameral Legislative Assembly by election in 1997. Ever since, left-wing parties (first the Party of the Democratic Revolution and later the National Regeneration Movement) have controlled both of them. The city has several progressive policies, such as abortion on demand, a limited form of euthanasia, no-fault divorce, and same-sex marriage.

On 29 January 2016, it ceased to be the Federal District (Spanish: Distrito Federal or D.F.) and is now officially known as Ciudad de México (or CDMX), with a greater degree of autonomy. A clause in the Constitution of Mexico, however, prevents it from becoming a state within the Mexican federation, as it is the seat of power in the country, unless the capital of the country were to be relocated elsewhere.

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The financial stability of Mexico City has translated into a real estate market that rewards forward planning and a willingness to look beyond areas of traditional affluence.

Buy to Rent in Mexico City

Renting out your Mexico City buy-to-rent investment property can grow wealth and income.

Whatever your goals with investment property in Mexico City are – preparation is key.

Set goals based on how much rental yield will be required and the local rental yield rates in Mexico City and be prepared to change your initial outlook.
Thoroughly research the Mexico City location with a special emphasis on fringe areas outside the main Mexico City metropolis that may be valued lower than their better-known neighbors. Rental yields of around 5% are still attainable in certain areas of Mexico City.
Ensure that your target investment property in Mexico City appeals to professionals. This is a demographic that ensures maximum income and low voids.
Finding and vetting suitable tenants is a job ideally left to the professionals. Working with an established letting agent such as Physis Realty with local knowledge and experience of property legislation will give you the best chance of success.
You may think that managing your Mexico City properties yourself is an easy option, but are these savings justifiable when you run into Mexico City red tape? Physis Realty Mexico City office in downtown provides you with peace-of-mind and leaves you time to plan your next move in the growing Mexico City buy-to-rent sector.

With our expert guidance, investing in Mexico City provides the secure knowledge that your money is working harder than it would in a local Mexico City bank and that future generations of your family will be left with substantial capital growth assets.

We are always happy to advise on buying investment property in Mexico City, where we have been established for over 35+ years. Physis Realty has been a firm fixture in the Mexico City property market through good times and bad. Our experts have seen it all and our portfolios continue to outperform.

Flipping Investment Property in Mexico City

Flipping property in Mexico City

Flipping property is when we advise clients to buy a Mexico City property below market value, renovate it and then make a profit by selling it at a higher price, all within a few months, and often before the Mexico City market has a time to react to the renovation.

The Flipping Strategy in Mexico City

Investment property flipping in Mexico City is a simple strategy. You find a property that is in need of renovation from our list and purchase it for a low price. These type of Mexico City real estate investments are sometimes referred to by professionals as ‘distressed’ Mexico City real estate.

What is distressed Mexico City property:

Mexico City property in need of renovation
Mexico City real estate with a change of purpose and use
Oversold Mexico City property
Bank repossessions in Mexico City

Put simply, long term investors in Mexico City purchase the property, renovate it and make it a lot more attractive to potential buyers.

Calculate profit that you make from Mexico City investment property flipping:

Final Selling Price less Cost of Purchase less Costs = Profit

Here is an example:

Mexico City property purchase price: $220,000

Renovation costs: $20,000

Other costs: $25,000

Property sale price: $400,000

Profit: $135,000

Experienced property developers in Mexico City use a minimum profit value of 22% when looking at potential Mexico City projects. The reason for this is because there are lots that can go wrong in Mexico City property flipping and working on a potential margin of 22% should still leave a good margin of error.

Luxury Property in Mexico City

For luxury property investors hoping to add a superb property in Mexico City to their luxury real estate investment portfolio, Physis Realty is a trusted partner.

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A world leader in luxury real estate with a portfolio comprising some of the most sought-after real estate in Mexico City, Physis Realty caters particularly to high net-worth individuals and families. A luxury real estate investment in Mexico City should be entrusted to only the highest-quality agency.

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