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LIFESTYLE If your ideal lifestyle includes tropical weather, a beautiful environment, and a lively social atmosphere, few places on earth can compete with Cancun, Mexico. Cancun is built around tourists, so there are opportunities to do everything you can associate with a tropical vacation – snorkeling, fiestas, excursions to Mayan ruins, shopping, world class golfing, etc.

The 18 mile hotel strip was designed so that tourists would never have to leave. Cancun is a world-renown culinary center where and one can taste food from a different restaurant every day for over a year, with over 500 restaurants along the hotel strip. There are thousands of species of marine life that you can observe, or simply visit the aquarium to swim with dolphins or sharks. If a permanent tourist lifestyle does not appeal to you, you can find beachfront properties south of Cancun that are quieter and less expensive.

A key advantage to Cancun is its proximity to the US. If you wish to travel back to the states it takes only about 2 ½ hours to fly direct from Cancun to Atlanta or just over an hour and a half from Cancun to Miami. Cancun is a great base for all kinds of adventures in the Yucatan region. Day trips can include archeology excursions to the Mayan ruins, spelunking in the lagoons, or snorkeling and scuba diving at the nearby Great coral reef, one of the most famous in the world.

The Yucatan peninsula offers some of the most diverse land features from lagoons to coral reefs, and a wide range of sea creatures that inhabit the Caribbean. It is just a short 42 mile car ride south to the picturesque town of Playa del Carmen, and a short ferry ride across the Caribbean to Isla Mujeres. Golfers can play at the Pok-Ta-Pok course, Hilton Cancun Golf Club, The Golf Club at Moon Palace, The Golf Club at Playacar in Playa del Carmen amongst others.

INFRASTRUCTURE

With $3 billion spent in 2007 by tourists in Cancun, the government can afford to maintain a quality infrastructure that includes water, police, sanitation, electricity, and roads. Ongoing infrastructure improvements should occur as Mexico seeks to highlight its prized jewel. Moody’s gave the Yucatan peninsula an investment grade of A2, which will help attract more foreign direct investment into infrastructure improvements. Cancun should resemble world class cities such as Dubai, in which the city far outpaces the rest of the region in infrastructure advancements.

The tap water is generally not safe in Mexico since the water source is near the ground where it is easily contaminated. However, purification facilities can eliminate this problem for those lucky enough to have this feature. The scarcity of fresh water in Mexico is a concern, especially in high density locations. The quality of the sewer system is heavily tested by the huge population and its proximity to the beach, and it worsens as you leave the hotel zone.

Cancun has a busy international airport with flights taking off for the US several times each hour. In 2007, $100 million was invested into adding a third terminal and a record 11 million passengers passed through. You can take Highway 307 down the cost to less populated and less expensive locations like Playa del Carmen and Tulum. Highway 307 stretches all the way down the Yucatan peninsula to the southern border of Belize. Due to the large tourist population, the bus system is extensive and can get you almost anywhere you want to go. There are several supermarkets throughout Cancun, including American chains like Costco and Wal-Mart. Wal-Mart, the dominant retailer in Mexico with almost 900 stores, is known for its top-notch logistics systems and quality of products at low prices. One can find virtually the same goods as can be found in US and Canadian supermarkets.

OUTLOOK AND PROJECTIONS As the tourism capital of Latin America, Cancun will generate significant returns on your investment for the following reasons. According to United Nations World Tourism Organization, international tourism is expected to double from 800 million in 2008 to 1.6 billion in 2020. This will lead to continued increases in the price of rental units in Cancun, but with the consequence of more crowding. Even with an 18 mile hotel zone, occupation rates exceed 80% in some months and, as available beach real estate supply reaches its limit, values could skyrocket.

Cancun will continue to receive volumes of foreign direct investment, which will also favor appreciation. Cancun requires a higher level of investment due to current market values and since it is more mature than most other markets in Mexico. However, Cancun also provides the benefit of strong infrastructure that developers seek in a new development. Even though investments in immature markets have the potential to grow at a faster rate, they can also die quickly if the government halts its infrastructure investments. Cancun is a safe bet because it is an established destination with dependable cash flows for rentals.

The growth in Cancun will also result in tremendous opportunities in the surrounding areas such as Playa del Carmen and Tulum, which will benefit from overflows from Cancun. If you own a condo near the beach, you should be able to generate good revenues by having a property management company rent it out for you while it continues to appreciate. According to Fonatur, it intends to further invest in tourism facilities that will complement the already existing offerings to include additional golf courses and marinas in Puerto Cancun and Cozumel.

Several variables such as baby boomer retirement, growth of upper class in Mexico and other emerging countries, and global demand for tourism are favorable to a strong market in the future. Cancun is considered an international tourist destination, and home prices are lower relative to alternatives in this class such as Hawaii and Dubai. A good segment of the 76 million US baby boomer retirees will be attracted to living in an established destination with an abundance of activities to keep them busy. The main Cancun beachfront is not likely to appreciate as strongly as less developed areas of Mexico, but for many retirees, the benefits of living in an established vacation spot may outweigh the lower return on investment from property appreciation. For those seeking an opportunity for investment growth and more affordable real estate, there is room for development along the south of Cancun in areas such as Playa del Carmen and Tulum. Cancun truly offers something for everyone.