Puerto Peñasco has become an attractive destination for property investors, particularly foreigners looking to own a piece of paradise in this once sleepy little fishing village. This article will discuss the intricacies of investing in Puerto Peñasco, focusing on how foreigners can own property in Mexico, the benefits of short and long-term rentals, and the current state of the real estate market in this picturesque town.
Foreign Ownership of Property in Mexico
Foreigners can own property in Mexico through a bank trust known as a “Fideicomiso.” This trust allows non-Mexican individuals to acquire residential property within the restricted zone, which includes areas within 50 kilometers of the coastline and 100 kilometers of international borders.
A bank trust or Fideicomiso is an agreement where the bank acts as a trustee and grants the foreign buyer all ownership rights, including the ability to sell, lease, or pass the property to heirs. Bank trusts are written for up to 50 years and they are renewable for any number of additional 50-year periods.
Recently, a Canadian couple I know purchased a beachfront condo in Puerto Peñasco through a Fideicomiso. The couple said they found the process relatively straightforward with the assistance of an AMPI-certified real estate agent who guided them through the legal requirements and paperwork involved in setting up the trust. Don’t purchase real estate on your own and always work with an AMPI-certified real estate agent who will represent and protect your interests during the process.
Benefits of Short and Long-Term Rentals
Investing in property in Puerto Peñasco offers lucrative opportunities for both short and long-term rentals. Short-term rentals are typically vacation rentals that can generate significant income during peak tourist seasons. On the other hand, long-term rentals provide stable, consistent cash flow for investors looking for steady returns on their investment.
Property investors in Puerto Peñasco typically leverage the town’s popularity as a vacation destination by listing their properties on rental platforms such as AIRBNB and VRBO. Historically investors report high occupancy rates and substantial rental income, especially during holiday seasons and special events. If you are a busy person then investors typically use a Property Management company to handle the marketing, booking, cleaning and maintenance of their units in exchange for a 25% to 35% fee of the gross rental returns.
State of the Real Estate Market in Puerto Peñasco
The real estate market in Puerto Peñasco has been experiencing steady growth in recent years, driven by an influx of tourists, retirees, and expatriates looking to invest in beachfront properties. Property prices in Puerto Peñasco are relatively affordable compared to other coastal towns in Mexico, making it an attractive investment opportunity for both seasoned and first-time investors.
Puerto Peñasco had record setting years in 2021 and 2022 surpassing $100 million in total “Dollar Volume of Sold,” making that the first time in history that Rocky Point had back-to-back years of over $100 million or more in sales production. Sales during 2023 and 2024 have slowed due to higher interest rates and politics back home. This change in the market benefits buyers because properties sit on the market longer allowing buyers to submit offers below the asking price resulting in acceptance at reduced pricing. If you are looking to make an investment in Puerto Peñasco now is a good time to make your move.
Investing in Puerto Peñasco, Mexico, presents a unique opportunity for foreigners to own property in a thriving coastal town with immense potential for rental income and capital appreciation. Embark on your real estate journey with only an AMPI-certified real estate agent in Puerto Peñasco and discover the beauty and profitability of investing in this coastal paradise.
About the author: Joseph Sanchez is a real estate agent with RE/MAX Legacy, developer of Viviente at Sandy Beach, president of Rocky Point Home Builders and a U.S. Veteran. He resides here in Puerto Peñasco with his wife and three children and is originally from Chicago. For more information visit www.rockypointrealestate911.com on the internet.
