Less than an hour north of the Mexican border with Belize, lies the town and lagoon known as Bacalar. Previously, the area was regarded exclusively as an adventure tourism destination, but now Bacalar is a significant part of Costa Maya, an area of special recent interest, infrastructure growth and real estate development south of better-known Cancun and the Riviera Maya in the state of Quintana Roo. Steven Sohrakoff from Bacalar Properties, answered a few questions for Mexico Real Estate Investment about the area of Bacalar. Steven, what differentiates your area from the rest of the Yucatan Peninsula in terms of real estate offerings, and the area in general? Bacalar is different from the rest of the peninsula, first and foremost, because it's freshwater--one of the few places in the world where freshwater takes on the hues of aquamarine and blue normally associated with tropical saltwater destinations, and hence its nickname as the Lake of Seven Colors. We have natural beauty on par with the Caribbean Sea, but without the homeowner's maintenance nightmare associated with beachfront homes, without the sand fleas and biting flies and without the hurricane storm surge risk. In terms of real estate offerings, Bacalar is attractive because it's a relatively new market with good investment potential (ROI), and its new "Pueblo Magico" status has earmarked millions in federal funds for infrastructure improvements around the town. We're also a short drive away from the capital city Chetumal. Who are your principal clients and where are they from? They are mostly people looking or a dream getaway or retirement destination away from the crowds of the Riviera Maya. Roughly, our clients have been about 40% Mexican, 40% American and Canadian, and 20% European. What are some of the hidden gems and activities people should know about in Bacalar and the surrounding area?

1. The 18th century fort and museum.
2. A swim and lunch at Cenote Azul.
3. Snorkeling or floating down "the Rapids" a short river that flows from Xul-Ha lake north into Bacalar. It is safe with a very light current.
4. A guided wildlife tour to the other side of the lake, either by kayak or motorboat.
5. A visit to the Kohunlich Mayan ruins, about a 45 minute drive southwest of Bacalar. Very neat ruins with well-preserved carvings in a jungle setting.

What is your outlook for the state of real estate investment in the Bacalar area for this year, next year and the next five years? 2009 will be a buyer's market in Bacalar. With the sluggish economy investment is down at the moment, which is good news for potential investors. Also, we will see many new titles for lakefront properties come onto the market in 2009 as a result of previously untitled (and there unavailable) lots finally being granted titles. An increase in supply is obviously good news for potential buyers. Over the next five years is when investors will realize their ROI. More and more people will discover Bacalar, both as tourists and as investors. Foreign money will continue to pour in and demand will increase, raising land values just as in the case of the Riviera Maya. The federal grants via the Pueblo Magico program will continue to give the town of Bacalar a facelift and improve infrastructure. Since you mentioned ROI (Return on Investment), what kids of returns are your clients seeing for the properties they've purchased? Over the last four years and up until this year, Bacalar landowners have seen a 20 to 30% annual appreciation on their properties. Due to the economy this has stagnated in 2008, a trend that will probably continue into 2009. People who buy over the next six months or so will be buying at a good time, when the market is in a trough. Steven Sorhakoff, originally from Oregon, is a partner in Bacalar Properties, which he co-founded with Nick Hunter originally from London, England. Find out more about Bacalar at the Bacalar Properties website at http://www.bacalarproperties.com