There’s a city in Mexico’s central highlands that looks like a painter’s palette: the colonial city of San Miguel de Allende. Everywhere you look, there’s color. The sky’s a brilliant shade of blue. Buildings painted in candy colors—green, pink, yellow, and orange—line the streets. The rose-pink spires of the city’s most famous monument, the Parroquia church, rise up over a green, leafy plaza.
When I visited last year, the court-yard garden of my guesthouse was an explosion of blooming flowers against the crisp blue sky. From my balcony there was a view to San Miguel de Allende’s skyline of tile rooftops and church spires. Bells tolled. Jacaranda petals drifted on the fresh breezes—so thick, sometimes, that they formed a layer on the small rectangular garden pool. I was utterly charmed.
It was my first trip to the colonial city in over a decade—but certainly not the last. Because I see opportunity to make strong capital appreciation on a condo deal I’m working on, and a nice little rental earner from the wedding set who are seeking out San Miguel in droves.
San Miguel’s Wedding Set and the Money They’re Spending
“Everywhere is full. All I can find is one guesthouse. It’s $280 a night. Is that okay?
The weekends before and after are the same.”
That was what my friend, whom I was traveling with, had messaged me to say a couple of weeks before my trip last year. He asked because he knows that’s more than I like to spend on scouting digs. But the lack of accommodation only piqued my interest in the rental opportunity in San Miguel. It shows how strong the rental demand is.
I got another reminder as my friend and I moved into the breakfast room from the guesthouse’s courtyard. Over a big, communal oak table, we had a breakfast of Mexican delicacies and West Coast vegan raw fare. We shared a table with a woman called Joanna—a hairstylist from the U.S.
Joanna’s trims start at $120 in her Los Angeles salon. She was in town to do the hair for the wedding of a Latin rock star. She’s a regular visitor to San Miguel with her work.
If those of us who are on work trips are paying $280 a night for our digs, you can imagine what the wedding set is paying.
This is the kind of rental market a real estate investor could tap into. Presuming you find the right home at the right price, that is… To do that, you need to understand San Miguel’s real estate market.
The Evolution of San Miguel’s Real Estate Market
The city of San Miguel sits at 6,200 feet above sea level, a three-and-a-half-hour drive from Mexico City. It has a lot to offer a retiree…or any of the countless vacationers or wedding parties who come every year.
The heart of much of the action is around the rose-pink Parroquia church, which sits on the side of the main plaza and boasts a neo-Gothic façade. Colonial buildings surround the plaza itself. It’s a popular hangout where locals, expats, and tourists gather, especially in the evenings.
It’s great for people watching, newspaper reading, and catching up with friends.
Food carts and vendors offer snacks and drinks—tacos, churros, popcorn. And home-made ice-cream, which comes in exotic flavors like rose petal, avocado and mamey (a sweet, creamy, tropical fruit).
Celebrated as an arty, cultural hangout with postcard-perfect colonial architecture, San Miguel has attracted a thriving artistic community for more than 70 years—it put San Miguel on the international map.
In the late 1930s, Peruvian intellectual and artist Felipe Cossío del Pomar founded the city’s first art school. Stirling Dickinson, a U.S. artist who became the school’s director, is widely credited with making San Miguel a destination for the artists and expats who flocked here.
The trickle of artists coming to the city became a flood when the school accepted payments from students using the G.I. Bill, which enabled military vets to study overseas. It was a turning point.
And thousands came to the historic city for good times and low-cost living.
Life magazine covered San Miguel in its January 1948 edition. Under the headline “GI Paradise,” it reported that 50 vets and their wives had come to study at Bellas Artes, a former monastery turned fine-arts school a decade before. Some of the delights of San Miguel outlined in the article were its crisp air and warm sun.
And the low cost of living. At the time, the G.I. grant was $65 a month. A photo showed an apartment in San Miguel that rented for only $10 a month. The prices of some other artists’ essentials were quoted, too: Good rum or brandy cost 65 cents a quart, and cigarettes 10 cents a pack. Paradise indeed.
Reportedly, 6,000 vets applied to study art in San Miguel after this article came out. It cemented the city’s status as an artists’ colony. Its profile grew from there.
In 1960, author Jack Kerouac visited with Allen Ginsberg and Neal Cassady. Cassady later returned to live (and die) in San Miguel.
Many of those artists returned to San Miguel in later decades as retirees. This triggered another wave of development in the city. But after the 2008 economic crisis, this part of San Miguel’s market slowed down. That opened the door for the wedding market to grow…
The real estate market in San Miguel started off in the city’s downtown historic core. Early buyers snapped up crumbling homes and restored them to their former glory. But prices soon became crazy expensive. For a dream colonial in Centro these days, you’re looking at $1 million-plus.
And there are issues with downtown. Strict permitting and zoning laws are in place to protect the city’s heritage.
San Miguel’s Wedding Set and the Money They’re Spending
“Everywhere is full. All I can find is one guesthouse. It’s $280 a night. Is that okay? The weekends before and after are the same.”
That was what my friend, whom I was traveling with, had messaged me to say a couple of weeks before my trip last year. He asked because he knows that’s more than I like to spend on scouting digs. But the lack of accommodation only piqued my interest in the rental opportunity in San Miguel. It shows how strong the rental demand is.
I got another reminder as my friend and I moved into the breakfast room from the guesthouse’s courtyard. Over a big, communal oak table, we had a breakfast of Mexican delicacies and West Coast vegan raw fare. We shared a table with a woman called Joanna—a hairstylist from the U.S.
Joanna’s trims start at $120 in her Los Angeles salon. She was in town to do the hair for the wedding of a Latin rock star. She’s a regular visitor to San Miguel with her work.
If those of us who are on work trips are paying $280 a night for our digs, you can imagine what the wedding set is paying.
