Costa Maya Real Estate

Costa Maya Real Estate

Costa Maya Real Estate: Mexico’s Last Affordable Beachfront Property
Part 2 of our Investment U White Paper Report
From the Investment U Research Team

Part 2 of our Investment U White Paper on the world’s two best ocean front real estate buys focuses on Mexico’s Costa Maya real estate property (Part 1 reports on Nicaragua Real Estate). You will find the Costa Maya on the Caribbean coast of the Yucatán Peninsula in Mexico. Don’t worry if you’ve never heard of it. Few have, yet you may be surprised to learn that it is sandwiched between two leading vacation spots in the Caribbean: Cancún/Cozumél, Mexico and Ambergris Caye, Belize.

The Costa Maya shares the same picture-perfect beaches and spectacular waters for diving, snorkeling and fishing that call hundreds of thousands of visitors and cruisers to these other destinations each year, yet the Costa Maya area is just now being discovered by investors.

The region got a “kick-start” a few years ago when it began receiving the attention of the Mexican government and one of its development agencies, Fidecaribe-the same group responsible for developing the Riviera Maya. Today its sights are set on the Costa Maya property, and tourism there is just beginning to climb.

In the past several years we have traveled all over Central America and the Caribbean. The Costa Maya property, about a four-hour drive south of Cancun, is one of the few places (Nicaragua being another) where several Investment U. and Oxford Club members have invested not only for short-term profits . . . but also for the long term. Many of our astute members (and staff) may soon build second homes here.

About Costa Maya

The Costa Maya is a 57-mile-long strip of prime Caribbean coastline, beginning just south of a large national park called the Sian Ka’an Biosphere and ending north of the Belize border near Xcalak (the nearest large city to the south is Chetumal). Unlike tourism-engorged Playa del Carmen to the north, Costa Maya is:

  • A still somewhat remote and unsullied tropical paradise in Mexico, on the Caribbean, south of the booming Riviera Maya
  • Friendly, stable but growing, relatively safe and relatively convenient
  • Culturally stimulating: there are several Mayan towns and ruins in the vicinity
  • Not an island, like Cozumel, which means it’s connectible to mainland utilities, etc.
  • Eco-friendly: There are many diving and fishing resorts, and nearby eco-water parks
  • Close enough to towns with shopping, movies, Internet cafés, nightlife and decent healthcare that you can quickly satisfy almost any need you may have

The Costa Maya also happens to be a place where oceanfront real estate property is still very affordable, and building costs are inexpensive. But that’s not going to last long with a limited supply of only 57 miles of coastline. The momentum down here is clearly strong: Prices have more than doubled in the last three years, and are moving every day. More beautiful beachside homes and charming small inns are now under construction or have been recently completed in the area.

Three Reasons Why You Should Invest in Costa Maya Real Estate

Here’s why everyone’s so excited about the Costa Maya, and why you, too, should consider investing here:

Reason #1: No Island Fever

First, to truly understand the investment potential of the Costa Maya, consider how the geography lays out. If you were to take a look at a map of the Yucatán Caribbean coastline, you can envision how the development has progressed down the coast in the last 25 years. Cancún and the Riviera Maya are now totally bought and built up, with an overabundance of hotels and all-inclusive resorts. On the southern end of the Riviera Maya, the small village of Tulum is starting to grow. The Costa Maya is perfectly situated to be next in line but, as you’ll also learn, not to the level that the Riviera Maya was developed (overdeveloped, really).

Yet two environmental aspects of the region make the Costa Maya notably different than the Cancun region. First, the coastline farther north, around Cancun, doesn’t have a protective reef like the Costa Maya. One of the big issues for Cancun and the Riviera Maya today is the erosion problem they’re having with their beaches. (Hurricane Isador didn’t help.) However, the Costa Maya has a barrier reef running along its entirety.

Second, the Mexican government does not need another Cancun or Riviera Maya. The Costa Maya is being allowed to develop quickly, but low-density zoning and environmental restrictions protect the area. The Costa Maya has wetlands and lagoons running along the entire coastline, so the beach real estate property we’re talking about comprises about a 0.1- to one-mile-wide strip between the Caribbean and these lagoons and wetlands. This may seem thin, but many of the top Cancun properties are also situated on a sliver of land between the coast and a large lagoon.

Reason #2: The Mexican Government is Committed to the Costa Maya’s Success

The state government of Quintana Roo, along with Fidecaribe, is focusing new attention on the Costa Maya. However, it doesn’t want another Playa del Carmen (the fastest-growing city in Mexico), nor does it want to hurt the natural splendor of the area. But it does want to improve the economy around the state capital of Chetumal. So authorities are developing the Costa Maya property as an eco-friendly area, with restrictions on building and commercial permits. Only small hotels and homes with up to three levels will be allowed.

The evidence of the government’s support can best be seen in its current construction of a paved 50-plus-mile, four-lane road that will take you to the Costa Maya coast-and to the peaceful, low-crime towns of Majuhual and Xcalak. The new main highway extends from Chetumal to Cancun. The new highway is almost finished and has cut the three-hour trip from the Riviera Maya by at least a half-hour. It is also easier now to bring in consumer goods and infrastructure.

Along with the main road project, the government is committed to bringing electricity down the coast. Power stations and towers have already been built. Telmex is starting to service the area. There is Internet access at the hotels around Majuhual and in Xcalak. Next they are bringing in the water pumps. Currently everyone uses a generator or transformer (even though some have solar power) in conjunction with a cistern for water retrieval. (We’ve been told that well water should be easily obtained in the near future, as there are three distinct levels of water tables under the entire Yucatan peninsula.)

The Government’s Goal

While the government expected to have all of the above done by the end of 2004, we have no doubts it will happen sooner rather than later. There’s just too much money flowing to this coast. And there’s more to come: A huge cruise-ship dock and beach club have already been constructed just outside of Majuhual, taking the overflow from Cozumel (which is receiving up to five ships per day!). Majuhual already gets five ships per week in the high season-a number that will surely grow.

Once the road improvements and electricity are in place, imagine how the oceanfront real estate land in the Costa Maya will be valued, given its limited supply and relatively close proximity to the United States . . . (The chart below shows how the current real estate prices per oceanfront real estate lot break down along Mexico’s Caribbean coast from Cancun to Xcalak-prices are based on premium lots with 20 meters of ocean frontage, about 50 to 60 meters deep.)

Real Estate Prices Along Mexico’s Caribbean Coast

Cancun $1,000,000 – $1,5000,000 (if you can find this one)
Playa del Carmen $750,000 – $900,000 (if you can find this one)
Cozumel $400,000 – $500,000 (non-oceanfront lots are MUCH cheaper on this island)
Tulum $250,000 – $300,000 (but watch out for Ejido land title–they will lease you the land but you never actually own it)
Costa Maya $65,000 – $220,000 (depending on where you buy and who you buy from)

Reason #3: Beyond Price-Natural Attributes of the Costa Maya

Along with the government’s commitment to infrastructure and the imminent windfall from oceanfront lot appreciation, there exists another type of return that real estate investors in the Costa Maya can expect and may come to appreciate even more than a monetary profit: the region’s wealth of natural beauty. From the area’s Mayan ruins and authentic, friendly villages to its exotic wildlife (toucans, monkeys and roadrunners, etc.), the Costa Maya offers an incredible variety of natural splendor. And that’s to say nothing of the world’s second-largest natural reef just offshore. Not only does it protect the coastline from erosion, but it provides pristine conditions for divers, like those that have lured tourists to Belize and Costa Rica for decades.

Costa Maya Real Estate Investment Opportunities

There are many opportunities for investment in the Costa Maya. Whether you are looking to build a vacation home, a retirement home, a small inn, start a tourist business, or speculate on the real estate market, there are options for you. Already there are many landowners in the Costa Maya region from the United States and Canada. But there are still many Mexican landowners that have held onto their land for generations, and are waiting to sell. Whoever you buy from, it’s important to know how each property is measured and valued.

How Lots are Priced and Measured

Even though there are only 57 miles of coastline, total, there’s some outstanding beachfront property still available. You just have to know where to look for it. From the contacts we’ve made through the International Living organization (and in our last few trips down), we found out about property that’s not officially listed for sale, but that the landowners are willing to sell. And that’s where you get the huge discount to market prices.

Property in this area is measured in meters of waterfront. The property we located ranges from U.S. $3,500 to $4,500 per meter of beachfront. A typical residential lot has 20 meters of frontage, and is about 50 meters deep. These lots range in price from $65,000 to $130,000 through local sellers. Again, you can compare that to up to $220,000 for 20 meters of frontage selling “retail” in the area. (Building costs in the area are about $55 per square foot.)

Lot prices depend on a number of factors including: the lot’s size and elevation; the view from the beach; the grade and landscaping (the fewer mangroves the better); the relative position of the beach road; and of course the seller’s asking price. Most of the less expensive lots are around Xcalak (the town just north of Belize). That is because the elevation is lower, the beaches are curvier (you get more privacy but not the expansive coastal view), and there tend to be more sea grasses and mangroves-and less surf.

The most frustrating aspect of this investment for anyone who comes down here is that the same lot you will look at today might be priced twice as high as it was only a few years ago. One reason for the surge is the real estate marketing of the Costa Maya by Transcaribbean Trust, the dominant and American-run real estate company on the Costa Maya.

Transcaribbean Trust: Paying for Peace of Mind

We can’t say anything bad about Transcaribbean’s service, other thanit isn’t cheap. It’s perfect for the less adventurous investor who wants to deal only in English. The company has set up a large, highly professional operation, and represents some of the nicest lots. It offers investors a complete turnkey package (explained below). Transcaribbean representatives will also clear and mark the lot for you. The company’s agents are courteous, organized, reliable and flexible, with offices in Cancun and throughout the Yucatan, including at the docks in Majuhual and Cozumel.

Ted Myers of Transcaribbean showed us several stunning lots on our first trips down. He mostly represents lots along the huge section north of Majuhual near the cruise-ship dock, the areas of Rio Indio and Punto Placer where the money is going. These real estate lots are postcard-perfect, but you will pay between $9,000 and $12,000 per meter of waterfront for the complete package.

Although the 20-meter and 30-meter beachfront lots in Ted’s territory will be sold at a premium (the developer has already spent nearly $1 million planting tropical palms on this land), the lots across the street will be sold at half the rate.

Unlike the beachfront lots, anyone building across the street can have a residence that is three stories high. You still have very close beach access and a magnificent ocean view. And there’s another advantage to building away from the beach-less wear and tear on the property from exposure to the elements like wind and salt.

As we explained to Ted, we loved the lots he showed us, but we had to find a better deal to make it feasible for members to invest in Costa Maya real estate. Here’s what we did

Going Local: Getting Dirt-Cheap Bargains Without the Mud

On subsequent trips we met with some local landowners to explore less expensive routes to property ownership in the Costa Maya. We also consulted with resort owners and managers, American and Canadian residents and investors, local surveyors and attorneys, and an International Living subscriber named Denis Couture who is already investing in the area and showed us some less expensive lots. We saw several beautiful lots at half the cost of the Transcaribbean lots, found out how to buy land directly, and what you have to watch out for.

Buying Property from Locals

You’ll fly into Cancun, but before you leave make an appointment with one or two people to show you lots once you get to the Costa Maya. (We’ll give you plenty of good contacts later in this report.)

We preferred to pay extra for a rental car and the flexibility of visiting lots of different areas along the coast. If you can give up air conditioning and use a car with a standard transmission, rent a Jeep. Otherwise just be sure to rent a car with good tires and a lot of ground clearance.

We recommend you stay at least one night, if not two, in the Costa Maya. (See the contact information further on in this report to find a place to stay.)

Finally, on your way back to Cancun or the Riviera Maya, assuming you saw something you liked, you’ll want to meet with a recommended attorney who has done a lot of legal work in the area. You can ask him or her further questions, or get the ball rolling on a title search-or even leave power of attorney if you want to return home and do business from there.

Keep in mind that Mexico has yet to regulate real estate transactions

Agents are not legally licensed in Mexico. So you can’t depend on the normal safeguards. “Let the buyer beware” here. Lots of tricks regarding deposits, closing prices and titles can be played. The American embassy and American consulates in Mexico are good places to start when trying to determine if a real estate company is reputable.

Choosing Your Costa Maya Real Estate Lot

Two major considerations when choosing your lot are:

  • The position of the beach road relative to your lot, and
  • The relation of the beach road to what is called the Federal Zone. The Federal Zone is a buffer zone running from the high-tide line along your beach and 20 meters landward. Like buffers in the U.S., this is no-construction territory: You cannot build your house here. You don’t technically own the Federal Zone but you can use it-just not for major construction. (Therefore it must remain a beach, but can have a dock, palapas, etc. To build a dock, you must get a beach concession, which is relatively easy to do.)

