Homeowners     14 Jun 2023

Puerto Vallarta Real Estate Investment: 3 Neighborhoods with the Highest Returns

If you're on the lookout for exciting Puerto Vallarta real estate investment opportunities, then you're in for a treat. As vacation rental experts here in Puerto Vallarta and the Banderas Bay, we are your go-to source for maximizing your investment’s returns. 

In this post, we’ll dive into the world of short-term rental real estate investment in Puerto Vallarta. We will highlight three neighborhoods you should invest in if you’re looking to start an Airbnb/vacation rental business and break down why those neighborhoods yield seriously impressive returns. 

Puerto Vallarta Real Estate Investment

Scroll down to the end of this post for a Q&A with local realtor, Dyani Leal, who will break down the ins and outs of Puerto Vallarta real estate investment. Prefer to watch the video? You can also hit play on our YouTube video above.

Now, let’s get into the three neighborhoods we recommend for short-term rental real estate investment in Puerto Vallarta.

1. Zona Romantica

Zona Romantica, Puerto Vallarta

First up is Zona Romántica, or the “Romantic Zone” in English. It is located just south of the Historic Center and it hosts some of the most successful short-term rental buildings on the South Bay. The neighborhood is a hub of entertainment, art, and nightlife with a vibrant mix of trendy cafes, art galleries, and lively bars that keep guests coming back. With beautiful beaches like Los Muertos, Beach, limited hotels and great new condo developments, Zona Romántica is a major hotspot for vacation rentals on Airbnb.

2. Hotel Zone

Hotel Zone, Puerto Vallarta

Next up is Puerto Vallarta’s Hotel Zone. The Hotel Zone is an excellent place to invest in an Airbnb due to its high demand as a popular tourist destination. It's only 20 minutes from the airport, but it sits on the beach, which gives you the best of both worlds. You can easily explore popular beaches and the city and enjoy all of its attractions, making it an ideal place for tourists wanting to explore both sides of the city.

3. Marina Vallarta

Marina Puerto Vallarta

Finally, we have Marina. Marina is an upscale neighborhood that boasts stunning views, great beaches, and a promenade lined with shops, restaurants, and entertainment options. The Marina is only 10-minutes away from the airport and offers world-class golf courses and very high end buildings, ensuring a steady flow of affluent visitors seeking high quality accommodations. We highly recommend investing in Marina Vallarta if you are looking to maximize your short-term rental returns in Puerto Vallarta.

In summary

Puerto Vallarta presents an incredible opportunity for real estate investment, particularly in the realm of short-term rentals. The three neighborhoods we highlighted—Zona Romantica, the Hotel Zone, and Marina—each offer unique advantages and exceptional potential for high returns. 

Zona Romántica's vibrant atmosphere, artistic appeal, and proximity to beautiful beaches make it a hotbed for vacation rentals. The Hotel Zone, conveniently located near the airport and situated on the beach, caters to tourists seeking both relaxation and city exploration. Lastly, Marina Vallarta, with its upscale amenities, picturesque views, and proximity to world-class golf courses, promises a steady stream of affluent visitors in search of top-notch accommodations. 

Whichever neighborhood you choose, Puerto Vallarta's real estate market holds immense promise for maximizing your short-term rental returns.

Timothy Real Estate Realtor, Dyani Leal, with Naya Homes CEO, Humberto Pacheco

For further insights and guidance, keep reading below for our Q&A session with local realtor Dyani Leal, where she delves into the intricacies of Puerto Vallarta real estate investment. 

Humberto: Hi Danny, how are you doing? 

Dyani: Hi, Alberto. Good. Nice to see you.

Humberto: So you've been here for six years now and you know the market really well. Tell us a little bit about the type of clients that you're seeing buying in Puerto Vallarta now. 

Dyani: So there are two main groups of people that I serve as clients. One are people who are looking for their dream retirement home, either to live in for part of the year, or most of the year, or the whole year full-time.

And then the other group are investors; younger, older, national, international. There's a wide range of investors who are very interested in the region. 

Humberto: Yes. I mean, what's not the love about retiring in Puerto, right? Let's talk a little bit about why you think Puerto has become such a hot investment place

Dyani: Well, there are three main reasons: One, you might know a little bit about yourself, and that is the short term vacation rental income potential. So, as you know, Puerto Vallarta is hot right now, with an average hotel occupancy rate of 85%, which makes it the top beach travel destination in Mexico.

So obviously, you know, a place like that where accommodation is in high demand, you can generate a lot of revenue through rentals and probably a bit more than you might for a long-term rental in the US. But the buy-in is a little bit lower

Humberto: You're totally right about point number one. We're seeing it with our clients. They're having higher rates, higher occupancy, not only in the high season, but also through the low season. So we can tell Vallarta has become that number one spot in Mexico. But tell us a little bit about the buy-in. 

Dyani: Yeah, so the median sales price for a condo—which is 75% of the market right now—is

US$334,000.

Humberto: Wow—$334,000. Definitely a great price point compared to the United States, and with awesome returns. 

Dyani: Yeah. I mean, of course there's a wide range. It depends where you're buying and for some, you know, the buy-in is a little bit higher and so are the returns. And so it depends which region you're investing in, but that's what you're kind of looking at—the median.

Humberto: So, Dyani, tell us a little bit about the appreciation investors expect in the region. 

Dyani: Yeah, so that's the actual second biggest attractive factor for investors right now. The year-over-year appreciation rate average is 27% between condos and houses in both the Bandaras Bay and Puerto Vallarta. So, compared to the US national average, which is currently about 14%, you're getting a little bit higher of return on your investment.

Humberto: And tell us a little bit about inventory. There's a lot of pre-construction, a lot is going up. How does that work for investors? 

Dyani: So that is the third biggest thing that investors are really interested in. In the past three years, out of all condos sold, 62% were in the pre-construction phase, which is the majority. So, you know, you're looking at a lot of development happening right now. Puerto Vallarta is growing significantly and there's a ton of development opportunities to purchase in the pre-construction phase.

The developers will offer huge discounts. Up to 30% if you have the cash. So if you have the liquidity available, and you're willing to invest in that, that's going to be a really great option for you because you you're going to be cutting it, you know, 30% or even more because the prices are pre-programmed to rise throughout different phases in the construction process.

So if you buy in early, you're gonna see a really high increase. What a lot of people do is they will re-sell the second the developer sells out and the prices shoot up. Or you can hold onto it and just watch it continue to appreciate and get those short-term rental yields that are amazing. 

Humberto: So Dyani, what's the biggest challenge your clients face when buying here in Puerto Vallarta?

Dyani: Well most people don't live here full-time. A large majority of them aren't from here either. So they have to navigate a lot of those details. You know, being a foreigner purchasing property in Mexico.

It’s a big challenge for a lot of my clients. Also, once they actually buy the property, they need to deal with the actual management of it. They need somebody that’s trustworthy and has great communication, that receives their guests the way that they would.

If you are interested in buying or selling a property in Puerto Vallarta, reach out to Dyani Leal:
Phone: +1 215 900 3787
Email: [email protected]

If you are interested in working with Naya Homes property management, fill out the form below.

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