5 Key Points to guarantee a good investment in land in Yucatan
By: Alejandra Rosete Rdz.
Reading Time: 5 min.
Yucatan Investment Destination
Yucatán, the state everyone is talking about, considered one of the safest in Mexico, stands out for its economic growth thanks to public and private investment and the development of new industries.
These characteristics, plus the natural beauty, the warmth of its people, the cultural diversity and the proximity to the beach, make it a hotspot for real estate development, and especially for its capital,Merida.
Point No. 1 Have Clear Objectives
What motivates you to make an investment?
If your motivation is to shield your economy against any eventuality, diversify your investment portfolio, create a lifestyle that allows you to spend more time with your family, have a peaceful old age, achieve your financial freedom, travel, live in the dream place, etc., whatever your purpose, the obligatory question that you should ask yourself is:
Will the Investment I plan to make give me what I want to achieve in the time I have planned?
Having your goals clear goes hand in hand with your investor profile. According to Grupo Bursátil Mexicano (GBM) you can define what type of investor you are based on two variables:
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VARIABLE 1 RISK AVERSION. It refers to how much risk you are willing to take.
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VARIABLE 2 INVESTMENT HORIZON. It is the time that you will let your money work. It can be short, medium or long term.
Usually an investor withconservative profile he seeks low-risk investments that generate profitability in the medium or long term and that can be achieved by investing in land.
It is important to clarify thatTHERE IS NO INVESTMENT WITHOUT RISK, the key is to minimize it. Investing in land in Yucatan is an excellent option since it is a limited resource, the raw material for any real estate business, and as more people arrive in the area to live, invest, vacation, or do business, a supply and demand effect will be generated. and practically extraordinary situations would have to arise that did not favor your investment. In addition, an investment in land protects your money against inflation, increases its value over time time and gives better returns than a bank.
Point No. 2 Define your Focus
If you have made the decision to put your money to work investing in land, it is necessary that you define the approach that you will give to your investment.
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CAPITAL ACQUISITION. Its purpose is theheritage creation that you can sell, transfer, contribute, keep, inherit, build to live in the dream place, etc.
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CREATING CASH FLOW. Its purpose is to receive money every certain period of time, derived from the construction of houses, apartments or commercial premises to rent them.
Situations can always arise that change the focus of your investment, however, it is important to start with an end in mind.
Point No. 3 Analysis of the MACRO to the MICRO
YUCATAN is a state that is at the forefront andis currently in a process of change, as it happened with:
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Monterey 30 years ago
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Guadalajara 28 years ago
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Puebla 16 years ago
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Queretaro 12 years ago
It is the state with the highest economic growth nationwide, with 3.6%(1), the increase in foreign investment has been 59.7%(2) and the sectors that have grown in investment are the automotive, aerospace, medical, textile, industrial, real estate, tourism and manufacturing sectors(3).
SOURCES:
(1) www.yucatan.com.mx/merida/indicios-de-crecimiento
(2) Secretary of Economy
(3) INEGI 2019
It is an attractive destination and tops the list of states with the best quality of life. Your real estate market is growing exponentially. Today you can find a wide variety of developments that are marketed under a PRESALE, which offer great added value and high performance. Hence the importance of making aMICRO Analysis of the investment you plan to make.
In the previous image you can see a representation of the area with the highest growth and real estate capital gains north of the state capital, it is known as the diamond zone and what returns This area, the ideal place to invest, is that it satisfies the needs of daily life and common interest such as:the environment, the services, accessibility and communication routes, development plans for the area, as well as the proximity to the sea. These factors influence the acceleration with which surplus value and high returns are generated.
It is important to clarify that there are also good places to invest outside the diamond zone, either near magical towns, haciendas, cenotes, along the Emerald Coast, in industrial zones, etc.
Much of the supply of land as an investment instrument is being marketed at the stage of PRESALE, This means that the project is not yet built or finished for delivery, however, the benefit you get in exchange is that the price per m2 is very accessible. Once the development is ready for delivery, then the stage of SALE, and it is when you begin to enjoy the profits that derive from the surplus value. If you take advantage of the pre-sale stage to invest, then you can "buy low today and sell high tomorrow".
It should be noted that there are different types of land in which you can invest and we will basically group them into four categories:
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Investment or rustic lots
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semi urbanized lots
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residential lots
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progressive growth lots
The main difference between them is the price per m2 and this difference lies in the way they are delivered and their location.
