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Investing in the Riviera Maya

Investing in anything can be overwhelming, whether its stocks, bonds or in this case investing in the Riviera Maya real estate. Finding concise, straight forward and simple information can be challenging to say the least. The point of the following blog series, is to help you answer the most basic investment questions.

1.Why should I invest in the Riviera Maya?

2.What can I expect out of my investment?

3.Is the Riviera Maya market for me? (It might not be)

4.For the first post I wanted to start with something really simple.

History of Investing in the Riviera Maya

I don’t want to start by telling you how much the Riviera has grown from a little touristic strip on the side of Cancun to a shopping, tourism and entertainment mecca that runs all the way from Cancun down to Tulum, because lets face it you already know this. You have all heard “the pitch”.

  • The Riviera Maya receives 30% of foreign currency spent in Mexico.
  • Playa del Carmen, fastest growing city 2006.
  • Riviera Maya is the fastest growing tourism industry.
  • Tulum, the most beautiful beaches in the world.

These are just a few points of what I like to call “the pitch” they are what any agent will tell you, to pique your interest in this market.

Now I said I wanted to start simple, so lets start with the most basic principle.

The Riviera Maya Supply & Demand

Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. 

Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and the quality of service that the market receives is known as the supply relationship. Price, therefore, is a reflection of supply and demand.

Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. 

So that we don’t stretch this point any longer than necessary and so that I don’t lose your attention, I just want to explain the current situation of the Supply & Demand in the Riviera Maya.

In the Riviera Maya we have – Excess demand – it is created when price is set below the equilibrium price. Because the price is so low, too many consumers want the good while producers are not making enough of it.

Find out how and why this has paved the way for one of the best investment markets in the world in my next post next Friday.

 

 

By Robert Gutierrez

Reference: Law of Supply and Demand: Basic Economics http://www.investopedia.com/university/economics/economics3.asp#ixzz4rN9hCHnj