North American politics have a fascinating impact on some real estate markets in Latin America
As both Canada and the US become increasingly polarized internally, the outbound flows into Latin American real estate reflect these trends.
Canadians are still leaving in droves, though this seems to have slowed down a bit as the most motivated have left already.
During the Biden administration, conservative Americans flocked to certain areas of Mexico, Nicaragua, Panama, Costa Rica, etc.
Now that Trump is in power, we are witnessing two types of flows:
– Some conservative-leaning people are seeking to return home, given that “we are so back” and many grew tired of living away from home.
– The new flow of liberals wanting to diversify internationally or move abroad
Note that the total stock of foreign real estate held by Americans increases overall, as they buy more international real estate than sell international real estate.
Some destinations in Latin America are more liberal coded
Some are fairly neutral and attract both ends of the ideological spectrum, such as Panama and Costa Rica.
In Mexico Puerto Vallarta tilts liberal. Not to say that there isn’t space for conservatives – many live there, but the community tilts decidedly to the left.
This has resulted in the Puerto Vallarta real estate market being quite resilient. It attracts heavy investment from wealthy West Coast liberals who want an easy foreign getaway a few hours away from home with direct flights.
I find it absolutely fascinating when real estate markets are heavily impacted by internal politics in foreign countries. We see this on a regular basis in the Panama real estate market: when things go bad in the northern parts of South America, capital flees to Panama.
We saw it in Montenegro, Turkey, Dubai, Georgia, Armenia, Kyrgyzstan, the UAE and some areas in Thailand and Bali when the Russia-Ukraine war started.
We see this in Paraguay and Uruguay when things go crazy in Argentina and Brazil.
Puerto Vallarta, or PV as local expats call it, is an escape valve for liberals.
Market analysis with Paul
Paul is from New Zealand and has made PV his home. We looked a various properties in Puerto Vallarta, discussed the market, and ran some numbers.
Overall, don’t expect high rental yields. This is mostly a Plan B and lifestyle play.
Read the full report on investing in Puerto Vallarta real estate.
Get in touch with Paul my Puerto Vallarta realtor.
Are you rather interested in a country that seems to be going into the complete opposite direction?
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We’ll visit the headquarters of some of the largest Argentinian companies to get first-hand feedback on how the changes in the economy are impacting them, and what their views are going forward.
We will enjoy steak and wine together as a group every night, and also view a curated array of real estate offerings across Buenos Aires, ranging from new buildings to charming historical properties.
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To a World of Opportunities,
The Wandering Investor.
- My Real Estate Buyer’s Agent in Tulum and Playa del Carmen
- Give Birth in Mexico for Citizenship
- My Favourite Realtor in Puerto Vallarta, Mexico
- How to Obtain Residency in Mexico
Articles on Mexico:
- Playa del Carmen Real Estate Market: 2025 Investor Guide
- Full Analysis of the Tulum Real Estate Crash
- 6 reasons against a Real Estate Investment in Cancun
- Investing in Multifamily Housing in Playa del Carmen
- Puerto Vallarta Real Estate Market: 2025 Investor Guide
- What is a Lock Off Condo & Crazy Architecture in Tulum, Mexico
- Giving birth in Mexico as a foreigner – the complete guide
- Pros and Cons of living in Playa del Carmen, Mexico
- Puerto Vallarta real estate – a Plan B destination for liberals
If you want to read more such articles on other real estate markets in the world, go to the bottom of my International Real Estate Services page.
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Transcript of “Puerto Vallarta real estate – a Plan B destination for liberals”
LADISLAS MAURICE: Hello, everyone. Ladislas Maurice of The Wandering Investor, today with a very broken voice in beautiful Puerto Vallarta, together with Paul. How are you, Paul?
PAUL: Good. Welcome back to PV. It’s good to see you here again.
LADISLAS MAURICE: Thank you. And PV is an interesting market in the sense that a lot of liberals are now moving to PV, or are making a Plan B out of PV. And this is something that you’ve been seeing in your sales, and generally, in the market since the Trump elections, right?