Investment or rustic land is delivered without basic services (electricity, water and garbage collection service). It is a type of investmentVERY LONG TERM because most of them are located far from populated areas and do not have access roads, so you have to wait for the urban sprawl to arrive and for the municipality to provide the services (in case they are municipalized), or failing that , each owner would have to take charge of getting the services to their land, which can be very expensive.
The Semi Urbanized land can be delivered with white streets (stone path compacted by a leveling machine), with some services such as electricity at the foot of the development or at the foot of the lot and in some cases with delimitation with markers and amenities such as theme parks and green areas. .
In the category of residential land are those that are delivered with services at the foot of the lot, paved streets, access roads, public lighting, sidewalks, boundary markers, amenities, clubhouses, access control, security and even with commercial anchors. that promote economic development within the project. A piece of land within this category is practically delivered ready to build.
Lastly, the lands of progressive growth are those that you acquire without services, but that over time, in its different phases, the developer commits to integrate improvements such as water services, electricity, paving, sidewalks, etc. This classification of land can reach the category of residential land.
Point No. 4 Legal Certainty
To getLEGAL CERTAINTY (the assurance that when you finish paying for your land, you will be able to deed the property before a notary without any legal complications) it is necessary that you request the following information from your advisor:
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Private property deeds. (Land acquisition contract).
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Identity documents of the company that sells the land.
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Promise of purchase agreement.
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The division office (that the land you want to buy is already subdivided). This document guarantees that upon delivery of your land there will be no changes in the m2 surface or in the location. Another advantage of having the division document is that it can be notarized immediately.
You can also go to the INSEJUPY portal (Instituto de Seguridad Jurídica Patrimonial de Yucatán) and make a free legal consultation through the internet to verify the legal status of the property you want to buy. Check that it is registered and free of liens so that your purchase is safe, legal and reliable.Ask your adviser for the electronic folio or planking number of the lot you want to buy and make the query by givingclick here.
Other information that will also give you peace of mind that you are making a safe purchase is:
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The trajectory that the land trading company has in the real estate sector
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How many projects have you delivered?
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where are your offices
Point No. 5 Orientation
The best orientation that your land can have is north-south (that the main façade is oriented to the north). This orientation helps you live in a cooler place since the path of the sun does not affect as much and at the same time it can make a home more efficient, allowing savings of up to 70% in air conditioning and artificial lighting costs.
BONUS TIPS
CONCLUSION
Whether an investment in land is safe or not will depend on the prior analysis you make to the purchase taking into account the above points. Once this is done, the time factor will be the key to obtaining the performance that you set yourself as a goal.
Today is the ideal time to invest in one of the safest cities in America and the most peaceful in the country, a City that ranks first in legal certainty in Mexico according to The World Justice Project, with great economic growth as a result of the investment that is being injected and that also gives you a high quality of life.
OKto approach that you give to your investment (capital acquisition or cash flow creation), it is important that you know inwhat kind of regiment is found, this will indicate what you can build or not when you buy a property and thus avoid any type of problem later.
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LAND USE. This document defines the activities allowed on a property (residential, commercial, mixed...). Each local authority dictates such use taking into account both the physical conditions of the land (topography, geology, slopes, location, etc.) and its use value. Based on this determination, it seeks to establish norms and an adequate and safe urban design.
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REGULATION. In this document you will find limitations or restctions regarding the architectural project, facades, guarantees, maintenance fee, etc. In addition, the land occupation percentage (COS = Occupation Coefficient) and the maximum amount of m2 that can be built (CUS = Utilization Coefficient) will be indicated. Example: If the land has an area of 300 m2 and the COS = .5 it means that 50% of the land can be occupied for construction (150 m2) and if the CUS = 1.5 it means that the maximum amount of m2 you can build is equal to 450 m2 (300m2 x 1.5) respecting the occupancy coefficient (150 m2) which results in the number of floors or levels that your construction can have.
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AMENITIES. That are up to your needs and meet your expectations.
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WRITING PROCESS.Take into account that at the beginning of this year, a change to the General Finance Law of the State of Yucatan came into force, which establishes that at the time of notarizing, a commercial appraisal must be made to determine the current value of the land you acquired . Subsequently, a single payment must be made to the notary, which includes, among other concepts, the property acquisition tax. The percentage of this tax will be determined according to the municipality in which your land is located.
Would you like to know which is the IDEAL investment in land for you, according to your personality?
Today, looking for land in Yucatan can be a overwhelming experience because of the great offer that exists. But if you want to focus only on those whomeet your expectations according to your personality, click onsee more and find out how to achieve it.
ALEJANDRA ROSETE DIGITAL PURCHASE FACILITATOR
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