Should you buy a house in a fraccionamiento in Mexico?

What is a fraccionamiento?

If you look at the photo below you see how Playa Del Carmen has grown inland in weird square patterns? These are mostly all planned developments done by different developers. Fraccionamientos are private planned communities that have apartments, houses, and/or town homes. Usually, the same style is used throughout the development,

Who normally looks at buying in these neighborhoods?

Normally these types of developments are for Mexicans. The way the system works in Mexico is this, since there is a bad credit score system in Mexico, workers get credit towards taking out a loan for a home from their jobs. This system is called Infonavit. You might see signs for it or have heard something about it, but as far as foreigners go, this is not available for them. Since this is the main credit/loan system for buying a home in Mexico, a bult of new home buyers in Mexico buy in these developments. The range of entry level prices allows Mexicans to enter the property market and work their way up in a way that is not possible in many countries.

Because these developments tend to be entry level homes or an affordable option, foreigners have started to look at this option. Foreigners looking at these places has increased in the past 8 years or so. Even before the pandemic, mobile work was allowing even younger people to travel and work remotely. More families have moved to Playa in the past 8-10 years than ever before. Most of the time in the 90’s and early 2000’s it was only retired couples mainly coming to Playa. With the boom of families moving to Playa, condo life was just not going to cut it and people started to look at buying a house.

Families like fraccionamientos because they offer an affordable option to living in Mexico. Often these developments have private parks, pools and services within them to offer a package of quality-of-life items that make for a decent community.

Are fraccionamientos a good investment?

Most people looking to buy in these developments are looking at them because they offer more space than a condo and perhaps offer more of a family friendly vibe. This means that you are probably looking to live in the area and not as inclined to rent out half the time. Fraccionamientos also are built on areas surround city centers and new areas of the city that are farther out. For example, in Playa Del Carmen most of these types of developments are on the other side of the 307 Highway. You will find some of these units for rent on Airbnb and other platforms, but this does not mean they rent well. If offered for rent, often it is long term or for locals to rent.

Appreciation of the units are based on the neighborhood and not the actual property. With so many of the same units in one area, prices are often based on how popular developments are. Things like construction quality, parks, services, and even quality of life issues like street flooding can be a determining factor in the overall value of your unit. Prices do rise over time, but not like appreciation in some other areas of real estate. The return on investment is also much lower with fraccionamientos compared to condos and properties in the center of town.

What are the disadvantages of buying in a fraccionamiento?

Here is a list of things that you should consider when thinking about buying in a fraccionamiento.

The actual lot size for most homes is very small. Most backyards are 5meters by 5 meters or less. This is compensated by public spaces but expect less personal space.
Because space is limited, you are going to be close to your neighbors. This means sound will be an issue.
Low availability to rent out if you want to make some income. Most low to mid-range fraccionamientos are not neighborhoods where tourists would rent. Even though many of these developments say they are only 10 minutes to the beach, that is actually very misleading because all of Playa is 10 minutes to the beach. But then you have to find and pay for parking and get to the beach. It just is too much for tourists to deal with. See our guide on where to stay in Playa Del Carmen.
Most of the time you are going to have to shop on your own for these types of properties. Real estate agents don’t usually show these because each development has inhouse salespeople. Commissions can also be very low for the amount of work that is needed. So, most people that end up buying in a fraccionamientos speak Spanish or have someone help through the process or find a salesperson that speak English and is familiar with how to set up the paperwork for foreigners.
Appreciation is slow for this type of real estate. With 100 of the same homes in the same area, you are ties to how the neighborhood is, location, services, maintenance and overall condition that all your neighbors leave their homes. Fraccionamientos appreciate, just usually a steady low raise over time.
There are maintenance fees for public spaces and upkeep. This is common with other properties like condos, but it is something you have to figure into your monthly budget. Only if you buy an independent standing property will you avoid these monthly fees.

What should you look for when looking at homes in these neighborhoods?

Fraccionamientos come in different sizes and styles. So, it is important to know what type of community you are buying into. The most basic thing to look at is what other phases of the same neighborhood look like after they are all moved into. Some of these developments allow storefronts to be added to homes and others have strict policies to regulate how a neighborhood will look like.

