How to increase rate of return on your vacation property

how USD CAD exchange rate helped to make money on mexican real estateWith recent spike in USD-CAD exchange rate my Canadian clients enjoyed a healthy return of at least 10% in past 6 month on their Mexican properties.

Let me explain. Real estate prices in Cabo San Lucas are in USD and when my clients purchased real estate here they paid in USD. In past 2-3 years the exchange rate for USD-CAD  was close to par, but in a summer of 2013 the USD start climbing sharply and  as of today sits at 88 cents. Some economists predict that USD-CAD exchange rate will return to pre crisis level of 80 cents meaning further gains of  9% from here. This is how investors are able to increase rate of return on Mexican properties without any price increase of underlying asset.

If foreign exchange market will return to pre crisis level, Cabo properties will gain an additional  20% or so due to USD and Mexican Peso exchange rate. Currently we sit around $1 usd = $13 Peso exchange and we used to be at $9 to $10 range before the financial crises. If we get back to this exchange rate the price of labour and materials will increase and real estate prices will follow.

If you would like to explore investment opportunities in Los Cabos please contact me and I will be happy to assist you.