The main beach road, some 57 miles long, runs along the coast and is sandy and bumpy (rather like a very primitive A1A), hugging the shore closely. In some areas it runs very close to the beach (not desirable); in others it cuts through the back of the property (much better). That’s why when you look at lots, you have to measure the distance from the road to the Federal Zone: This gives you the allowable distance to build on the beach side of the road, although some people have built on the other side of the road.

As a resident, you’ll need a four-wheel-drive to get around quickly on this 57-mile coastal road. (This is not the paved, 50-mile road currently under construction and running from the country’s interior to the coast.) The government said that paving the beach road is the last item on its list for developing the area, so the road will be like this for awhile. But to go up and down the coast, you don’t need to take the beach road. The government has provided paved access roads running from the main inland road every 20 kilometers or so.

Other restrictions to look out for on your lot:

  • Lots of mangroves on the property-you are restricted from removing them
  • Land that isn’t suitable for construction . . . walk the property, or get a soil test
  • Building restrictions that would conflict with your plans

There is an effort underway north of Xcalak to move the beach road. Many landowners are for it since it will give them more use of the property on the beach side. We saw two developments where the landowners recently moved the beach road farther back on their land-in one case, the lots immediately doubled in value as a result. (This is not an undertaking we would advise: It’s very political.)

Two Approaches to Buying Your Lot in Costa Maya

Once you’ve identified a lot or simply decided that you want to buy a real estate property on the Costa Maya, you have two distinct options for how you can purchase property. The first is the turnkey approach, where all the details are handled for you but at a higher cost. The second is buying from a local using the help of professionals already on the ground in the region.

The Turnkey Approach

First, some of the best lots can be bought quickly, and even sight unseen, through an agency like Transcaribbean Trust (phone: 011.52.998.883.4228, or e-mail beaches @

Transcaribbean’s Ted Myers is the agent that we’d recommend. He’s a fellow Baltimore native who originally learned of the area through International Living. Ted was very helpful. He can provide a complete turnkey package, perfect for the less adventurous investor who wants to get in fast on a premium lot. The package includes title search and guarantee by the company, a cleared lot in some of the best areas of the coast, all closing costs, and all legal work. But for his service and the package, you will be buying at a premium, sometimes a 100% premium to lots you could buy directly through a Mexican landowner. Still, many investors, including many International Living subscribers, have chosen to take this “retail” package for its convenience, guarantees and the high quality of the real estate lots.

The ‘Going Local’ Approach

If you choose to buy property directly through a Mexican owner, you can get the property at a substantial discount, giving you a built-in profit. And while the premium-quality lots may be harder to find using this approach, you can find them if you spend time looking around. However, note that there is a higher element of risk involved in terms of completing the details of the transaction without complications. So, after making an offer, you’ll need to choose a Mexican attorney. He or she should be the one to draw up contracts and review the conditions and terms of the sale. Additionally, a Mexican attorney should do the title search and point out any problems that a buyer may have.


1. Once you have agreed on a price for your lot, tell the seller up front that you will walk away from the deal if the price changes.

2. Get title insurance. Even with the title search, title insurance gives you another set of eyes, and forces the attorney to do more due diligence than is normally required. We recommend First American Title. First American’s Tuie Murdock is based in Florida. She is a well-known expert in Latin American property and title purchasing, and can be conatacted at 954.839.2900, 877.691.6767, or tmurdock @

3. Have your deed translated into English by a licensed Mexican attorney certified by the government as an officially licensed translator.

Important Questions to Ask Your Attorney:

1. Is the title clear?
2. Are there any debts on the land?
3. Have all the taxes been paid to date?
4. Has the real estate property been subdivided into lots?
5. Was the property surveyed by Catastro, the government’s land-survey agency?
6. Is there a plot map available showing the lot numbers with the property lines and boundaries?
7. Is there any encroachment?
8. Is the deed you’re taking actually the deed to that lot?

Should You Set Up a Trust or Corporation?

After getting your attorney to do the title search, the next step is to decide if you want to own the property through a trust or corporation-because you cannot own it directly. Almost the entire state of Quintana Roo is in the Restricted Zone, an area along the coast of Mexico where foreigners are prohibited from owning land directly.

