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Vallarta HOAs and What you Should Know

Most real estate searching undertaken by people interested in having a primary or second home in Puerto Vallarta (or Nayarit), tends to center around the size of the home, number of bedrooms, the neighborhood, and of course, the price. When something is finally found that fulfills the criteria, few, unfortunately, bother to include an investigation regarding how the homeowner’s association (HOA) functions. But they should.

They don’t because many people are not familiar with what a HOA is and what its responsibilities may entail. The single-family dwelling is still the most common form of homeownership in the U.S. and Canada, where HOAs are not, in most cases, necessary. But in Vallarta the condo is king and the preferred form of secondary home or vacation ownership.

Why? They are easy to take care of, to lock-up and leave during the summers, maintenance fees are less, matter fact the overall cost is usually much less. But the other side of condo living is you are now sharing your home, or at least your common areas and perhaps a wall, floor and/or ceiling, with others. There needs to be a system in place to ensure common areas are well maintained and paid for, that everyone respects the rules in place and the privacy of the other owners. The mechanism for this is the homeowner’s association.

Before anyone makes an offer on a property it very much would be worth their while to investigate the HOA, to ensure the condominium project is being run efficiently, properly, and in compliance with state condo laws. If there are problems, it’s better to find out beforehand rather than later on. Unfortunately, the information isn’t always easy to come by. The listing real estate agent can assist with this by organizing a meeting with the property manager or administrator, and perhaps one of the board members may be available to talk to you.

Perhaps I should have prefaced this by saying there are always going to be some problems going on within the HOA – it is the nature of the beast. So don’t go looking for a perfect scenario. What you mostly want to do is confirm ahead of time what you are getting involved with and then decide if you’re okay with it.

Here’s some sample questions you could consider asking:

Is there a good administrative system in place? Is there a manager or administration company you can talk to about the building?
You should ask to see a copy of the property by-laws (regimen de condominios) to better understand what the rules are for owners.
Is there a board and do they meet regularly, taking minutes of the meetings?
How are common expenses billed and charged?
Is the electricity billed separately for each unit?
How are fees billed (annually, quarterly, monthly), and is everyone paying their fees regularly?
Are there any problems/disagreements or even legal issues internally or with the past developer?

You can get a pretty good idea of how well the HOA is being managed by just walking around the property and checking how well everything is being maintained. Poor maintenance and condition of the building probably means poor management and a weak board and HOA.

Garry Musgrave has written a couple of books about condominium HOAs in Jalisco and about condominium law, and he writes, “Much of the problem comes from unsubstantiated opinions or maintaining of the status quo. Often, people having experience with a condo in Canada or the U.S. will try to apply this to a Mexican condo — unfortunately, they don’t operate the same way! Some early condos made mistakes when they were set-up, and these have been continued by new condos copying them! Eventually, poor (and often, illegal) practices became the standards on which new condominium administrations are based. The real problem is that detailed and accurate information has not been available to you.”

Garry has written book about condominium HOAs you can purchase on Amazon.com. It makes a very good guide for anyone involved with HOAs, and set you in the right direction for properly setting up your condo regimen.

And what if you have already bought and now discover there are problems with your HOA? Well, remember, as I wrote above, there will always be some problems, what’s important is the severity of the problems. First, you should educate yourself about what best policies are for the operation of a HOA. Ask questions, both to the administrator and board, but perhaps other people at other developments who have ample experience in the operation of HOAs.

Secondly, consider getting involved yourself by serving on the board. The worst guy at the annual general assembly is usually the one who loves to complain but then never bothers to help out by serving on the board. It’s my opinion that if you haven’t served, you really don’t deserve to complain much. If you want something to be done, then perhaps you have to do it yourself by getting involved.

Other points to keep in mind:

If you have a weak administrator, you need to have a strong board. But that will mean board members putting in a lot more time than they may want to, or should. It can also lead to board members having too much control. Prime candidates for this are successful retired corporate types who are used to running their own company, but don’t have the company anymore. So they take over the HOA!
If you have a strong administrator you’ll have to pay more, but it will make the job of the board much easier. In my opinion this is how it should be done, with the board just providing direction and oversight. Unfortunately, for small projects, this often is challenging.
Checks and balances. You have to have systems in place to ensure that the administrator, management and board are doing their jobs properly. The administrator and accountant shouldn’t work for the same firm – as they need to audit one another.
Do all you can to avoid lawsuits. Usually the only one’s to win are the lawyers. People can get very hot-headed, for some reason, when it comes to HOAs. It’s a little like road-rage, but now inside the condominium structure. Owners have to understand that they have no choice, they are neighbors and are stuck living near and with one another. So the nicer you can be to each other, the higher the degree of success and compliance you’ll have regarding HOA matters.
A poorly run HOA can take away from the pleasure of owning, put some owners against others. Your best best is to get a great administrator who can keep people in line and ensure that day-to-day operations are done correctly.

Buying “Pre-Sale” Properties in Vallarta

“Pre-sale” purchases

A “pre-sale” purchase exists when a buyer enters into an agreement with a developer to purchase a unit that has not yet been built or finished. This type of purchase is inherently risky. In Mexico over the last 10 years the real estate market has seen a major boom, especially in developed or developing coastal areas. Between 1995 and 2005 prices skyrocketed and fueled an increased number of new projects, the majority of which were sold as “pre-sales”. The first of these projects brought great returns to the buyers, who often times purchased at a 30% discount off the finished sales price. Furthermore, many of these projects went up in value 20 or 30% per year prior to being delivered, which made the investment even more profitable.

When the real estate boom started many investors thought long and hard about the terms of the pre-sale agreement before signing. Many did not sign these agreements as they presented too much risk and were too favorable to the developer. In short there was no guarantee a developer would finish a project or return the buyers’ funds if they could not deliver.

However, as the boom gained speed, people were more willing to accept a less protective agreement in order to secure deals and get in on the “great investment opportunity”. As the real estate boom continued, fewer and fewer people were concerned about the terms of the agreements they were signing and more were concerned with signing quickly so they would not lose the unit to another buyer.

The recent downturn in the world economy and the roller coaster stock market have seriously changed the outlook of every single buyer I have spoken with who is currently holding a signed agreement with a pre-sale project that has not yet been delivered . Just about every buyer that I speak with today who has invested in a pre-sale project that is not finished is asking me “Is the developer going to finish the project?”, “Can I get my money back?” and “How can I protect myself if the project fails?” This article will go over where the pre-sale market is today, the risks of investing, and what you can do to limit those risks.