PAUL: Yeah, like, this season has been a good season. I would say 70% of my transactions have been people that are wanting a backup plan, or a second residence, or putting money outside of the US to feel a little safer, I guess.
LADISLAS MAURICE: Cool. It’s a political move that people are making, essentially?
PAUL: Yeah.
Puerto Vallarta as a destination for liberals
LADISLAS MAURICE: Cool. This is really interesting. I mean, I did a video recently on Uruguay, trying to explain to people that Uruguay is a better option for liberals rather than conservatives, and then there are other countries, like Paraguay, that are better for conservatives. It’s really important for people to know what they’re buying into and to not make a mistake when they expatriate, or when they prepare a Plan B and they end up buying in a place that doesn’t fit their own worldview, and they’re not around the people they want to be around, right? Puerto Vallarta is really attracting this liberal crowd.
Can you define the different segments amongst the liberal crowd that are moving here? Are we seeing families moving, or is it just older Boomer Democrats? Who’s making the move?
PAUL: Full range of people. I don’t think you can specify anyone in particular. It’s just down to their individual personalities, I guess. A lot of my gay clients have more of an urgency this season about buying down here than they have in the past. Back in the past, it was about having a place in paradise and partying and restaurants. This season, it’s more, “I want to secure something here.” I’ve noticed that change, yeah.
LADISLAS MAURICE: And you had specific transactions where it was literally liberals wanting to get their money out, and then Republicans that were selling because, “We’re so back,” and they wanted to send the money back to the US, right?
PAUL: Right. The agents are noticing. In just two transactions this week, my buyers wanted to come here and bring their money here. The sellers were pro Trumpers and wanted to take their money back home.
LADISLAS MAURICE: [laughs] We see this in a lot of markets. Panama is a very notable one where this happens. And then here in Mexico.
Real estate market dynamics in Puerto Vallarta
LADISLAS MAURICE: And it means that, because the market isn’t doing fantastic in Puerto Vallarta, compared to kind of during COVID, where it was, like, a crazy boom, right?
PAUL: Right. We’re in a normal market now. I don’t think it’s a bad market, but the COVID days were just crazy, too hot. And so, we’re in a normal market, things have settled down, prices have settled. They’re not going up like they were.
LADISLAS MAURICE: Yeah, because prices almost doubled in a few years?
PAUL: Yeah.
LADISLAS MAURICE: Yeah. Cool. We’ll see that it’s not a cheap market. We’re going to see two properties. Can you give us just a quick overview of what we’re going to see?
PAUL: Yeah, great. The first property, this one is like a three-bedroom, renovated beach front, great amenities, a beautiful heated swimming pool, access to the beach. We’re 10, 15 minutes south of the Romantic Zone. The other property we’re seeing is a three-bedroom. It’s priced at $199,000. The beachfront property is $699,000. This other one we’re going to see is $199,000, and it’s more in, like, near Costco, it’s more in a suburban neighborhood.
LADISLAS MAURICE: Okay, so different options for different budgets, essentially.
Tour of 3-bedroom renovated unit in Puerto Vallarta
PAUL: Here we are. And here, it’s a fully renovated three-bedroom, two-and-a-half bathroom, got the kitchen here, you’ve got the master, and then the other bedrooms down here. And then, of course, you’ve got the ocean right out there.
LADISLAS MAURICE: When you’re looking at a property like this, would you say that it would be a good investment for Airbnb or for long-term rentals?
PAUL: Yeah. I mean, we’re 10 minutes south of the Romantic Zone, so you do need a car, you can’t walk anywhere. It attracts a person that wants a quieter rental, whether they’re staying short-term or long-term, you want a quieter life. Beach is right there, you’re listening to the waves, you’re not getting noise from night clubs or restaurants. As long as that’s what you’re looking for, this is a perfect place, whatever it is, short-term rental, long-term to live, or vacation.
LADISLAS MAURICE: Concretely, if I come to you as an investor and I say, “Paul, I want high rental yields,” would I get this from a unit like this?
PAUL: Beach front does very well, so I’m going to say yes, keeping in mind that PV is definitely more of a lifestyle destination and less about investing in real estate. The returns are not wonderful. But in terms of what options are out there, if you have something on the beach, you’re always going to rent it out. Yeah.
LADISLAS MAURICE: Yeah, cool. You won’t have any occupancy issues here, but generally speaking, in Mexico, when you go for normal kind of properties like this, you don’t have very high rental returns. And that’s just across the market, whether you’re looking here, or Playa Del Carmen, or Tulum, or Cancun, if you go into kind of a bit more scruffy, multifamily housing, you can make some yield. But here, something like this, I wouldn’t go in here as just a pure investment to say, I’m going to make high rental yields. And the taxes on rental income, depending on how you structure things, can be a little high, especially when it comes to Airbnb.
My general advice for people, when they want to invest in real estate in Mexico and they want to do some Airbnb, essentially, you’ll cover your cost, you’ll be able to use the unit for a few weeks or a few months a year and make a little bit of money extra. I wouldn’t bet on making great numbers. And the reality also is that people like to come during peak season, when it’s their own property, and that’s also when they would rent it out for the most amount of money as well. Typically, that also kind of suppresses the yields. And objectively, this is not cheap, right?
PAUL: No, $699,000 for a condo. I mean, it’s priced correctly, it’s fully renovated, but PV real estate is not cheap real estate. I just had a client who’s got four properties. One in Chicago, Palm Springs, New York, and now one here. And they have real estate in expensive places, and they felt PV is not really that much cheaper. You’ve got to keep that in mind here as well.
LADISLAS MAURICE: Yeah, it’s a market that is heavily influenced by the West Coast. A lot of money from the West Coast comes here, and you can see it in the property prices. It’s significantly more expensive than in their Riviera Maya, Playa del Carmen, etc. People really need to take this into account. And it’s also a much more established destination. Let’s go check out the other property.
PAUL: Sounds good.
Paul’s experience with a Chinese car in Mexico
LADISLAS MAURICE: Paul, you’re the second agent that I work with that I’ve seen this month that just bought a Chinese car.
PAUL: [laughs] Okay.
LADISLAS MAURICE: Why did you buy Chinese?
PAUL: Well, I’m not that knowledgeable on cars, and I had a friend that suggested the Chinese car, and knew this one, and knew all the technology it had, and said, you can’t kind of go wrong. And it’s been great. I love it.
LADISLAS MAURICE: Yeah, Chinese cars are really taking Mexico by storm, and Latin America, generally speaking. They’re spreading like wildfire. Great value for money.
PAUL: Yeah.
Lifestyle activities in Puerto Vallarta for tourists and expats
LADISLAS MAURICE: Paul, you’ve been living here for a few years now, in Puerto Vallarta. You originally moved from New Zealand, your country of origin. What are the main activities for people who want to move here, in terms of things to do?
PAUL: Okay, so if you’re like a tourist or coming here for the season, the winter season, everything from ocean activities, whale watching, it’s got good golf courses, pickleball is becoming more popular. A lot of the Canadians come and play that in the winter. There’s pickleball courts showing up. Fishing, hiking, AV tours. And then there’s some cute little small towns around PV, so all the little towns around the bay, and then inland, they’ve all got completely different vibes.
And so, if you want to be a hippie and go surfing, you go up to Sayulita. If you’re wanting the Marina lifestyle and having your boat, you’ve got Marina Vallarta and places. If you want to have more of like a country mountain feel, you can go inland to San Sebastian or El Tuito, places like that. There’s a lot of different flavors you get in quite a small area.
LADISLAS MAURICE: Yeah, in many respects, it’s more diverse here in terms of what you can do compared to the Riviera Maya, where it’s literally just the Caribbean, and then some cenotes in the jungle, and that’s pretty much it. Here, there is a much greater diversity of outdoor activities to do in Puerto Vallarta. And this is also why it’s a much more established destination, not just because it’s a lot closer to the US, but it’s also very close to Guadalajara. How long a drive is it to Guadalajara now with the new highway?
PAUL: New highway, like, three-and-a-half hours.
LADISLAS MAURICE: Okay. And this is big. Guadalajara has how many million people?