This is the kind of rental market a real estate investor could tap into. Presuming you find the right home at the right price, that is… To do that, you need to under-stand San Miguel’s real estate market.
The Evolution of San Miguel’s Real Estate Market
The city of San Miguel sits at 6,200 feet above sea level, a three-and-a-half-hour drive from Mexico City. It has a lot to offer a retiree…or any of the countless vacationers or wedding parties who come every year.
The heart of much of the action is around the rose-pink Parroquia church, which sits on the side of the main plaza and boasts a neo-Gothic façade. Colonial buildings surround the plaza itself. It’s a popular hangout where locals, expats, and tourists gather, especially in the evenings.
It’s great for people watching, newspaper reading, and catching up with friends.
Food carts and vendors offer snacks and drinks—tacos, churros, popcorn. And home-made ice-cream, which comes in exotic flavors like rose petal, avocado and mamey (a sweet, creamy, tropical fruit).
Celebrated as an arty, cultural hangout with postcard-perfect colonial architecture, San Miguel has attracted a thriving artistic community for more than 70 years—it put San Miguel on the international map.
In the late 1930s, Peruvian intellectual and artist Felipe Cossío del Pomar founded the city’s first art school. Stirling Dickinson, a U.S. artist who became the school’s director, is widely credited with making San Miguel a destination for the artists and expats who flocked here.
The trickle of artists coming to the city became a flood when the school accepted payments from students using the G.I. Bill, which enabled military vets to study overseas. It was a turning point. And thousands came to the historic city for good times and low-cost living.
Life magazine covered San Miguel in its January 1948 edition. Under the headline “GI Paradise,” it reported that 50 vets and their wives had come to study at Bellas Artes, a former monastery turned fine-arts school a decade before. Some of the delights of San Miguel outlined in the article were its crisp air and warm sun.
And the low cost of living. At the time, the G.I. grant was $65 a month. A photo showed an apartment in San Miguel that rented for only $10 a month. The prices of some other artists’ essentials were quoted, too: Good rum or brandy cost 65 cents a quart, and cigarettes 10 cents a pack. Paradise indeed.
Reportedly, 6,000 vets applied to study art in San Miguel after this article came out. It cemented the city’s status as an artists’ colony. Its profile grew from there.
In 1960, author Jack Kerouac visited with Allen Gins-berg and Neal Cassady. Cassady later returned to live (and die) in San Miguel.
Many of those artists returned to San Miguel in later decades as retirees. This triggered another wave of development in the city. But after the 2008 economic crisis, this part of San Miguel’s market slowed down. That opened the door for the wedding market to grow…
The real estate market in San Miguel started off in the city’s downtown historic core. Early buyers snapped up crumbling homes and restored them to their former glory. But prices soon became crazy expensive. For a dream colonial in Centro these days, you’re looking at $1 million-plus.
And there are issues with downtown. Strict permitting and zoning laws are in place to protect the city’s heritage.
The narrow cobblestone streets were not designed for modern traffic. There’s a shortage of parking.
And besides that, some people just don’t want to live in the heart of the city’s busiest zone.
So in the last two decades, developers started to look outside the city, designing communities with more space and more amenities. Much of this development was focused on North Americans, especially North American retirees.
Things were booming until the crisis. Then, as in other locations that were heavily dependent on North American buyers, the market slowed. It didn’t crash, however.
There were some fire sales, but you were still talking seven figures for a luxury home.
The profile of the typical San Miguel homeowner is some-one who is well heeled, doesn’t have a mortgage on his home, and doesn’t need to sell in a hurry.
Hardest hit were developers outside the city. Their sales dried up. But some of them identified a new market: upper-class Mexicans.
San Miguel is in the state of Guanajuato. It’s 170 miles from Mexico City and 60 miles from León, Guanajuato’s state capital. That makes it the perfect week-end retreat and vacation destination for wealthy Mexicans from these cities.
Every weekend San Miguel is thronged with high-end weddings from Mexico, the U.S., and the Latin world—and the rental market for good places is booming. Friends who own colonial homes here have been extending, adding rental rooms and units to cater to surging demand.
Today San Miguel is a hip weekend and vacation retreat for well-heeled Mexicans. It’s a chic spot for weddings and an emerging food and wine destination.
But while the tourism market and business in San Miguel soared, the real estate development and sales industry stalled. But there is still demand—especially for comfortable condos that don’t command a seven-figure sum. And that’s what I was in San Miguel to check out.
What Will Make a Profit in San Miguel
I’ve been working to find the right opportunity to profit in San Miguel. And I see great potential in locking down a condo in the right community outside the historic center for under $200,000.
There’s a huge need for condos like these in San Miguel…but nobody’s been catering to this section of the market. As soon as word gets out that they’re available, they’ll be in big demand, driving prices higher.
Choose the right one and you could plug into a sweet spot. This type of condo will suit retirees, snowbirds, and young professionals. They’ll appeal to tourists and weekend vacationers, too.
Though sales in the city slowed down in the years of the U.S. economic crisis, San Miguel is poised for a real estate reboot—and for values to rocket.
And, while that real estate market is starting to take off and values begin to rise, you could rent to the wedding set that’s booming here. Figure on renting the right condo here for 28 weekends a year at $500 per weekend—and also on picking up some other short-term rental slots, boosting your rental income by another $4,000. That would be a nice little earner while you wait for capital appreciation to kick in—$18,000 a year.
Editor’s Note: Ronan McMahon is Executive Director of Pathfinder, International Living’s preferred real estate advertising partner. He is always ahead of the pack with the best real estate deals worldwide. Ronan shares his findings and profit opportunities with members of his Real Estate Trend Alert. Want in? Learn more at Intliving.com/RETA.