First and foremost, everyone must understand and have in mind that developers, more than anyone else, want to finish their projects and deliver the units. An unfinished, undelivered project means losses and no developer is in business to lose money. In most cases developers are the ones that have put up the initial millions of dollars in seed money to get the project going. Do “pre-sale” developers use your money to finance the projects? The answer is yes, they do use pre-sale money to finance or leverage their projects. However, everyone must also understand that in most cases they have put up hundreds of thousands of dollars, if not millions to get the project going.

This article will look at:

The general types of “pre-sale” projects that exist
What you should negotiate for
What happens if the developer disappears and no one is on the project

Types of “Pre-sale” Projects

There are principally two types of “pre-sale” projects. Please understand that there are many variations of the two principal types, but they all seem to fall into one of the two following classes:

Class One: Financed Pre-Sale Projects

These projects are financed by banks or private equity groups who fund the project “based on sales projections being met”. As a very general example, a developer will put up 20% of the initial funds to get the project moving, then as certain numbers of sales are made, the bank or private equity group will release funds to the project to move it forward. Based on an “absorption rate” (in general a speculative number of sales per month or quarter), the lender will release more funds to advance the project along. Obviously the “first round” of financing is usually the most difficult to get as the bank wants to see a “healthy” absorption of the product into the market. If they can see that 30% of total sales are reached, they are usually willing to release that really important first round of financing to get the project off the ground.

If you pick up a real estate magazine from a year ago you will see several advertised projects that no longer exist. Why? Because they did not get enough “absorption sales” to kick off their first round of financing.

Most of these Financed Pre-Sale Projects are the bigger, more well-known outfits. These outfits are usually better prepared to deal with problems in the market, but they are not completely immune to sharp downturns in the number of sales. So where do the risks lie in these projects? Principally they lie in the developer making initial sales projections to get first round of financing approved but then not making further benchmark “absorption sales” to get the second and third round of financing. Recently some developments are experiencing very low sales numbers and what is worse, they are having clients default on existing agreements, lowering their number of sales to below the minimum required for financing to be in place. If this happens the developers usually opt to do all or some of the following:

Ask for advanced or final payments. Most pre-sale agreements are very one-sided in favor of the developer and contain language that allows the developer to ask for final payment before delivering the product.
Slow the construction down to the bare minimum. This is to cut costs until cash flow increases or sales number are met, triggering the next round of financing.
Extend financing terms and sometimes pass them on to the buyers.
All of these options mean that you are going to be asked to pay more for your unit or it is going to be delivered later. The developer is looking at the economics of the project. You also need to be looking at this.

If you have invested in this type of pre-sale project and see the developer slowing down on construction or proposing any of the options above, you need to move as quickly as possible to renegotiate or force a settlement on your agreement. The first people to negotiate or force a deal will usually get a better deal than those who wait.

Class Two: Non-Financed “Pre-sale” Projects

These are the projects that do not have any type of formal financing and are speculating on making enough sales to generate cash flow for construction costs. These are usually smaller projects.

Needless to say, these types of project are higher risk projects because when the sales stop, so does the project. If the sales stop for any length of time, these projects are more susceptible to legal action and to having the developer “disappear”. Once the developer disappears, everyone loses.

Furthermore since a financial institution or bank is not involved, there is usually no “contingency” or risk plan established in case the project fails. When a bank loans money to a project, they almost always include provisions to take over the project in the case of failure as well as a plan to inject the necessary capital to finalize the project. Smaller, self financed projects do not have these contingency plans.

In these smaller types of “Pre-sale” projects, if sales are not met usually one of two things happens:

Construction comes to a virtual halt. Maybe a handful of workers are kept on to maintain the appearance of progress, but for all intents and purposes the project is stopped.
The developer asks for advance payment or increases the price of the units.
Smaller projects are more susceptible to going under. It is extremely important to be aware of this and, if any of the warning signs mentioned above appear, to take immediate action to protect your investment. Action, in this case, would mean getting a written and notarized agreement from the developer as well as full disclosure on the finances of the project. Legal action may also be needed. Verbal agreements or promises mean absolutely nothing unless the person making them is willing to sign off on them.

What should you negotiate for?

If you can, you need to turn the emotions completely off and the math skills on. There is a whole range of questions that need to be answered in order to find the mathematical and economic solution that is best for you. Some of the general questions we go over with our clients are:

What is the developer offering? Any offer the developer is giving is a starting point. You need to build your arguments around this starting point.
What percentage of the total price have you paid? This is the liability of the developer as well as your exposure.
What are you willing to lose? This is a hard question but you have to understand that if you are not flexible, your ability to reach a negotiated resolution is not good, and litigation is expensive.
What legal options do you have and what are they going to cost? There are legal options besides litigation which can force a developer to come to a more reasonable solution. All of these options need to be explored.

How much more would you be willing to pay to have a finished unit vs. litigation?

Is there a group that has a professional common representative? The developer wants to resolve as many problems as he can. Groups of buyers will get priority attention over individual owners.
We must understand that a developer is in an economic bind if he is slowing down or stopping the project. His options are limited and he will do whatever he needs to in order to make the project not fail and avoid a lawsuit. The developer is not your friend nor is he your enemy. You are both investors in a project that is in trouble due to a world economic crisis. Finding or forcing a solution is better for both parties so you need to work with the developer or force him to work with you.

What if the developer is gone and no one is on the project?

This is the worst case scenario, and you need to do some immediate research on what happened too see if there are any groups working to negotiate, find the developer, or file action against the developer. Do not walk away from your investment. Even if you only recuperate 30% of what you invested, it is better than walking away and allowing someone else to take all of your investment. Get good advice, talk to other people in the development, review your options, and get moving to protect your investment.

David Connell is a licensed Mexican attorney with an office in Puerto Vallarta. If you have any questions about this process, you can contact his office at: www.mexicolaw.com.mx.

In Search of the Elusive “Perfect” Vallarta Condominium

During our nearly many years in Vallarta, we have lived mostly in condominiums, situated in different Vallarta communities, and Riviera Nayarit neighborhoods around the bay. Each has been unique, offering advantages and disadvantages concerning location, layout, price, and numerous other things that should be taken into consideration before moving into or purchasing a condominium. It’s become somewhat of a game for us whenever we are looking for a new home, a search to find the perfect condominium. So many variables come into play when attempting to find a condo that will fit into your and your family’s lifestyle. You have to take into consideration work proximity (if you do indeed work), children and their ages (if any), and what it is you and your family most enjoy doing.

With regard to location, it’s sometimes nice to be outside of the downtown area where traffic and city noises are not a problem; however, you may find you have to do much more driving to go to a restaurant, attend an event or drive the kids to school. There’s nothing quite like living downtown where you can walk to nearly everything, but then there are still roosters crowing at 6 am and the hustle and bustle of people, cars and buses.