PAUL: Around 5 million.
LADISLAS MAURICE: Cool. We’re really close to a major, major Mexican city.
PAUL: Yeah. And that highway has opened up, for Guadalajara people, a weekend destination. You can see they’ll come for the weekend because it’s so close. Back in the day, it was more going to Puerto Vallarta for Holy Week, or Easter, or Christmas, but now you can have a beach house or a condo here and just pop over for the weekend. The other good thing about PV, compared to other places in Mexico, is our weather, although in the summer is very hot and humid, in the winter, it is, I’m going to say, almost perfect. It’s blue sky and just a lovely temperature all day long for five months. Don’t quote me on it, because it always changes a little bit, but it’s a beautiful weather.
There’s other parts of Mexico like Oaxaca and maybe Cancun area, where, in the winter, it doesn’t really cool off, so you really are living in a very hot, tropical place all year round. And I think that’s one of the reasons people come here as well, it’s a very livable temperature in most of the winter.
LADISLAS MAURICE: And what’s interesting is, recently, the numbers of international tourists coming through Cancun Airport and Cozumel Airport have gone down, not just because of the new Tulum Airport, but just overall, the numbers are down in the Riviera Maya. But here, in Puerto Vallarta, the tourism numbers are a lot more resilient. It’s a much more established market. You pay a premium for real estate here, but you have a market that’s, in many respects, healthier than other markets, like the Riviera Maya, which is a little bit more speculative than here.
This past week, Paul, I was in Tulum, and the market has just absolutely crashed there. It’s really, really ugly. At some point, tourism was booming, construction was booming, rental yields were really high, and it was just a question of what would grow faster, tourism or construction? And yeah, [laughs] construction grew faster than tourism. And now the market has just slowed down, and a lot of developments are essentially going bankrupt. People are losing their savings, or these pre-construction deals are ending up being two, three years late, so a lot of disappointment in Tulum.
Pre-construction real estate in Puerto Vallarta
LADISLAS MAURICE: Are you seeing issues here in Puerto Vallarta with pre-construction?
PAUL: Yeah, we’re definitely seeing issues. I wouldn’t say it’s anywhere near as bad as Tulum. In 2021, 2022, 55% of my sales were pre-construction. The last 20 sales I’ve done now, two were in pre-construction out of the last 20. And so, I and my clients and buyers, and that’s not me necessarily put off pre-construction, but my buyers are not looking to it. From the news headlines, from what has been happening, buyers have just been a lot less interested in pre-construction. Of course, I’m always very careful on where you go, which pre-construction projects to go to. Even then things can go wrong. There is risks involved. If I have a client that is a little on the fence, I steer them away from pre-construction at the moment. And that’s kind of common amongst agents here.
Pre-construction sales are way down. And I think through COVID, it was such a good market that developers and unknowing developers sort of thought, I want to get on this gravy train. And so, they purchased land back then. They went through the permit process back then, and then, over the last year or two, have finally got the project, the plans all together, the permits all together, and have launched, but yet the buyers are not around like they were. Also, back five years ago, a building would be finished and maybe 65% would be sold when it’s finished. Then during COVID, it would completely sell out, and it’s still a piece of land. Now we’re back to what I would call a normal market, where maybe half of the building is still available when it becomes finished.
You do need to look to developers that have the money to be able to really, really complete the project. But a lot of these new developers that have come through, because they saw the gravy train, don’t have the money behind them, don’t have the experience behind them. That has been a bit of an issue. Most good agents in town really have pulled back on their promoting of pre-construction. Doesn’t mean I don’t sell at all pre-construction, I’m just super careful that watch out for any red flags, and also make sure my client has the right temperament to handle pre-construction, the delays, things like that, and also that it’s not their entire life savings going into pre-construction.
The other thing is, during the COVID period, when pre-construction was selling like crazy, there was nothing else to buy. The resale options were pretty average, whereas now resale options are pretty good. You get a place, you don’t have any other risk of pre-construction, the place is furnished, and you can move in, and you don’t have to deal with the delays or anything like that. People are turning back to resales as a safer option.
