Cryptocurrencies can now be used for the purchase of property in the Riviera Maya. Whether you’re purchasing land, a house, a condo, or putting down a deposit on a pre-sale, crypto is now an option for payment.
To help us better understand what is available with respect to cryptocurrencies we spoke to André Dupont, Evoke’s resident expert on crypto. We asked him some of the most common questions that we receive from clients and potential investors.
Tell me about your background in crypto.
André Dupont: I’ve been involved in crypto since 2016. I’ve done a master’s class on crypto, so I’m pretty technical on some levels, but more architecturally. And in terms of Evoke, I help confirm if they have crypto transactions, kind of like give some insights on it, maybe train the personnel at the offices.
How many more people now are interested in using crypto as a means to pay for real estate?
It’s been increasingly strong. And we can see the difference in the we can call the last bull market of the last market expansion of crypto, which was 2016 to 2018. And the ecosystem at the time was really solidifying. Real projects were coming in. A lot of people made a lot of money.
And then the crypto winter came. And now since 2018, let’s say 2019. And now in the past 2022, were really areas of growth where the era of DeFi came in, decentralized finance. More and more people are holding crypto, and they either want to invest directly from their crypto into real estate, or they might want to lend and keep their crypto and make an earning on that crypto and put that into real estate.
So there’s two ways people want to get into real estate, and the enthusiasm has never been higher. There’s multiple projects and brokers that have been trying it. And now, finally, we’re seeing solutions that bridge crypto to the real estate world.
Describe some of the solutions. What’s being done to bridge those two together?
First thing that has been done is real estate tokenization. So you take a building, let’s say it’s worth a million dollars, and separate it into a million tokens. There could be a fungible sort or different, all different than what some people call that NFT, and they would sell that parcel to the buyers. So each person has a part in equity in that building. This has to be done in very specific legal frameworks, because in some legal frameworks, such as the US or Canada, it’s considered a security. So you have to go through certain deposits to do that in a certain way.
There are other jurisdictions where you can do that. They haven’t stipulated any regulation or they have regulations that allows that. But it’s not commonly used because it’s always restricted to one country, because it’s a security. So when it’s security, you have to deposit in every country you operate in. That’s why this model was popular at first, but now people do it very differently because it’s been regulated. And you need to deposit security, which is much more expensive and which is very different than what a cryptocurrency is.
The other thing is to purchase real estate directly with the cryptocurrency. Depending on the regulation of each country, if you’re receiving Bitcoin, you need to put a value right that the noatry has to receive the funds, confirm he has the funds, and exchange the funds on the title. And some lawyers are like that. So depending on the regulation, it might be simpler or it might be a bit more complex. So maybe some countries will accept receiving crypto, but the lawyer or the notary needs to have the tools for that which most of them don’t.
What we’ve seen lately is that some agencies were accepting the deposit when you purchased a $200,000 US dollar condo in Tulum. Or in Playa del Carmen, you can put a $5,000 deposit on it. You could pay with Bitcoin and the deposit would be done through the broker. So some facilities allow that. That’s one product that’s out there. Another product that’s out there that’s specific to the region of Mexico is that you’re able to transact with a financial institution (or fintech).
So it has some regulatory items to go through. And basically the person can go through that deposit, the Bitcoin or whichever cryptocurrencies they have it’s exchanged in either Mexican peso or US dollars, depending on what the notary and seller wants to receive. And then it’s sent from the fintech to the notary. So this simplifies the solution. So there’s these three ways to use crypto to purchase real estate.
What’s available right now in Riviera Maya for people who want to purchase with crypto? What kind of developments, what kind of properties? Can you buy land? Can you buy condos houses?
Yes, you can buy all three. The Riviera Maya is very great market. You can purchase land, you can purchase pre construction. You can purchase the condo and you can purchase a house and eventually could be even purchasing a hotel. Depending on the situation, there’s some hotels for sale as well.
Could you quickly describe the steps that are involved taking crypto and let’s say someone puts down a deposit on a property. What are the steps involved in moving that crypto to a deposit on a development or down payment?
If the developer already has the terminal, it’s just as you would do with a normal wallet. You would have your QR code and they would have a QR code. You scan and you send it to their wallet once it’s confirmed, it’s like a payment processor. So they would say, okay, send this amount of this crypto today, let’s say it’s Bitcoin or Ethereum, and it’s equivalent for, let’s say the deposit of $5,000 us. So it’s a normal crypto transaction. You take your wallet and then you scan, send it to that address. As soon as they receive it, it’s confirmed deposited into the agency’s bank account. And they could put the deposit for the person onto that project. So that’s one way if they were to pay for the full balance, then it’s the way I explained just before. So they deal with this specific service where you send your crypto to, they transfer it to Mexican peso or US dollars. It goes into that fintech company in their bank account, and it’s a normal wire transfer to the notary like that. It’s very transparent for all parties. It’s very simplified. They really made it simple for everyone because normally it’s a bit more complex.
In your work with real estate, here what tends to be the biggest questions that people have regarding crypto right now for purchasing real estate. What do people know the most?
The first and foremost questions are: How can I purchase a property with crypto? Can I pay rent with crypto? As an owner with property that I’m renting, could I receive crypto for rent? Those are the main questions people are asking.
What kind of trends do you expect to see for crypto over the next year? Specifically here in Riviera Maya, regarding real estate, where do you see it going?
I see it very positive. I think all the developers right now are looking out to be more competitive. If they don’t have it, they’re looking for it right now. And on the other side, if they can receive the full payment, that makes a huge difference. I think there are crypto leaders migrating to the Riviera Maya because it’s great destination. Lots of crypto people have come here because of the legislation, the multiple aspects and the more libertarian aspect that the Riviera May has kept during the last years. So definitely it’s a hot spot for it. So I only see an uptrend for it.
Is there anything else you want to add regarding crypto that we haven’t discussed?
Well, I would say for everyone that’s got crypto and that’s interested in different products or ideas or how to use their crypto to be on the lookout, go participate in Tulum Crypto Club. Go participate in the Playlist Karma Crypto Club. They’re bringing new ideas, new membership models are going to come up in the market. They enable you to stay in the crypto and maybe not even pay rent. Models such as Lago are going to come in being able to invest in projects early, leveraging crypto, and you can see that more and more products like that are going to be available on the market. So it’s just they’re a bright future up ahead.