One couple we know retired outside of Vallarta in a wonderful home they built themselves on the beach in the jungle. They were quite happy out there for the first few years, but then they began to miss people! At first they enjoyed the solitude and privacy; however, after a while they missed the restaurant scene, seeing their friends regularly, the art walks, and ended up selling their home and building one above Gringo Gulch. Now they can walk into town to frequent their favorite restaurants and socialize. So, that adds another dimension to this search: what may be the perfect condo for you today may not be in five or 10 years!

So, you need to consider not just what your wants and needs are today, but what they will be down the line. As we get older, the four flights of stairs and no elevator may no longer be seen as a handy, built-in workout circuit. And I doubt the realtor, when you’re ready to sell, will see it that way either. We get married, have children, the children grow up and leave home —time can play havoc when searching for the perfect condominium. Our needs constantly need to be reevaluated.

Then there’s the size of the condominium. If it is just for a single person or a couple, a one-bedroom may do. Sometime, however, it’s nice to have a second room for company or an office or even a separate media room, which has become increasingly popular instead of using the living room for watching television. Storage always seems to be a problem with condominiums, although some of the newer projects now address that by offering secure storage space outside the condominium. And you can never have enough closet space! The extra room is nice, but the price increases, as does the chance of relatives showing up to visit. It’s sure nice when they do, but sometimes nicer when they leave!

And what about the size of the condominium project? If it’s a small development, you have only a few neighbors, so noise should be minimal; however, that also means there are fewer owners to share the homeowners association’s expenses, so monthly maintenance fees may be high. It also means fewer services and amenities than you’d find at a larger project. You can forget about a gym, spa, tennis courts and concierge service, but the alternative is probably living in a high rise with many other people, which isn’t as personal and private and perhaps will be noisier.

Parking is something you need to take into consideration. Having covered parking is nice, but also expensive. And if you can have an extra space for a second vehicle, boat or such, that’s even better. And are the parking stalls wide enough? We once had a condominium that came with a parking space, but when both of our neighbors were home the only way we could get into our SUV was through the back or the sunroof!

Today, having a swimming pool is usually part of the package, and you may want to consider its orientation. If it doesn’t get much sun, it may be cold in the winter (unless it’s heated, but then the heating bill starts adding up). Of course, that can be a plus, as not many people will be using it, meaning you’ll have it for yourself! If it does get plenty of sun, you may find that it stays too warm in the summer months, when you really do want to cool off. Jacuzzis can be nice, but they also need a good maintenance program. Even if they are not used regularly, the cost of operation can be significant. In one project, they just kept it empty because of the cost, which looked terrible. In another, they had it running all the time and always without any cover.

If the terrace faces south, you’ll have plenty of sunlight —perhaps even too much if you don’t have a decent overhang to block some of it, especially during the summer. Facing west offers wonderful sunsets but no sunrises. If you face east, you get the opposite: sunrises but no sunsets. Facing north means you won’t get enough sun on your terrace, but then that may be just what you want —great for the summers, but perhaps a little cool in the winter.

And what is it you’d like for a view? Beach and ocean views are nice, but they tend to cost more than the others. Golf courses are great backyards, as they are usually quiet and you have a huge lawn that someone else cuts for you. Hillside homes are wonderful, as they can offer spectacular views of the bay and are usually a few degrees cooler all year round, but they can be difficult to get to and there may not be many services and amenities nearby.

If you like playing golf, you probably will want to be in either Marina Vallarta, Nuevo Vallarta or Punta Mita. If you are a boater La Cruz or Marina Vallarta may work best. Having a condominium or a townhouse with a boat slip out your back door sure makes boating easier. But being near water or on a golf course can mean that bugs may be a problem, and if you are close to the ocean the salt air can affect your metalwork and appliances!

Living in a high rise will probably offer spectacular views, but then you need to take an elevator to get to your home everyday. Some developments will allow you to have a pet, but that means every other owner can also have a pet, and theirs may not be as well behaved as yours.

There are a lucky few who have gotten around some of these obstacles by having two homes in Vallarta: one on the beach outside of Vallarta, where prices aren’t as expensive and it’s less crowded, and another downtown, where they can drive in and spend a few days enjoying the restaurants, shopping and such. But that’s only available for the few who can afford it. And with that comes twice as much maintenance work and double the costs. You have two wonderful places but you are always working on maintaining them.

And so, we’ve come to realize over the years that there really is no perfect condominium. Each individual, couple, or family needs to consider what their wants and needs are, both today and in the future, and base their buying decisions on that. Some condos will fulfill their needs better than others, but then those others may be just right for someone else. We are fortunate that Puerto Vallarta has plenty of locations, sizes, and price ranges to choose from. So, although you may not be able to find the perfect one, you certainly should be able to find something pretty close!

Vallarta Property Rentals & Taxes

Many people who decide to buy real estate in the Costa Vallarta region do so with the intent to rent out their property when they are not using it. There are a number of options to do so, ranging from taking care of it yourself or having a rental company do so for you. Doing it on your own can be demanding, especially if you aren’t in town to ensure the property is ready for the rental, provide access to the people who will be renting, and take care of any repairs or maintenance that need to be done before or during a rental. Having a property-rental management company takes away a lot of the headaches as they can do this all for you. They can also assist with the proper filing of any revenues you may generate with the local tax authority (SAT).

Rental Income and Tax Reporting

When discussing rentals, it is important to understand the difference between the terms “rentals” and “lodging.” This is not always easy to do and often left open to interpretation. What’s important is “whose” interpretation.

Where we can find clarity is at either end of the spectrum: If a property is being rented long-term with an annual lease, this is clearly considered to be a “rental”. A hotel, on the other hand, can be clearly defined as being in the “lodging” business. As you start shortening the rental period, you begin moving closer towards what may be construed to as lodging. In between is a grey area, open to interpretation, depending who you may be talking to.

As the law stands, short-term rentals, (less than a year), are considered to fall under the jurisdiction of lodging. What is most important, however, for those who are renting, or considering renting their property, is what the position or recent rulings of SAT have been with regards rental income. To date, SAT is primarily interested in knowing that you are registered and filing this income.

It is an important distinction to make for if short-term rentals were to be considered as lodging, and dealt with accordingly, then it would be necessary to have a city business license, pay a hospitality tax, register with the tourism department, be open to health and fire department inspections and fall under the jurisdiction of PROFECO (Mexico’s Consumer Protection Agency). But, as it stands now, for homes and condominiums these procedures are not currently being enforced.

