Wednesday, November 24, 2021

Dear Your Overseas Dream Home Reader,

My scout, Jason Holland, continues his exploration of Huatulco, a small vacation destination on Mexico’s southern Pacific coast. And below he shares some properties he’s found with truly spectacular views over the water…for under $500,000.

One of the things that appeals to me most about this place so far—besides those views…the beautiful beaches…and the 18-hole golf course that Jason tells me was empty on blue-sky Saturday late morning—is just how neat and well-organized it is.

FONATUR, Mexico’s tourism authority, has guided development here since the mid-1980s, putting in infrastructure like roads, water treatment, and an international airport…but also well-maintained public parks, beach pavilions, plenty of beach parking, and lots of green space.

As Jason describes it, the whole community has somewhat of a resort feel. And while that’s not for everybody, it certainly appeals to many vacationers, snowbirds, and even full-time expats who come to enjoy fun in the sun in a seaside paradise the easy way.

Wishing you good real estate investing,

Ronan McMahon, Real Estate Trend Alert

Huatulco’s Thriving—and Varied—Real Estate Scene
By Jason Holland

It’s said to be on the best beaches in the area. And in a place with 36 of them, that’s saying something.

I’m in Huatulco (pronounced Wa-Tool-Coh), a beach community on Mexico’s far southern Pacific coast, in the state of Oaxaca.

Huatulco’s coastline is dramatic, the place where the Sierra Madre del Sur mountains meet the sea, resulting in a series of cliff-lined coves and bays. There are famously nine bays and 36 beaches in Huatulco. And this geography is why you’ll see villas and low-slung condos (they are capped at four stories) dotting the hillsides overlooking the water.

It makes for great vistas, like the one from this condo I toured a short walk up the hill from Playa Arrocito.

This attractive property features lagoon pools and stellar views and is a quick walk to a great gourmet seafood restaurant and a beautiful golden-sand beach.

This is Eleven by Cosmo, which is apparently the only condo is town with direct access like this to a sandy, swimmable beach. There are only a few properties for sale here right now. There is the penthouse in the video above for $589,000, as well as two two-bedroom condos for $479,000 and $489,000.

Huatulco was master-planned for tourism by FONANTUR, the government’s tourism authority, starting in the 1980s—and their guidance as far as development continues. Huatulco is meant to be low density and sustainable, with environmentally friendly practices. With its well-developed road networking and ample green space, the whole place has the feel of a resort. And that’s appealing to the vacationers who come here for beach days, fishing, boating, and more.

At the far eastern edge of Huatulco is a small residential community called Playa La Bocana, which is the only place you can surf in this area. There’s not much there yet. A mezcaleria, a few places to get a bite to eat. But it’s only about 20 minutes’ drive to the main developed areas of Huatulco. Nothing is far on this stretch of coast.

Just after I toured this construction site where Bocana Beach Vistas will be, I learned that the last condo in this building had been sold.

But it’s worth taking a look at my walkthrough below to see what the area looks like.

The top floor two-bedroom condo in this video was priced at $326,000. Lower-floor units, without as much as a view, went for less. This building, with just six units, has just sold out. But there are many other buildings under construction now…and projects planned for the future.

I shared this next video in my report yesterday. This two-bedroom condo in a community called Sotavento overlooks what is essentially a private bay. An investor bought pre-construction and is now selling for $419,000.

The beach is a bit rocky on this bay, but you could launch paddleboards or kayaks from the shore. There is a large terrace with infinity pool overlooking the Pacific.

My contacts here tell me that a unit like this could rent for $1,200 per week in low season and $1,400 to $1,500 in high season.

In Huatulco, you can also have an “in town” feel.

One community I visited under construction called Ziba is in Santa Cruz, a cluster of residential development, with hotels, shops, restaurants, bars, one of the main marinas in Huatulco, and a wide swimmable beach popular with day-trippers.

From this condo, you will be able to walk to everything in a couple minutes. One unique feature: a rooftop terrace for use by residents with an infinity pool. I’ve seen this amenity in Playa del Carmen, Puerto Vallarta, and Tulum but apparently it’s something new for Huatulco.

Studios are available for $143,000 and two bedrooms for $208,000. Buyers also have the option of combining floorplans to create larger two bedrooms with a lock-off option, which is ideal for vacation rentals. These condos start at $302,000.

In the Santa Cruz area, you have a wide bay, good swimming beach, marina, shops, restaurants, and homes by the beach, as well as up in the hills. The Ziba condos, available from $143,000 for a studio, are located a couple minutes’ walk from all this action.

There are other real estate options in Huatulco.

As part of the masterplan, there are neighborhoods and communities of single family homes, homes overlooking the area’s golf course, and even homes along a canal with direct access to a full-service marina and the Pacific.

Perfect for boaters. These villas along the canal with direct access to the Pacific remind me of neighborhoods in Florida with similar set ups. And they’re close to the full-service Chahue marina pictured below. They go for around $1 million.

The Chahue marina hosts mostly private craft. You’ll find more fishing and tour boats for hire in the Santa Cruz marina.

For a luxury villa set on a hillside overlooking the Pacific, you’re looking at around $1 million. And for something in one of the more upscale communities with larger homes that are a bit inland and come with guarded access, you’re looking at $400,000 or more, depending on size, with lots for $125,000.

At Huatulco’s golf course, there are two holes right on the ocean. Lots for homes are available from $120,000. There are also two-bedroom homes for $275,000…and three bedrooms for $325,000. A six-bedroom home overlooking the 16th fairway is listed at $600,000.

There’s a nice mix of real estate and price points in Huatulco. And with the good road network and short distances, any place you decide to invest is close to everything this community has to offer. That’s appealing if you live there, use it as a second home, or plan to rent it out to vacationers.

There are only a few large resorts here, by design, with small hotels and vacation rentals making up the rest of the accommodations. Many visitors, especially those from the U.S. and Canada, prefer to stay in condos or homes they book for a week or more.

Huatulco is also an expat haven for full-timers, as well as snowbirds who stay for the whole winter season. (With 340 days of sunshine a year, it’s an ideal getaway pretty much any time of year, really.) Many of those seasonal residents buy second homes, some rent them out when they’re not there.

My contacts here tell me that property sales have been very strong this year in Huatulco. Those vacation home buyers, new expats coming to live, investors…they’re all coming in increasing numbers, they say.

And development, while sustainable, continues to meet demand. I saw quite a bit of construction during my visit, with plans also on the drawing board for ambitious new developments to come.

Is there income potential? While many of the Mexican visitors head to resorts and hotels, American and Canadian visitors like to rent homes or condos by the week. Nice two bedrooms in beachfront buildings can bring in, as I mentioned, $1,200 or more per week.

And there is also potential for having long-term tenants—snowbirds who come for winter. Some of those folks have bought, but others are seeking rentals for a month, two months, or more. If you owned a property, that could be a nice reliable income for part of the year.

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Your Comments and Questions Shane Says: I’ve been reading your newsletters for a bit. For those of us who want a deal off the resort and more middle class, do you present those types of deals too, or is the profit percentage better on luxury deals? Ronan says: I tend not to bring those kinds of deals to my Real Estate Trend Alert group as investment plays because the upside is much stronger in expat-targeted communities and in resorts/gated communities. This is down to the fact that land is limited and what can be built there is more controlled. For lifestyle plays, however, there can be great value in middle class, local neighborhoods. For example, here in Cabo for $150,000 you can buy a fine house of 2,500 square feet even with a roof terrace with a distant Ocean View. The downsides are noise issues…not much you can do if you have noisy neighbors…and reliance on municipal infrastructure. Of course you don’t have the HOA fees we have in the resorts. It’s definitely a good option for someone who is limited in budget. Connect with us on Instagram or Facebook