Overview of Zona Romantica of Puerto Vallarta
LADISLAS MAURICE: Here we’re in the Zona Romántica. Can you tell us a bit about this area? Because this is really one of the main reasons people come to Puerto Vallarta, or it’s one of the main attractions.
PAUL: Right. This is very much the gay neighborhood. It’s old town. It’s where the nightclubs are, the bars, the restaurants. Keep in mind, PV has a lot of little pockets to it, so this is only one of 10 different places to go in PV. But this is the gay community come here. It’s a very lively, fun neighborhood. It’s got Mexican charm and tradition, and so people love it.
LADISLAS MAURICE: Why did PV become such a gay destination?
PAUL: Well, there’s different views out there on that. The most common one is Elizabeth Taylor was coming here back in the 60s or whenever, and she brought all her gay friends down here to get out of the spotlight or away from the paparazzi. And it just kind of grew from there. And since then, it’s always been a gay-friendly destination. But then COVID came, and it became a gay destination on steroids. It really took off even more so, because it was very hard to travel during COVID, Mexico was very open and welcoming, and the digital nomads became a thing, and so PV was very accessible.
LADISLAS MAURICE: What percentage of your clientele is gay?
PAUL: Let’s say, 30%, 35% of my clients are gay, and buying, generally, in this neighborhood or up in the hills around here. And up is Alta Vista, Conchas Chinas.
High-end real estate market in Puerto Vallarta
LADISLAS MAURICE: And you’re saying that, even though the market is so-so, the upper end market is doing really well?
PAUL: This season, specifically, the over-a-million-dollar market has been going really well. The market sort of $400,000 to $700,000 has been particularly quiet. Below $400,000 has been pretty good. But yeah, this season, over-a-million has been moving really well.
LADISLAS MAURICE: And why is that?
PAUL: You know, I’m not 100% sure. For me, personally, I think my clients that have a lot of money, that are Democrats, are happy to spend a million dollars on a backup plan down here. That’s what I feel.
LADISLAS MAURICE: And what percentage of those million-dollar houses is, like, who are these people? Again, Boomers, gay?
PAUL: Yeah. Gays between 50 and 70.
LADISLAS MAURICE: Cool. And that’s something that you see in a lot of real estate markets. As soon as you see a bit of a gay neighborhood starting to develop, especially in emerging markets, where it’s often not that developed but it starts developing, the first few gay bars are in one specific area, you want to invest. Because the purchasing power the gay clientele is generally a lot higher than for straight people. And you can generally see prices just go up vertically in those specific neighborhoods. And then PV is really case in point. I mean, the gay neighborhood is, literally, the most expensive part of PV, right?
PAUL: Yeah. Yes. It brings the most tourists here for rentals. But, I mean, there’s some different pockets, but the Romantic Zone is definitely one of the more expensive places. The villas up in Conchas Chinas are very expensive. The bigger condos in the hotel zone are very expensive. So, not the only neighborhood that’s expensive, but definitely up there.
We’re in Gaviotas here. And so, this neighborhood, when, like, the Romantic Zone and Old Town, because that was a fishing village back in the day, and then when that started getting too busy and too packed and just too crowded, the wealthy Mexicans from there moved to this neighborhood. And so, it’s flat, larger pieces of land, and beautiful houses. Often, you don’t know what’s behind the walls, because they have big, high walls, but can be incredibly beautiful houses behind the walls. This is one of the nicer neighborhoods. And then the property we’re looking at is in here, which is a condo building. And there’s not many condo buildings in this neighborhood. It’s mostly these big, big houses.
LADISLAS MAURICE: It’s really charming here.
Tour of apartment in Las Gaviotas, Puerto Vallarta
PAUL: Super charming. And so, you’ve got the cobbled streets like you have in the Romantic Zone, and then you’ve got these lovely, big houses. See, very traditional Mexican houses. You’ve got the cupola up there. And although, sometimes, they don’t look like much from the outside, you go through that door and it just opens up into this incredible house. And then here, you’ve got this condo building. There’s not many condo buildings in the neighborhood, but you kind of get the best of everything. For a low price, you get to live in this pretty exclusive neighborhood, close to Costco, close to the restaurants in Versalles on the flat, very safe, lovely neighborhood.
All right, so here we are. You’ve got 1,000 square foot. It’s $199,000 for a three-bedroom, one-bathroom.
LADISLAS MAURICE: People are really exposed to the elements here?
PAUL: Yeah, but you could glass that over if you want.
LADISLAS MAURICE: Are there issues with bugs around?
PAUL: No, not really. But if you were, you just close it up.
LADISLAS MAURICE: Okay.
PAUL: Three bedrooms, one bathroom. This is a family property. In the neighborhood, you’ve got a British American school, so it’s good for expats that are families, or you’ve got the Mexican market as well.
LADISLAS MAURICE: Okay. Typically, would I be right to say that it would be more Canadians than Americans that would be going for properties like this?
PAUL: Yeah. I mean, I wouldn’t say 100% but yeah. And it’s for buyers that want their little piece of paradise, but they’re in that $200,000 budget.
LADISLAS MAURICE: Cool. And it’s something that we see in real estate. In real estate across Latin America, the difference between US and Canadian buyers is quite big. I’d say, on average, a Canadian buyer has 50% to maybe 70% of the budget of a typical American buyer. The crash of the Canadian dollar has hit Canadians quite hard. The economy is not great in Canada. The housing market is crashing in Canada. And then we can feel it in expat markets across Latin America, with the lower purchasing power of Canadians, unfortunately.
[Pointing at an iguana] And then there’s a friend that comes with the property.
PAUL: And then you’ve got Jose in the tree. [laughs]
LADISLAS MAURICE: [laughs] Wow. He’s huge.
PAUL: He’s big.
LADISLAS MAURICE: Wow. So, Jose?
PAUL: Jose.
LADISLAS MAURICE: He’s the mascot of the development?
PAUL: Yeah, he keeps an eye on things.
Example calculation of rental yield in Puerto Vallarta
LADISLAS MAURICE: [laughs] Let’s do some numbers, just out of curiosity, to see the investment case. So, $200,000, what would be the closing cost, roughly?
PAUL: You’re around 6%, plus $1,250 for the bank trust.
LADISLAS MAURICE: And how much could I rent this in this current condition?
PAUL: Like, 18,000 pesos or $1,000 a month.
LADISLAS MAURICE: What would be the occupancy rate, roughly?
PAUL: A good 90%.
LADISLAS MAURICE: Okay. And what would be the property management fees?
PAUL: You’re about 15% of your income.
LADISLAS MAURICE: Okay. And what about the HOA?
PAUL: For this building, really low, 2,500 pesos a month, so $125 a month.
LADISLAS MAURICE: Property tax?
PAUL: Like, $250 a year.
LADISLAS MAURICE: Wow, that’s cheap.
PAUL: Yeah.
LADISLAS MAURICE: Yeah, so property taxes in Mexico are not like property taxes in the US and in Canada. That’s really a big advantage. The carry costs are quite low. And then you also have the trust structure fees on a yearly basis?
PAUL: On a yearly basis, you’re around $500 a year.
LADISLAS MAURICE: Cool. And then add a bit of maintenance, etc., for incidentals, and you end up in a net rental yield of about 3%. Again, this is a recurring theme in Puerto Vallarta. You don’t come here for the numbers, you come here because you want diversification, because you want a Plan B for yourself, for your family, for your partner, etc., and you just love the lifestyle of Puerto Vallarta. But don’t come here thinking that you’re going to make money from rentals. Is this a fair statement?
PAUL: Yeah, 100%. Yeah.
How to contact Paul
LADISLAS MAURICE: I wrote a whole article on the real estate market here in Puerto Vallarta, the neighborhoods that are interesting, the neighborhoods that you should avoid, etc. It’s very detailed. There’s a link below. And if you want to get in touch with Paul, there’s also a link below. He can help you find your dream property, your Plan B, etc., here in Puerto Vallarta and in the area.
All right, Paul, thank you very much for today. Really appreciate it.
PAUL: You’re very welcome.