However, whether a short-term rental or a long-term rental, if incomes are received in any way, they have to be reported. The important difference here is with regards to what other forms of taxes or reporting may be necessary if short-term rentals are deemed to be considered “lodging.”

Could this change in the future? Definitely. But for now, this is how they see the situation, so if you are registered and paying the taxes owed, chances are you are just fine. If they did change their position this would seriously affect the rental market as an individual homeowner would now have to follow the same practices and procedures as the 200-room hotel down the street.

If you are going to rent and receive income for it, you should report it. It is no different here than it is back in Canada or the U.S. if you were also renting your property. Any taxes you do pay, however, can usually be applied against your tax return back home. Some owners of property in Vallarta believe that if the transaction and the payments for the rental take place in their country of origin, they are fine just filing in that country. That isn’t enough. As the income in generated from a property in Mexico, one needs to report in Mexico as well.

In the past, not reporting income earned was rather common, and it simplified the rental transaction considerably. But today this is not recommended practice. SAT, (the equivalent of the IRS in the U.S. and Revenue Canada), has come a long ways over the past few years, and any Mexican business owner will certainly attest to that. It may have been different in the past, but today, there is no way of avoiding not paying taxes. The last time I visited their offices to provide a digital signature, they also took my fingerprints and did an iris scan – they take tax collection seriously. Furthermore, the tax authorities in the U.S., Canada and Mexico are now working together more than ever, and openly sharing information. So if you are filing the income in the U.S but not in Mexico, they have access now to that information if they want it.

Not paying taxes due in Mexico is dealt with in the same way it is back home, with potential civil and criminal penalties. SAT can use its discretional powers to determine whether you are or not properly reporting income. They can use as a market indicator the occupancy of the hotels in your area (some times as high as 80%) and multiply this times your rate per night. And they can go back more than just the past year, they can go back five years. So, if you rent your property and are not registered with SAT, contact a certified public accountant or a professional property management company, to get registered and start filing and paying taxes. It is not worth losing having your property encumbered for a tax debt and having to pay an attorney to defend you.

Over the past few years SAT has become much easier to work with, if you choose to do this on your own. They have experienced people who are friendly and can walk you through the procedures necessary to become registered as a taxpayer. If you don’t speak Spanish, however, you’ll want someone with you to translate. You can make an appointment online, and find out which documents you’ll be needing to present at sat.gov.mx.

Taxes must be filed monthly where a provisional tax payment of either a flat 25% of the income before IVA, without deductions, or up to 35% on the net income, along with a 16% IVA. (IVA is a “value added tax”, a VAT). When you rent, you should add this 16% onto the cost of the rental – it goes on practically everything.

Most people from the U.S. or Canada will have their property held in a residential trust (fideicomiso). Nearly all trusts allow owners to rent their properties out, but you should check yours just to make sure. You have nearly all the rights of someone who owns a property fee simple, the trust is just a legal requirement for foreigners to hold property rights along the coast and along the border.

Rental Property Managers

There are a number of companies in Puerto Vallarta that can help you with managing your property, as well as your rentals. They’ll ensure the property is ready for the rental, do collections, assist with tax payments, take care of repairs and maintenance and provide you with regular reporting. Providing this service is a range from individuals to high-end, full-service companies and then everything in between. Some prefer just to manage properties while others offer rental marketing services as well. Make sure you have someone you have full confidence taking care of your property. Ask for references and ask others who also are renting what their experiences have been. Also, many local real estate companies have a department that caters to rentals and property management for their clients. The cost for this service usually starts at 20% and goes up, depending on how much of the rental process and taking care of the property is handled by the property manager.

Some of these companies take care of just the property, meaning you could take care of the rentals yourself although you’d then also have to handle tax reporting as well. Today, with the Internet, rental marketing can be done quite easily as there are a number of rental websites such as VRBO.com and airbnb.com. However, most Vallarta rental and real estate companies also have their own online, well established, database of rental properties.

Before renting make sure that renting your property is not going to be a problem with the manager of your building and your homeowner’s association – some frown upon this and may not make it easy for you. But then there are others that are well set up to do exactly that, making it easy for people to rent their properties.

In conclusion, if you are going to rent, don’t take any unnecessary risk. Register yourself with SAT, report your rental income and pay the taxes due.

Written by John Youden of MLSVallarta.com in collaboration with David Connell of Connell & Associados. David is a licensed Mexican lawyer, specialising in real estate law, with an office in Puerto Vallarta.

Vallarta’s Real Estate Market: A Ten-Year Perspective

It has now been ten years since the dramatic economic downturn of 2007, which dramatically affected real estate prices and values throughout the USA, but also in other parts of the world, including Mexico. But where the results were more immediate in the U.S., it took awhile for Puerto Vallarta to fully realize to what extent its market had been impacted.

At MLSVallarta, we thought it would be interesting to revisit our information regarding 2007 and compare it to how the market is today, how it’s recovered and then has begun to heat up again. Is it near 2007? That’s what we’ll be looking at.

It has always been difficult to obtain good statistical information on the local real estate market. Back then we relied on what was reported in the MLS system. But we also would survey, annually, the developments to procure what their inventory and pricing was, and what sales they had secured. This gave us enough data to work with to get a pretty good understanding of what was happening in the market. Today, MLS results are even more accurate, although there still is a lack good data coming from some developments that are not part or affiliated with a MLS system.

Up until and including 2007, Puerto Vallarta and Riviera Nayarit’s real estate market was in a buying frenzy. Realtors were working long days, developers couldn’t build fast enough, and no price seemed to be too high for motivated buyers, primarily Americans.

The market of 2007 and leading up to it were dominated by the products being offered by developers. Re-sales lagged primarily because buyers wanted new, more, bigger and better. Gross sales in 2007 were somewhere between $550-$700 million with about 75% of that produced by developers.

Today’s market, according to the MLS, shows $270 million for 2017, however that doesn’t not include all development projects. But even then, this number (number of developments today), is small, especially when compared to ten years ago. There are currently about 60 projects under development and a good portion of them are in the MLS system. In 2007 we counted more than twice as many developments and most weren’t in the MLS. In short, the market was probably double the size in gross sales in 2007 when compared to last year’s results.

It was a crazy market back then. At the time we were publishing Vallarta Lifestyles, an over-size luxury publication called Costa Vallarta and the Vallarta Real Estate Guide. Lifestyles reached 300 pages, Costa Vallarta was regularly close to 200 and the Real Estate Guide was over 100 pages, so thick the printer was having a difficult time stapling the publication and suggested we create two publications out of it. Today, Lifestyles and the Guide have half as many pages, and Costa Vallarta no longer exists. This isn’t taking anything away from the publications today as they are quite successful. It’s more a bellwether of the market back then, and where it’s at today.

The average “listing” price for a condominium was $600,000 in 2007. Compare that to today where the average “sales” price is less than half of that. There were more than 120 projects in varying stages of development around the bay back then, with 15 of them offering condominiums with starting prices above $1 million.

In 2007, the average buyer’s budget was close to $500,000 USD, driven first by those who could afford more and, secondly, by increasing prices. Today realtors report that up until recently the typical buyer’s budget was around $250,000 – half that of 2007.

They have reported, however, upward movement on this as we’ve moved into 2018. Some buyers are, once again, looking and willing to spend in the $600,000-$800,00 range. But the most common buyer’s price point is still quite below what it was in 2007.

In 2007 buyers were looking for condominiums that were stylish, luxurious and spacious. The first condo sale over $1 million took place and it was like when the four-minute mile was broken – more then began doing it. Million-dollar priced condos were common with the $2 million sale price barrier broken as well for a condominium that year. Three-bedroom condos with 3,000-6,000 f2 were being built, and sold. A project in Conchas Chinas, which involved demolishing an older oceanfront home and building six condominiums, saw the first initial sales go for $1.5 and $2.5 million USD.

New condos were still available for as low as $300,000, but this was becoming increasingly rare. With so many new developments there were never so many options and choices available. It became very competitive, with each developer needing an edge over the competition or they weren’t going to sell, or at least not as quickly as they would like. Developers were offering extended short-term financing and special property amenities such as gyms and spas, clubhouses, even a new vehicle with the purchase of a home or condo.

Not today, or at least not up until now. People are looking for smaller, more practical units with less amenities, as these just drive up the price and HOA costs for common areas. Buyers are willing to give up views, once quite essential, to get something that fits their budget. One realtor, who lived through (and survived) 2007, told us that just it’s just been this past season that he’s once again begun showing million-dollar condos, a first in many years.

Today developers try to keep costs down by limiting extravagances in the units themselves and instead invest more in the common areas. We can especially see this in the downtown market. The new cool trend a few years ago was a roof-top pool. Today that is a standard feature for most new projects. Developers now try to out-do one another with inset seating in rooftop pools, bars, gyms, massage rooms, etc. As the market has heated up, though, developers are being forced to be more creative. A few years ago units were rather standard, lacking of amenities of 2007 as it was all about price points. That is changing as people have a little more to spend and there’s more competition.

What follows are some statistics that compare the two markets separated by a decade:

In 2007 the average sales price for a condominium was $400,000 and the average size was 192 m2. In 2017 the average sales price for a condominiums was $275,000 and the average size was 142 m2. Sales prices were 45% higher and units were 35% larger in 2007 compared to in 2017.
In 2007 the average sales price for a house was $723,000 and the average size was 318 m2 whereas in 2017 the average sales price for a house was $362,000 and the average size was 253 m2. Houses sold for double the price and units were 25% larger in 2007 when compared to 2017.
In 2007 the Hotel Zone and Marina Vallarta accounted for nearly 46% of the sales, and it was nearly all new product. In 2017 they accounted for just 15% of all sales (and most were re-sales). In 2007 the downtown area had a few developments, with sales led primarily by Molina de Agua, but that still only accounted for 5% of all sales. In 2017 this area, primarily the south side, accounted for nearly 30% of total market sales. On the South Shore sales doubled over 2007, but were down 65% for the North Shore. (Lack of reporting in MLS is partially responsible for this). Bucerias, La Cruz, Nuevo Vallarta and Flamingos came in with similar percentages over both years.
In 2007 there were 19 sales for homes and 8 sales for condominiums over US$1 million whereas in 2017 there were 10 sales for homes and 7 sales for condominiums over US$1 million (but four of these just made it with a sales price of exactly $1 million). In 2007 the highest sales price for a home was $4,455,000 and $2,730,000 for a condominium. while in 2017 the highest sales price for a home was $4,100,000 and $1,765,000 for a condominium.

During 2007 more than 50 new real estate projects came on line, totaling more than 120 in all, (compared to today where there are about 50-60), that added nearly 5,400 new properties to the market, or about 8,900 units in total. There were 1,032 reported sales, that left a balance going into 2008 of approximately 7,200 new development units. In other words, development inventory from one year to the next had doubled. Close to 2,000 of these units would not come to fruition as projects were cancelled. Even more came off the market as developers scaled back, or announced they would release only in stages. And there was concern that the market was now extremely over-built.

Of the 1,032 units sold in 2007 by non-MLS developers, nearly 10% of these deals would eventually not go through because buyers could not longer afford them. In 2008, developer sales dropped to just under 600 and by 2009 only 340 sales were reported, down 60% from the top in 2007.

By 2008 it was obvious to everyone that something seriously troubling was going on with the market. Inventory consisted primarily of new real estate with approximately $5 billion of it distributed amongst 5,400 units around the bay at varying stages of development.

Of the 138 developments we surveyed that year, 18 had had no sales, and those still on the market reported that:

42 were 25% sold out
45 were 25-50% sold out
18 were 51-75% sold out
15 were 76-99% sold out
10 were 100% sold out and off the market
75% still had at least 50% of their inventory unsold and there weren’t a lot of people looking at them.

By 2009, we were ready to stop asking for information. Developers were embarrassed to talk about it and we were embarrassed to ask. But we did. We surveyed 122 projects, of which 18 were off the market, (cancelled) leaving 104. Of these:

40 projects had inventory pricing start at under $300,000.
18 had pricing starting at over $1 million (Imagine that. Today, there is not a project around the bay, except in Punta Mita, that is that emboldened).
43 developments reported no sales whatsoever. One third of all projects had no sales all year long.
Only 7 reported double-digit numbers in sales.
I’d like to repeat that in case you missed it: in 2009, out of 122 projects surveyed, 43 reported no sales. The faucet had been turned off.

And so began a long, slow, recovery process from 2011 to 2016.

The market today is nowhere near the level of frenzy that encapsulated the market in 2007. Average condo prices are still down over 30% from the peak. But they were, in our opinion, over-inflated back then and are more realistic today to what people can afford.

Condominiums were 35% larger in 2007, but today’s average of 150 m2 offers a more realistic size that can very easily fulfill the needs of most condominium buyers. Builders are still building “affordable, more practical” units – rarely do you hear “luxury boutique” like you did in 2007. Buyers have gravitated back to the downtown core areas rather than outlaying regions, primarily for ease of socializing, access to restaurants and venues, lack of need for a car, and better security.

There doesn’t seem to be anything looming on the horizon that could change the current direction of the market (although, I also remember writing that in our 2006 Trends article).

There are some concerns, however, on the horizon. Mexico’s presidential elections will be held this year and a left-leading candidate is leading in the polls that has the business communities concerned. President Trump’s disregard for the value of Mexico as a neighbor and partner in economic trade & development and security, is also a concern. And, as always, security in Mexico, although Puerto Vallarta is currently referred to as one of the safest regions in the country.

In conclusion, there still seems to be some upside to this market, it is nowhere near the overbuilt levels of 2007, and prices are still quite a bit lower than the highs they once reached.

I’d like to thank Wayne Franklin at Tropicasa Realty, Carl Timothy at the Timothy Real Estate Group, Wally Lopez & Jonathon Smart at Riviera Partners Realty and Marc Sinanian at La Punta Realty, for their valuable feedback and information in generating this report.

Puerto Vallarta #1 Destination for Canadian 2nd Home Buyers

Point2Homes recently performed a survey to find out where Canadians want to purchase a second home. To do so they analyzed Google search results for 2017, using keywords regarding homes for sale abroad.

Mexico was the number one choice for Canadians who want to purchase a second property. They found that Mexico remained the top go-to place, based on a similar report they launched back in 2015.

Puerto Vallarta stood out as the most looked-up destination in the country, with 2,940 monthly Google searches – twice as many as the next popular destination. The second place was held by Playa del Carmen, the fastest growing real estate market in Latin America, accounting for 1,470 searches. Cabo San Lucas was the third choice on Canadians’ wish list (960 searches per month). The city of Mérida was the fourth (830 searches), famous for its rich Mayan and colonial architecture. The most expensive location in the country, Cancún, was in fifth place in the ranking with 800 searches.

Mexican Immigration Law Explained

In May of 2011 Mexico’s Immigration law was reformed. Some of the reform entered into effect immediately while other parts did not enter into effect until the corresponding Rules to the Law were published, which did not happen until the 28th of September 2012. In short, we are just now starting to see the Immigration authorities push for the full application of the new law.

Before getting into explaining Mexico’s immigration law visa policies, you may want to first ask yourself the question; “Do I really need one or can you just use the Visitor Visa?”. Unless there is a reason to go through the process of getting a Temporary or Permanent Visa, we recommend that you just use the Visitor Visa.

Mexico’s immigration law recognizes three manners in which foreigners can be legally in Mexico, these being:

Visitor

There are six types of visitors. Of the six, the tourist visa you get on the plane is a “Visitor” visa. These visas are limited to short terms stays (usually no more than 180 days) and are granted in the understanding that you are coming to “visit”.

Visitor’s permits are issued when you arrive in Mexico (by air, or travel inland by road beyond the ‘free border zone’) by completing a Forma Migratoria Multiple (FMM) at ports of entry. Upon its expiry you will need to leave the country.

Temporary Residents

This is for foreigners that want to remain in the country for a term of up to four years. Under this permit you can acquire the ability to work for pay (remuneration) and you have the right to “Family Unity”, (which will be explained further on). Under the old FM-2 and FM-3 you had to renew the visa each year and they were good for up to five years. Now if you have any FM-3 or FM-2 they will most likely turn it into a Temporary Resident Visa for the time that is left up to the four years allowed. If you go beyond that, you will be asked if you want a Permanent Resident permit. Note: There is also a Temporary Resident permit for students that allows the person to remain for the time it takes them to finish their studies.

Permanent Resident

This is a visa granted for an indefinite term. This is very similar to the old “immigrant” status. The following people can solicit a Permanent Resident permit: Family members of Mexicans or other Permanent Residents under the “Family Unity” dispositions—see further on.

A retired person, with sufficient income to “live in the country”. Right now they want you to show a monthly account balance of $1,619,000 pesos (25,000 times minimum wage). Note: there is no obligation here for you first to have the Temporary Resident permit for 4 years.
Because you have had the Temporary Residence for four years.
For having children of Mexican nationality by birth.
For being family of Mexican nationals by birth, up to the second grade or tier.

Family Unity

This is a new concept that was not in the previous law. It is based on the international treaties that look to preserve the family as a unit. Under this new law the concept of Family Unity is strongly protected and recognizes that Mexican nationals by birth, as well as Temporary and Permanent Residents have the right to preserve the Family Unity and acquire the necessary documents so that their family members can be with them legally in Mexico.

Procedure to Acquire Visas

The procedure to acquire a visa has changed. The following is the general rule as well as some of the exceptions to this rule.

General Rule

You first need a VISA to enter Mexico and if you want to stay longer than the time allowed to Visitors, you need to acquire a Residence status.

All visas are granted by the Mexican Consulates outside of Mexico (Visitors, Temporary Resident and Permanent Resident). This means that all visas (Visitor, Temporary Resident and Permanent Resident) must be applied for in the consoler office and not at the immigration office in Mexico (Note: we all use to get our visas changed over here in Mexico). If you get a Temporary or Permanent Resident visa, you must then get the local immigration office in Mexico where you live to give you your resident card. There are a few exceptions where you are not required to first acquire a VISA from the consulate, and these are as follows:

Exceptions to the General Rule

For Visitor Visas (for tourists) If you are from a country that Mexico has “suppressed” the requirement of a pre-approved visa, you do not have to go to the Mexican Consulate to get a Visitor’s Visa. Both Canada and the US are countries that do not required pre-authorized Visitors Visa from the consulate, you simply get them on the plane on the way down or at the border.

If you have a Visitor Visa you can no longer change it over to another type of visa (Temporary Resident or Permanent Resident) while in Mexico, except if:

Article 41 – it is to preserve “Family Unity”, for an offer of work or for humanitarian reasons.
Article 53 – “you have a relation with a Mexican or foreigner with residence in Mexico”. We are not sure how open the concept of “relation” is.
Temporary Residents can change to Permanent Resident while in Mexico. If you presently have an “immigrant” card that was granted under the old law, the local immigration offices in Mexico should change it over to a Permanent Resident card without having to go out of the country.