Touring the model homes in a fraccionamiento

Perhaps you have driven around and are familiar with some of the fraccionamientos in the area. You now want to go talk to someone and see the model units that they have. Often at the entrance of the neighborhood there is an administrative office, sales office and some sample units. When you walk in, you will be assigned a salesperson who will talk to you and then show you units. Often there are several styles of units available in one fraccionamiento. Often there are small apartments, town homes, stand-alone houses or row houses.

The samples units are often not part of the regular development, which means they are separate stand-alone units. This also means you will not get to feel and hear how these units are in real life. Often in row homes or apartments, you can hear through the walls. This is important to check because we have been in some rowhouses where you can hear your neighbors go up and down the stairs like it is in your house. If possible, look at units that are finished that are real units that you can purchase. This can give you more of a feel for how the units are.

Get ready for great air-conditioning. Often model units have the air-conditioning jacked up, so you feel relaxed and impressed with how comfortable the property feels. This will give you a false sense of how well these units were made and how it will feel when you live there. Fraccionamientos are basically concrete boxes that sit in the sun all day. To maintain the level of freshness in the model units you would have to pay somewhere between $100 USD-$250 USD for electricity monthly. This goes will about all real estate in Mexico. If you want to live with ac on all the time, you are going to pay for it, and it is worth looking into energy saving ideas.

fraccionamiento Playa Del Carmen — One of the apartment buildings under construction in a fraccionamiento in Playa Del Carmen.

What is included and what is not included

This is where your tour is going to get difficult. The sample units are decorated and have all the extras added. This can be so much so that you might find it hard to keep track of what is included in the unit price. It might not be that obvious to you as well, especially if you are new to the market of fraccionamientos.

Things like kitchen cabinets, closets (meaning the doors and shelves), toilet seats, appliances, ac units, light fixtures and even tile might not (and usually is not) be included. These units are often barebones. Be aware of this when looking at units. Yes, there is a reason why they can offer units for less than $50,000 USD.

Below you can see a sample bathroom that comes with a unit that costs about $60,000 USD. There is no shower curtain, no sink base and exposed plastic tubes. You might want to put something on the window to block the view and maybe upgrade faucets and handles.

properties in Playa Del Carmen — Some properties have an inexpensive price but come with just the basics.

What are some of the better fraccionamientos in Playa Del Carmen?

There is a wide range of price points for fraccionamientos, different regulations and locations. So, the popularity of some areas is much more based on value, location and quality of life.

Probably the most popular for families is Residencial Los Olivos (see main photoat the top). There are many phases of this development, but in general the location, price, and quality are attractive to many foreigners. A little more upscale is La Joya, Bambu and Allegranza Residencial are all behind Centro Maya shopping mall. These are newer areas and are close to an international school and shopping while being in a quieter area of Playa.

For young couples Punta Estrella is popular for the location and style of units. Real Ibiza is a young neighborhood with lower prices than other good options for young couples.

For older couples the fraccionamientos of all phases of Bali, Bambu, Selvanova and probably the most popular is El Cielo. El Cielo does not feel like a regular fraccionamiento because it has different developers within the development and independent properties also.

In general, the older fraccionamientos east of Avenue Petempich have older trees and are more settled neighborhoods. The location is closer to things as Playa develops further inland. Santa Fe is a good example of an older fraccionamineto that people like because of the location, plants and value.

Some of the worst fraccionamientos in Playa Del Carmen are:

Some of the least popular fraccionamientos in Playa Del Carmen are Villas del Sol. This is a huge fraccionamiento with many different phases. It is one of the farthest from the center and one that has more crime.

La Guadalupana is an older fraccionamiento that has not aged well and looks pretty beat up. It is known as being one of the least desirable areas to live.

Mission de Las Flores, and Villamar 1, are among the average and not so popular developments in Playa Del Carmen.

Conclusion

We hope we have answered some of your questions about fraccionamientos and what some of the drawbacks are and advantages. For more about real estate in Playa Del Carmen we have many articles and videos on our website. Here are some of the highlights: