Condos in Playa Del Carmen — The popularity of the Riviera Maya has spurned a lot of development over the years. This has led many to purchase new condos and enter the real estate market.

Why are Older Condos Hard to Sell in Playa Del Carmen?

It seems really easy to buy real estate in the Riviera Maya but when you go to sell, it seems hard. This is one of the things that nobody mentions or talks about here, but we will. Property owners that want to sell an older unit might have to wait a while, search harder to find a listing agent, and might have to eventually reduce the price to sell the unit. Why is selling a resale property hard to do? There are some good reasons why, lets dive deeper into the real estate market and the conditions that affect the prices and speed of sales.

Note: We do not sell real estate, but we do make videos and write articles to be informative to our readers. When possible, we provide good local resources for our readers so they can use reputable services and people. We have articles about rental agents, good transportation services, real estate agents and other services so our readers can have better service and make better informed decisions.

First off, the Real Estate Market is Different than Most Places

In most real estate markets, there are more preexisting homes with very few presale units available. The Riviera Maya is a fairly new place with a majority of buildings being built in the past 20 years. The population has been growing exponentially and investment in the area has been pouring in for years, fueling a construction boom. Each new building is bigger and better than the last, leading people to look for the latest trends to invest in. This has led to rapid style changes and a big difference between older and newer construction.

Most real estate sales are new construction (presales) in the Riviera Maya. So, a majority of new buyers are going for the newly built or soon to be finished condos. Most advertising, online, on billboards, and on realtor websites are for presales. Hence promoting these types of sales, but more on that later.

Real estate in the Riviera Maya is mostly done with cash sales. It is very rare to have a mortgage. Getting loans are very hard and often with high interest rates. Because of this, most of the market is cash sales and this provides some stability in the market without bubbles. Real estate prices move more slowly and have less swings in prices like other markets.

The Natural Cycle of Property Buyers to Playa Del Carmen

It is important to understand the market first to understand why some properties sell better than others in the Riviera Maya. So, let’s take a look at the average buyer coming to the area.

A large majority of buyers to the Riviera Maya are looking for a property that they can rent out while they visit a few times a year. Then many of those same people plan on retiring to the area in a few years and living in their unit. This is what we hear from readers all the time and it is as if they all have the same plan.

Why More People Like New Properties Over Resales

As mentioned above, many people looking to buy in the Riviera Maya are looking to do so as an investment. Investors often take into account the following factors when considering a property.

Investors look for money making properties. Newer condo buildings are usually more attractive to short term rentals. These newer buildings appeal to more vacation renters because of latest amenities, nice designer and clean feel to them. Newer condos are also usually in a trendier area.
Maintenance. These costs are more fixed with newer properties. As properties age (especially in near the ocean with its climate) there are large projects that need to be tackled. for example, replacing air conditioners, roofs need to be resurfaced, security upgrades, wiring replaced, and external maintenance. Also, some of the maintenance costs are deferred and HOA fees might be going up or they are gearing up for larger projects. Investors also consider that newer condos have fewer issues that come up with renters since everything is new.
Renovation costs. It is pretty easy to see in Playa what condos were built 10 years ago because of the style. Older tile styles, floor coverings, lighting, and cabinetry are things that a potential buyer needs to factor in when looking at older units. These types of upgrades can be harder for first time buyers to the area since they are unfamiliar with how to get work done and finding people they trust.
Sometimes, older condo complexes develop problems with the management. This can happen when funds are not spent well, collection is not up-to-date from owners or the management is not doing a good job. This usually happens with preexisting condo buildings.
Financing options. Most properties in the Riviera Maya are cash sales. With some presales, there can be a payment structure set up where you put down a deposit and make payments as construction progresses. Very few preexisting condo owners will offer any type of financing options. This difference might move buyers toward the purchase of a newer property that offers some different payment structures.
Buying presale can give you some options to customize your property at no additional cost or minimal costs. If you want to change the countertops for example, it can change to a different material at the same price or upgrade to a better option. Even upgrading a presale condo is cheaper than remodeling a preexisting condo because there is no demolition and no need to look for workers. it can all be handles in your contract.

Why Older Properties Sell Slower

Here are several reasons why older properties sell slower than new properties in the Riviera Maya.