General Issues of Interest

Here are some points of interest regarding the new law:

Under the old FM-2 you had to be in the country 182 days a year or it was automatically revoked. This disposition does not exist for either Temporary or Permanent Residents. This was a problem before for people that wanted the tax exemptions on the sale of their Primary Residence because they needed an FM-2 but could not meet the 182 day requirement.
Under which visas can I have my car and house hold items in the country? Articles 52 and 54 of the law say that you can bring your property into Mexico “subject to the applicable legislation” – which in this case are the tax laws and customs laws. Right now those laws have not changed to take into consideration the reforms of this law and therefore right now we are uncertain of the implications.
If you were an “immigrant” under the old law you were not required to get a further permit to work. The new law is not as clear here. Article 52 fraction IX states that Permanent Residents can work for pay, however Article 54, second to last paragraph says that you require an additional authorization to work for pay. The Rules of the law (Article 164) states the all Permanent Residents can work for pay. We hope this aspect of the law will be clarified in the coming months.
Article 60 states that a foreigner, regardless of their immigration status, personally or via proxy, can open a bank account. The old law was not clear here and most banks did not allow you to have an account without an FM3 or FM-2.
Once you get a Temporary Resident or Permanent Resident visa, you have 30 days counting from entering the country to register with the local immigration office. Furthermore any change in nationality, address, civil status or work must be notified to immigration within 90 days of the change.
If you have a company that wants to hire foreign employees, the company needs to register with immigration.

If old law states that if you wanted to marry a Mexican national you were required to get a permit from immigration. This is no longer a requirement.

Publisher’s Note: There’s an excellent article that is quite extensive and kept quite up-to-date at “Surviving Yucatan” that you may want to read if you are looking for more information.

Why is Vallarta Real Estate Priced in USD?

A question buyers and sellers of real estate in Vallarta often ask is why, when the official currency of Mexico is the peso, is real estate sold, or at least “tourism” real estate, sold in US dollars?

Vallarta is not alone. Other major tourism real estate destinations that are popular with Americans and Canadians also sell real estate in dollars. So how did this trend become established?

One of the reasons is that it makes it easy for Americans and Canadians to deal with. They don’t have to make the exchange rate adjustment, the price is what it is, in USD. When you have an peso exchange rate that is continually changing, (which it usually is), this means the price you’d be paying in USD is also changing. So if the exchange rate is 10-to-1 and the asking price was 1 million pesos, that converts to US$100,000. But if the exchange rates goes up to 11-to-1, well now the property is selling for roughly US$99,000. So to keep it simple, someone decided to just keep it in USD for the gringos.

But there’s another good, perhaps even better, reason.

Mexico has alway been plagued by inflation. At times there have been large jumps in the exchange rate, (like in 1994, again in 2008, and most recently in 2016), which can happen at anytime. Now for builders who have to pay for materials that originate from the U.S., or for products made in Mexico but with U.S. materials, if there is an exchange rate jump they could find that there profit margin has just been reduced, perhaps even losing money, because of an increase in building costs. So to cover or “hedge” themselves, they sell in dollars. Which in that case, if there is a rate drop, it can actually be to their benefit, as they’ll be receiving more pesos and the majority of their expenses are in pesos. Building a home or condo project can take over a year and a lot can happen in that time. So selling in USD made sense. And the tradition has continued.

It has a potential downside, however.

Properties are registered at the land title office in pesos. So, using the previous example, if you bought a condo for US$100,000 and it was registered when the exchange rate was 10-to-1, it would show on title at 1 million pesos. If a few years later you sold the property for the same price (US$100,000), but the exchange rate was now 11-to-1, this would show you were selling the property for 1.1 million pesos, meaning on paper your property appreciated by 100,000 pesos. And that’s taxable at 35%. Meaning, even though you sold the unit for the same price you sold it for, you’d still be liable to pay taxes, and in this case, 35,000 pesos. Now imagine if the exchange rate was now 15-to-1!

Now, it isn’t quite so simple, they are some expenses, in certain situations, that you can apply against the tax bill. If you are in this situation, however, it would be best to talk to a real estate lawyer to know exactly where you stand.

What type of home will suit you best in Puerto Vallarta or Nayarit?

What type of vacation home is best for you?

The Vallarta vacation-home market has been continually evolving to meet the needs of consumers and their families, so that today’s marketplace provides potential homeowners many different and unique buying options. When selecting a Vallarta vacation home that will best suit your lifestyle needs, it’s important to first educate yourself about market terminology and options available, and then assess your vacation preferences, travel goals and budget. You also should obtain relevant information online, and talk with a real estate professional located in the region.

Five Vital Factors

Five main factors, which most affect the cost of a vacation home, need to be considered to ensure you obtain what best fits your needs.

Location: As they say, when it comes to real estate, the three most important factors are “location, location and location”, and the situation is no different here in Vallarta and Nayarit. Where the property is located will affect the sales price, type of view and proximity of the amenities most important to you. Vallarta and Nayarit offer a wide variety of options when it comes to location; you can be in the city, a small out-of-the-way village, a gated community, mega-development, high on a hillside overlooking the bay, on the beach, within a marina or along a golf course fairway. The types of property here are greater than anywhere else in Mexico.
View: In warm-weather places such as Vallarta, where considerable time can be spent outside on the terrace, having a nice view is worth considering. On the south side of Vallarta, the foothills of the Sierra Madres provide spectacular bay and city views. But there are other views to consider, such as golf fairways (someone else mows your backyard), marinas (easy to keep an eye on your boat) and lush jungle (quite spectacular).
Size: How large a place will you need? Will friends and relatives be visiting, and do you want them to stay with you? Usually, a second room that serves as an office/TV room/guest room is a good idea. Regarding condominium living, how big a building/project do you want? Usually, the larger the project (more units), the more amenities provided.
Amenities: If you have a strong interest in boating or golf, you’ll probably want to be located as close to a marina or golf course as possible. If you enjoy dining out and socializing, you won’t want to live somewhere remote. If you surf, swim or enjoy long walks on the beach, you’ll want easy access to the ocean and surf breaks.
Time: How much time will you actually use your vacation property? If you’re only vacationing a couple of weeks a year, do you even need to consider ownership? Perhaps a property rental or condo/hotel would suit your needs best for now. Or you could consider one of the popular alternative forms of vacation ownership mentioned below. If you’re spending any more than four months, however, you probably will want your own place and will go with full-time ownership. Another option, if you plan to use your property for just a few weeks a year for now but intend to spend more time here in the future, perhaps even retiring here, is to purchase and then rent out the unit when you’re not using it, using the income to pay maintenance costs and part of the mortgage (if there is one). Demand for rentals has been strong recently, so you may be able to rent out your place frequently, especially if it positively incorporates these four factors: good view, location, size and amenities. Keep in mind, however, that there are only four to six strong months for rentals each year and that dealing with coordinating the rentals can take up a lot of your time.