We believe a corporation is the better alternative. First, the trust is more expensive to set up, usually around $2,500 versus about $1,700 for a Mexican corporation, and more expensive to maintain-with annual fees of $300 to $500, depending on the value of your land. Other drawbacks are that the bank takes possession of the deed, and you have to set up a separate trust for each lot. With a corporation, you take possession of your deed, and you can buy as many lots as you like with the same corporation.

Conclusions on Costa Maya: A Leg Up on Another “Early-In” Opportunity

Now that you know more about this real estate opportunity than 99% of the rapidly aging American Boomer generation, consider acting quickly. You can still get in on Costa Maya at a substantial discount to market if you choose the more adventurous route-buying directly through a local landowner-putting yourself in an ideal situation to double your money in the next couple of years. But there’s a lot of momentum already in the region, and prices are moving up fast. (This is true all over Mexico.)

More importantly, there’s a convergence of the three economic advancements taking place in the Costa Maya right now that make this investment opportunity one that you shouldn’t let slip by:

1. Lots are being bought up and developed where there is limited supply.

2. Roads and electricity are coming in.

3. Natural attractions are being discovered daily by more and more outdoor enthusiasts, and tourists should continue to power the real estate market in the short and long terms, and send prices even higher.

The organization International Living (with its associated newsletter) set up an office in Mexico. And a Wall Street Journal article in early 2003 said that over the preceding eight months, more than $1 billion flowed into Mexico from institutional investors seeking a haven in Mexican real estate, and a lot more money is on the way.

Contacts and Web Sites

A Quick Warning: Anyone can be an “agent” in Mexico. And these days on the Costa Maya, it seems everyone, from attorneys to resort owners, are representing lots for sale. Buyers beware.

Real Estate Agents/Contacts

  • Transcaribbean Trust: Top real estate agency in the area, very reputable and reliable. Contact Ted Myers at 011.52.998.883.4228, or ted @
  • Alan Miss: (attorney Cluadia Ozuna’s husband) missalan @ 011.52.984.873.34.36
  • Denis Couture: International Living subscriber, Costa Maya investor, 248.813.4100, or mexicocaribbean @

Recommended English-Speaking Attorneys in Mexico

  • Lic. Claudia Ozuna Galeana, Playa del Carmen, 011.52.984.873.34.36, or ozuna @, or

Recommended Title Insurance

  • Tuie Murdock of First American Title (based in Florida), 954.839.2900, 877.691.6767, tmurdock @ Note: Tuie can also recommend some good English-speaking attorneys in the area.

Travel Companies/Information

International Living, a 22-year-old international travel, lifestyle and investment newsletter has established a Local Office in Mexico, managed by Dan Prescher and Suzan Haskins. They know about visas and rental cars, renting a house and hiring a maid, buying a beachfront lot, opening a bank account, and shipping your household belongings. You can contact them by e-mail at Mexico @

Yucatán-Specific Web Sites

For more online information on traveling and living in the Yucatan, check out:

Some Final Words

After reading this report, we hope you have found this excellent Costa Maya real estate opportunity as intriguing as we do. Whether you act on our recommendations or not is entirely up to you, of course.

If your curiosity is aroused and you’re thinking about taking the plunge, you might want to ask yourself if you are the kind of investor who:

  • Looks for a proven alternative to the stock market, and is willing to give up instant liquidity in return for a greater margin of safety
  • Chooses to be a “pioneer” investor-that is, someone willing to get in early, before the crowd-but only once the market is proven to be in an upward trend
  • Considers opportunities outside of the U.S. that others may view as “adventurous.” But also prefers a market that has political and economic stability, offers short, direct flights, America-friendly culture, and mostly modern infrastructure
  • Likes to buy at a discount to current market values-up to 50% below market-and is willing to do the groundwork to find out how
  • Becomes inspired by year-round warm weather, lush tropical landscapes, pristine white-sand beaches, calm turquoise waters, abundant outdoor recreation and fascinating history

If this sounds like you, you may want to move fast. Prices in the Costa Maya are set to escalate dramatically in the next one to three years. If you want to still be able to invest before this boom really kicks into gear, call your travel agent today, book the next flight to Cancun, and check it out for yourself. And good luck!