Some owners price the units too high or expect too much. There are several reasons for this. Property taxes in Mexico are very low compared to most places. This means that sitting on a property and waiting for a higher price is easier. There is not as much motivation to sell.
Some sellers expect the value to raise at a greater rate than reality. The value of most property is in the return on rentals compared to the value of appreciation. See our article about property appreciation in the Riviera Maya for more details.
Developers and real estate agents advertise new construction all the time. New construction projects are all over billboards and there is a great advertising budget for new construction.
Investors want more rentable units that are in popular areas and have new finishes. Newer units often mean less maintenance.
As condo buildings age, they become more long-term rentals or even rentals for locals. Some areas even go downhill, and rents drop. Just as one example, there was an older condo building on the south end of Playa that has units for sale. The building had mostly locals living in the building, the hallways had bikes, boxes and grills in them, making it look junky. There were even eviction notices on few doors. The condition of the building made it very undesirable to rent as a vacation property. This was in stark contrast to years before when it was a popular building for expats to purchase a unit in. Needless to say, units for sale took a while to sell. the units eventually sold, but for about the same price as they were purchased for 10 years earlier. This is an extreme example, but it does show how the cycle of a building and area can change a great deal and affect how the units sell.
Real estate agents often will say they don’t sell resales. So, it can take time looking for a listing agent. See below for the reasons.

Luxury rental in Playa Del Carmen — New condos offer stunning views and more and more amenities that older condos do not have.

Why real estate agents don’t like taking resales

The semi standard commission in the Riviera Maya is 6% for real estate sales. Since a large portion of sales are presales or land, the commission rate is around 6%. Developers like to offer incentives, and this is priced into the asking price of new condos.

So here is what happens when you go to list your property. You contact an agent and ask to list your property. If they accept this, most likely they do not have a client looking to buy your exact property. So that means another agent will come forth with a buyer. So now the commission is split between the two agents 50/50. Depending on if the real estate agent is independent or works for an agency, the agent also splits this with the agency.

So, in general the commission for a resale is 1/2 of what it is for a new property. This is incentive enough for a real estate agent to steer clients away from buying a preexisting condo.

Preexisting condos are also a little harder to show. Either they are still on the rental market, and you might have to schedule showings. It also takes longer and there are fewer people looking for older units. So, it can be more work for an agent as well.

If you are selling an older condo, it is important to think about this and talk to your real estate agent to make a plan. This way your property is promoted, and you have a better chance of selling it faster.

A Few Bright Sides to Selling an Older Property in Mexico

We have always said that older condos have more square meters than newer condos. Prices of condos have not changed a great deal in the past few years, but actual size of units has. Older units can appeal to people looking for more space or a better price per sq. meter.

If you bought your condo (early in the process of presale) years ago, you will most likely have a greater appreciation than those that were last to sell. For example, condo buildings that just start selling units will offer them about 20% less than the final units for sale.

Now with a tighter market, there are some developers going bankrupt or not finishing projects. There is a chance of legal hassle for buyers if you don’t use caution when working with new construction. Buying something that is already built and ready to move in to eliminates any of the risks associated with presales.

Conclusion

So, what should be your takeaway from this article? We hope the details about how the real estate market works here is helpful. Here are also some tips for buyers and sellers.

Future Buyers

If you are looking for an investment property, keep in mind that selling it at a later date can be more difficult.
It is important to buy a good place so you can benefit either from an investment standpoint and/or holding its value.
If you are looking to live in the area, older condos usually offer a lower sq meter price and more space.
Quality built construction holds its value better than the cheaper condos (100k-150k).
Be careful buying a highly stylized condo of building. These can age very fast and lose appeal.
You get the most out of a property by renting it out rather than counting on a large appreciation.

Sellers

Keep in mind there are a lot less people looking for older condos.
Price your unit competitively.
Be prepared to work with a realtor, even offering more for the commission.
Have as much information ready as possible for potential buyers. Things like maintenance records and things you did to upgrade your unit.
Don’t put yourself in a position where you need to sell fast. This only sets you up to accept a lower price.

For more articles about real estate, see the tab above “Living in Playa” and under that “Real Estate“.