Traditional Forms of Vacation Ownership

The traditional forms of vacation ownership in Puerto Vallarta involve full-time home or condominium living, condominiums making about 80% of this market. There’s a wide variety of options available for nearly every potential vacation homeowner. Most of the current market is made up of re-sale properties, as the new-product market slowed during the past five years. That is changing, however, and developers are building once again, most offering a product that matches a different buyer than in the past: one looking for something smaller, less expensive and with fewer amenities, basically to keep ongoing and initial investment costs low. A downside to new-product purchasing is not always knowing what you’ll eventually get; however, on the upside, whatever it is will be “new” and built with the latest building products and designs. Purchasing existing real estate may be safer in some respects (you know what you’re getting), but there’s nothing quite like buying a brand-new property that you can participate in designing and decorating. With traditional forms of vacation ownership (vs alternative forms), there’s also the potential added benefit of appreciation.
Traditional second-home ownership appeals to those seeking a vacation setting to share with family and friends and/or use for business whenever they choose. Owners, however, have full responsibility for maintaining the property, which may include hiring a management company.

Full-time Condominiums

For most people, condominium living is the way to go. It’s simpler to maintain and easy to lock up and leave when you return home. Yes, you have to put up with neighbors, perhaps on all sides (consider that when selecting a unit), and yes, you have to share the responsibilities of repair and maintenance with others (the good: you share the costs; the bad: you don’t always get what you want but what the majority wants). Condominiums can be tall towers offering spectacular views. They can be situated right downtown, making it easy to get around. But it is communal living; you need to realize that and be willing to live with the good and not-so-good.

Full-time Homes

There are both new and re-sale houses, but the selection is more limited than it is for condominiums. And it currently is even more limited if you’re looking for a developer-built home. If you want to create something of your own, however, you can buy a lot and build your dream home and get exactly what you want. With home ownership, concerns regarding neighbors are less, and you certainly won’t have anyone above or below you. But the cost of operation is solely your responsibility. You don’t have to share the pool or garden areas, so you’ll have much more privacy, but you alone are paying for the maintenance. View properties are a little harder to find, unless you’re looking at the South or North Shores of the bay, where there is more elevation. Most vacation homes in Vallarta are found along golf courses or waterways, such as in Nuevo Vallarta. They are inside gated communities, which provide more security, if that’s a concern.

Alternative Forms of Vacation Ownership

For those who only want to invest for the amount of time they actually will be vacationing, there are alternatives that involve purchasing just a portion or fraction of the weeks’ or months of the year. This can involve receiving actual title or deed, or it can be a right-to-use, commonly 25 to 30 years. This form of vacation ownership is best for those anticipating usage for the full term of the ownership, as re-sales rarely reflect the original purchase price and capital gains are not common.

Timeshare / Vacation Ownership

Timeshare ownership may be purchased through deeded property ownership, right-to-use or a more flexible points-based program. Owners purchase a condo or villa for one or more weeks use within a fixed or “floating time” system, which allows scheduling each year’s vacation during the most convenient week within a specified season. With timeshare, consumers have the opportunity to purchase time at resorts offering a wide range of amenities at different destinations. While most vacation ownership villas have two bedrooms and two baths, floor plans range from studios to three or more bedrooms.
Ownership is a one-time purchase, which often is developer financed, owners then paying an annual maintenance fee based on the unit size, location and amenities. Timeshare is not intended to be an investment opportunity, rather an alternative to traditional vacation accommodations and a way to hedge against “vacation inflation”. Pricing varies considerably based on the five factors mentioned above, but usually ranges from $15,000 to $50,000 USD per week. Puerto Vallarta was one of the first and most successful timeshare destinations in Mexico and offers a wide variety of different types of products, plans and pricing.

Fractional Ownership

Private Residence Clubs

A step above timeshare is fractional ownership, which usually comes with a recorded deed and title. Fractional ownership has the benefits of second-home ownership, but for a fraction of the cost and without the maintenance responsibilities. Considering the average vacation-home buyer uses the property just three to four weeks a year, fractional ownership tends to be more in line with the actual use of the vacation home. Additionally, fractional properties are generally affiliated with high-end hotel companies or high-end boutique operators, so owners have the benefits of personalized services and amenities.
Fractional interests can range from $60,000 to $650,000 USD per interest, based on floor plan, location and size of the fraction. In addition to the purchase price, there also are annual maintenance fees to consider. Fractional ownership has not been as popular as timeshare in Vallarta and Nayarit, but there are programs available.

Destination Clubs

Members of a destination club are not buying a specific property, but rather the right to use any of a portfolio of homes owned or operated by the club company. With few exceptions, they offer a non-equity-based membership emphasizing a broad selection of vacation-home experiences. Most destination clubs also offer members concierge services.
The average length of stay at destination clubs ranges from one to nine weeks, and costs include a one-time fee ranging from $20,000 to $1.5 million USD, which is typically between 80 and 100% refundable if they choose to exit the program. Annual dues range from $1,500 to $30,000 USD. The club may also charge a nightly fee while guests are in residence.

Condo Hotels

Condo hotels offer a portion of their hotel room inventory for sale to the public. The owner may use it for vacation or corporate housing needs or place it in a rental program, typically managed by the hotel. Owners then receive proceeds from the rentals. Buyers enjoy the benefits of owning real estate in a desirable location coupled with hotel amenities and services. Annual dues also apply. Condo hotel pricing varies by real estate market trends; however, currently there are few options available for condo hotels in Vallarta.
When it comes to vacation ownership, especially in and around Puerto Vallarta, there are myriad options available to you. Getting exactly what you want will involve first knowing what your needs are, obtaining as much product information as you can on what meets your needs, and then weighing one against the other. Spending a little time now to think it fully through can ensure long-term enjoyment for many years to come.

Alamar Launches New Construction on Delta II Tower

Alamar, the residential complex situated on the hillside behind La Cruz de Huanacaxtle on the North Shore of Banderas Bay, has announced they have begun construction on a new tower. In view of the fast progress in both the construction and marketing of Delta I Tower, whose sales surpassed all expectations, Alamar has announced that new construction for tower Delta II is now underway, and units will be delivered by September 2019.

Alamar is another success story of the real estate development company Grupo Real del Mar, a division of Tierra y Armonía, with projects such as Punta Esmeralda, Real del Mar, La Joya and La Joya de Huanacaxtle developed over the past few years in Riviera Nayarit.
Alamar has numerous common area amenities such as a large beach club (seen in the foreground above), jungle club, paddle tennis court, swimming pools, gym and trekking trails, as well as a Discovery Center and Concierge services.

At 27% sold out to date, Delta II is now a reality and at the same time an omen that very soon the launching of the presale at Delta III will take place, which is expected to surpass the achievements made in preceding stages of the Alamar development. For more information contact Alamar direct at (329) 295-5370, or visit their web page here, or their website.