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Purchasing
a Condo for an Investment
Buying a
house for an investment
Quality
developments in Baja
The
investment opportunities in Baja California are much different than they
were even a year ago. With many of the successful developers in the U.S. now
building in Baja Norte, there is a new security in purchasing here that is
attracting investors from not only the U.S. but also from Europe and Asia.
The investment choices are
so varied in Baja Norte that it is easy to get confused. At Baja Relocation
we have independently researched some of the developments promoting
themselves as excellent investments to see exactly what it is that they are
offering.
The fundamental criteria
for purchasing Baja property is no different to buying in the United States
when it comes to an investment opportunity. There is however other issues
that need to be considered.
Purchasing a Condo for an
Investment:
If you are considering a
condo in one of the new developments lining the coast from Rosarito to
Ensenada, here are a few suggestions:
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Research the history of
the developer to determine what else the company has built. |
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Ask questions about the
quality of the construction. |
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Look for developments
that have attractive amenities including a pool, gym, spa, putting
green, restaurants, and plenty of recreation area |
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Ask to see the CC&R’s
so you know what kind of restrictions the management has on renting your
unit. |
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Ask the developer if
they will provide a furniture package |
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Make sure your condo
rental will be handled by a professional property management and that
they will be marketing the property to optimize your rental return. |
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Find out what kind of
accounting you will receive on the income. |
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Ask to contact someone
who renting their unit now. |
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Ask the developer to
give you an investment return estimate. |
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Ensure you get
independent legal advice. |
Be sure to have all of these issues noted in your contract to
purchase. Many of the developers will promise you a high return for your
unit, but if they are continually building condos in the same area and
promising everyone the same return, you would have to ask yourself, "Where
will they be getting the tenants from?"
If you are planning to buy a condo with the idea of selling
it for a profit, remember that few properties appreciate much within the
period of construction and if the developer is building nearby there will be
similar property for sale at a lower price.
Make cautious decisions but if you are dealing with a
developer with experience and the property has title insurance and U.S.
Escrow, the chances are you will see your investment safely grow.
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Buying a house for an
investment:
When considering the purchase of a house for strictly
investment, make sure there is not a development full of other investors.
There are several developments that seem to be completely owned by
investors. Many of these investors will want to sell their houses within two
years and you may have a lot of competition for the buyers.
Here are a
few suggestions for purchasing a house for investment:
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Look for a community
with a balance of investors and owner occupiers. Don’t be pressured
into buying by an agent until you have done all your homework. |
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Sewage treatment,
water, electricity, internet and telephone services are all very
important when purchasing a new home here as many developers will not
complete these services. Make sure the streets will all be completed
before you settle. |
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Older homes can be
great “buys” but be sure you are getting what you pay for. Is the
construction sound? Does the roof leak? Get an independent inspection
and if the agent does not suggest this, make sure you do. |
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Ask neighbors about the
community. They will be the best source for finding out if there are any
assessments anticipated and if the HOA fees are well spent. |
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Ask to meet the
President of the HOA. Find out about security and any extra fees you may
be expected to pay. |
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If you are planning to
use your house as a short term rental, make sure you find a professional
property management company. Many of the local companies will promise
you a return that they can not deliver and will not give you an accurate
account of your rental income. Get several recommendations and contact
them. |
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Find out what the
capital gains will be when you sell any property in Mexico. |
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Get both independent
tax and legal advise. |
Investing
in Baja now with so many Americans getting ready to retire may well prove to
be one of the best opportunities around. Just be sure you are working with a
company that sells only property that has title insurance and US Escrow.
Do not give your deposit to the developer or to the
real estate agent. You would not do this in the
US
and you should not do it here. As is always sound advice with a large
purchase of any kind - buy with your head not with your heart.
What makes a good investment?
What makes a good investment in Baja Norte has changed
this year due to a series of changes in both the U.S. market and the
enormous amount of condo development in the Rosarito / Ensenada region. If
you are buying for a short term investment this may not be the best choice
for you now with over 12,000 condos either presently in construction or in
the planning stages.
There area couple of areas that remain uncertain in
terms of investment, but may well prove themselves a good buy.
Bajamar has been a favorite of golf loving
Americans for decades. Recently several new developments have been released
there. It is very important to buy only properties with title insurance and
escrow there. The deposits are all paid to the developer so make sure you
research the developer and know their history of completing construction.
Condos there are already expensive and there may not be a lot of
appreciation for several years.
Ensenada
The market here is still very uncertain when it comes
to investing. Single family residences are the most popular property
purchase in Ensenada. Many Americans will live here permanently. If the
oceanfront condo market over builds here the way they have in Rosarito,
condos will not be a good investment. The zoning restrictions in Ensenada
have forced developers to build larger units so prices are about $500,000 in
most developments.
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These are a few of the quality developments in Baja Norte we recommend based
on adhering to the above criteria:
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The Residences at Playa Blanca
The Residences at Playa Blanca is almost
completed and the condo hotel attached to it is well along in
the construction process. Units there are continued to sell due
to the new lower deposit structure and the fact that people can
now go into the building and see the excellent view for
themselves. The developers there have recently hired
Constellation, the company that manages very high end resorts in
the U.S. and Australia. Individuals who purchased here have a
very strong investment outlook. There are still units available
Trump Ocean Resort
Trump Baja is now releasing the 2nd
tower, known as the Spa Tower. After record sales in the 1st
tower and fantastic response by the market for this one, there
is every reason to believe Trump Baja has secured its reputation
as the premiere development on the coast.
Las Palmas
This development is near completion and the
second phase is planned to start this summer. Buyers who are
purchasing the in the first stage will have both closing costs
and title insurance included in the price. This is very
important as these costs can be as much as 7% of the total
investment. Las Palmas is a very good choice for investment
/owner occupier because it is almost completed.
Porto Hussong
Porto Hussong will be an amazing
development, rivaling the best marinas in California and
offering a lifestyle not yet seen in Baja Norte. The fractional
condos will start in the $250,000 range. The marinas in southern
California has a long waiting list for overcrowded and expensive
slip availability, not to mention extremely high prices for a
condo there. Porto Hussong will offer a very reasonable
alternative to that market. This is an investment that will pay
off for both the boat owner and the savvy property investor. The
developer here has a long history of excellent properties built
in Mexico and is a hand on property developer.
Plaza del Mar
Plaza del Mar is the only single family residence development
located on the Oceanside of the highway with homes under $300,000. These
three bedroom and two bathroom homes are one of the best buys on the coast.
Located just south of Puerto Nuevo, Plaza del Mar is a well established
community and will have new amenities for this development.
Waterfalls at Malibu
El Sahuaro del Mar
Ensenada Developer with a reputation for building beautiful
homes. U.S. Title Insurance, Quality Control,
many community services and incredible views. Long term tenants only.
Finance is available.
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There are other good
investment opportunities and we will be adding to our favorites
regularly so visit us often or contact us for more information.
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