Right now, there is a wonderful – but limited – opportunity to make a “ground-floor” investment in Puerto Vallarta real estate. Puerto Vallarta is one of Mexico’s hottest real estate markets right now, and it doesn’t show any signs of slowing down.

Puerto Vallarta established itself as a city more than 150 years ago, although it has been an anchorage for ships for more than 400 years. The population of Puerto Vallarta is about 350,000 right now, but it’s expected to jump to more than 600,000 by 2015. What’s behind the big jump?

Puerto Vallarta has been a favorite tourist destination for years, but it’s also quickly becoming a retirement destination. Mexico has recently replaced Panama as the number one retirement destination because of its economic strength, its close proximity to the US and its low cost of living.

The real estate mantra of “location, location, location” rings true in Puerto Vallarta, but for the investor, it’s also tempered by timing. Right now, land is still incredibly affordable, but within a short time – a few years at most – property prices here will be outlandishly similar to property prices on the US West Coast. Developers are already here building high-rise condominium projects and have priced some units in the $1 million range.

Puerto Vallarta real estate has appreciated at the rate of 10 percent per year for the past 10 years. This rate of appreciation is expected to continue for at least the next five years. After that, when the land has been fully developed here, the appreciation rate could be even higher for the select individuals who own Puerto Vallarta real estate.

Affordable Pacific Coast real estate doesn’t ever last very long. Federal law in Mexico also limits the amount of coastline that can be developed or held by foreign owners. This could be the last major opportunity to own land like this near a major city on the North American Pacific Coast. These factors all combine to make the timing of the purchase of Puerto Vallarta real estate as important as the purchase itself.

Photo Credit: Peder Fugl