Land banking is an investment strategy that involves buying undeveloped land with the expectation of selling or developing it at a higher price in the future, thus generating a profit for the investor. This practice is based on the idea that the value of land tends to increase over time, especially in areas with high demand for housing and urban or tourist development.
Advantages of Land Banking
- High Profit Potential: The value of land can increase considerably in the long term, generating higher investment returns than other options such as stocks or bonds.
- Portfolio Diversification: Investing in land diversifies the investor's portfolio, reducing the risk associated with other assets such as stocks or already developed real estate.
- Protection against inflation: The value of land tends to increase over time, which can help protect the investor's wealth against inflation.
- Low Maintenance: Undeveloped land requires little maintenance compared to developed properties, which reduces the costs associated with the investment.
Areas with Potential for Tourist Land Banking:
Land banking has gained popularity in recent years as an alternative investment strategy in the real estate market. In the context of Mexico's tourist areas, this strategy can be especially attractive due to the constant growth of the sector in the country.
Puerto Vallarta
This destination in the state of Jalisco is another favorite among national and international tourists. It offers a combination of beautiful beaches, cultural activities, and a vibrant nightlife.
- Romantic Zone and Downtown: The historic center of Puerto Vallarta maintains its popularity. Land near this area could be interesting for boutique developments aimed at more exclusive tourism.
- Tourist Corridor to the North: The northern zone of Puerto Vallarta, including locations such as Nuevo Vallarta and Flamingos, is expanding. Look for land with potential for tourist developments that cater to specific segments such as families or retirees.
- Bahía de Banderas: This bay offers various options. Look for land near marinas or with potential for ecotourism developments focused on whale watching or water sports.
- El Tuito: This magical town, south of Vallarta, preserves its colonial charm and offers a quiet atmosphere. Investing in land near the beach or the town center could be a good option for boutique developments aimed at cultural or relaxation tourism.
- Barra de Navidad: Esta comunidad costera, al sur del estado de Jalisco, ofrece hermosas playas y una atmósfera familiar. Terrenos con acceso a la playa o cercanos a la marina podrían ser interesantes para desarrollos de hoteles o condominios.
Riviera Nayarit
Similar to the Riviera Maya, this region in the state of Nayarit has also experienced strong tourist growth in recent years. It stands out for its pristine beaches, luxury resorts, and world-class golf courses.
- Nuevo Vallarta and Bahía de Banderas: This area already has established tourist infrastructure, including resorts, golf courses, and marinas. Investing in land near existing developments could be a safe option to benefit from continued growth.
- Tourist Corridor from Rincón de Guayabitos to Punta Mita: This region offers a combination of beautiful beaches, surfing towns, and exclusive communities. Land near expanding areas or with potential for ecotourism developments could be interesting.
- Sayulita and Surrounding Areas: Sayulita is a popular destination for surfers and lovers of bohemian culture. Investing in land near this area with potential for tourist developments focused on this niche could generate significant profits in the future.
Riviera Maya and Yucatan Peninsula:
This region is one of the most popular tourist destinations in Mexico and the world. Growth is expected to continue in the coming years, driven by the construction of new hotels, resorts, and infrastructure projects.
- Riviera Maya: While technically located in Quintana Roo, the southern part of Yucatan that borders the Riviera Maya could benefit from the tourist spillover.
- Costa Esmeralda: Located north of the peninsula, the Costa Esmeralda is known for its pristine and tranquil beaches. With the increase in ecotourism, areas with access to the beach and close to protected natural areas could be interesting.
- Cenotes Route: The interior of Yucatan is full of impressive cenotes. Investing in land near magical towns like Valladolid or Pisté, which are key points on the Cenotes Route, could be an option for the future.
Baja California Sur:
Baja California Sur is widely known for its luxury resorts, golf courses, and wonderful beaches. The region attracts high-profile tourists from the United States and Canada, making it an attractive market for Land Banking.
- Los Cabos: Being the most popular tourist destination in the state, Los Cabos offers a wide variety of luxury resorts, golf courses, and tourist developments. Expanding areas could be interesting for Land Banking, especially near Cabo San Lucas or San José del Cabo.
- Bahía Magdalena and La Paz: The La Paz area and the majestic Bahía Magdalena are known for whale watching and their natural beauty. La Paz, the capital, is experiencing organic growth, and nearby areas with tourism potential could be an option.
- South Pacific Tourism Corridor: This area stretches from Todos Santos to Los Cabos, including natural wonders such as Cabo Pulmo National Park. There are plans to develop sustainable tourism infrastructure in this area, which could favor Land Banking.
Factors to Consider When Investing in Land Banking:
- Location: Location: The location of the land is the most important factor to consider. Land should be sought in areas with a high potential for tourism development, with good accessibility and public services.
- Legal framework: It is important to verify that the land has a clear title and that there are no legal problems that could affect the investment.
- Urban Planning: The urban development plan for the area should be analyzed to determine if there are future projects that could affect the value of the land.
- Investment Horizon: Land Banking is a long-term investment. You must be patient and wait for the value of the land to increase over time.
Land banking can be an attractive investment strategy for those seeking to diversify their portfolio and obtain long-term investment returns. However, it is important to conduct careful analysis before investing in undeveloped land, taking into account the risks and factors associated with this practice.
