Best Locations in Mexico for Airbnb Investments

04/15/2025

Industry Insights International Outlook

Mexico’s Allure for Real Estate Investors

Mexico has surged to the top of vacation-home markets. A record 45 million international visitors arrived in 2024, pushing tourism revenue to ~$33 billion (a 7.4% gain) and accounting for roughly 8.6% of GDP. The vast majority of travelers are from the U.S., Canada and other nearby markets, reflecting a strong North American demand base. For high-net-worth investors, Mexico offers a mix of tropical lifestyle and solid fundamentals: affordable coastal real estate (often well below U.S./European prices) ; a stable currency; and a large, diversified economy. Foreign buyers benefit from favorable tax and legal incentives – for example, recent IMF reports note rising foreign home purchases spurred by capital-gains exemptions and reduced property taxes for U.S. investors . Annual holding costs are low (property tax is only about 0.1% of assessed value ), and Mexico’s cost of living is substantially cheaper than in most U.S. markets . These factors, combined with Mexico’s rich culture, climate and wellness draw, make it a perennial magnet for retirees and vacationers. In practice, many American and Canadian buyers now view Mexican beach or city homes as a portfolio diversifier with strong upside: “Mexico presents numerous advantages for Airbnb investors,” notes a recent industry report , highlighting its booming tourism and welcoming ownership laws.

Diverse Tourism Profile: From beach resorts to colonial cities, Mexico hosts year-round travel. Coastal hubs enjoy sun-and-sand popularity, while cultural capitals like Oaxaca City and Mérida attract heritage tourists.
Proximity & Infrastructure: Mexico’s 12 international airports (Cancún, Puerto Vallarta, Mexico City, etc.) and expanding highways/rail (e.g. the upcoming Maya Train corridor) ensure easy access. Direct flights from many U.S. cities mean steady funnel of visitors.
Legal Comfort for Foreigners: Americans and other foreigners can buy freehold outside “restricted zones” (50 km from coasts) or via a Mexican corporation. Within coastal zones, a 50-year bank trust (fideicomiso) grants full rights to rent, sell or bequeath the property ( Mexico Relocation Guide ). These mechanisms are well-tested and secure, so closing with a notario is straightforward .
Economic Stability: Mexico is Latin America’s second-largest economy, with steady (if modest) growth. Exchange rates often favor U.S. buyers; nearshoring of manufacturing and technology sectors (especially around Guadalajara and Monterrey) strengthen the peso. Such fundamentals support long-term property values.

Prime Vacation Rental Markets

Riviera Maya: Cancún & Playa del Carmen

The Cancún–Playa del Carmen corridor (Quintana Roo) is Mexico’s most visited region. These beaches feature thousands of resorts, all-inclusive hotels and vacation rentals. Year-round direct flights keep occupancy robust, especially in winter and spring. Tourist occupancy here typically runs in the 50–65% range , and average daily rates (ADR) in U.S. dollars hover roughly in the mid-$60s for Cancún (lower-tier) to ~$80–$100 for more upscale Playa del Carmen units. Crucially, high season (December–April) often sees near-full occupancy and premium rates, while the hurricane season (Sept–Oct) can see sharp dips in leisure bookings. Investors should model cash flow for these swings.

Strong Demand: Beaches, nightlife and family resorts draw crowds. U.S./Canadian spring-breakers and winter sun-seekers keep bookings high. Cancún and Playa also benefit from extensive resort supply (which means competition), so occupancy is healthy but not unusual – roughly 55–60% on average.
Regulatory Note: Quintana Roo now mandates that all short-term rental hosts register with the state tourism registry (RETUR-Q) ( Naya Homes ) and collect a ~3% lodging tax. In practice, Airbnb and other platforms facilitate this tax collection, but owners must ensure compliance with RETUR-Q rules (annual renewal, safety standards, etc.).
Pricing & ROI: Vacation rentals in Cancún/Playa often generate moderate gross yields (~8–12% annually) due to high volume but also high supply. Properties are relatively affordable (modern condos ~$2,500–3,000/m² ), and many developers offer turnkey rental programs. Average hosts see annual revenues in the mid-five figures (USD), with peak-season nights commanding over $100.
Infrastructure: Cancún has an international airport (served by dozens of airlines), highways to Tulum and Mérida, and the region is wired for tourism (Wi-Fi, golf courses, theme parks). Future projects like the new Cancún airport expansion and Maya Train stations will further boost connectivity.

Tulum

Tulum has transformed from a rustic beachfront village into a premium resort hub. Its pristine ruins, cenotes and bohemian vibe attract a younger, upscale crowd. Real estate here is expensive – one report shows 2023 condominium prices averaging ≈$166,000 for 48 m² units (~$3,500/m² ). Nonetheless demand remains high, and many Tulum properties earn very strong nightly rates (often well above $150+ during peak season) thanks to boutique experiences and luxury amenities. Seasonal trends mirror the Riviera Maya: winter stays (including holidays and spring break) are in great demand, while late summer can be slow.

Luxury and Lifestyle: Tulum’s market is driven by high-end resorts, eco-lodges and private villas. The area attracts trend-conscious vacationers, digital nomads and wellness travelers. Its remote location and limited new supply help maintain rental pricing power.
Development Note: Tulum’s rapid growth means competition is rising (new condo projects and Airbnb listings abound), so underwriting must account for potential oversupply. Current investors often partner with professional management for marketing and unit-turnover.
Regulatory: Tulum falls under the same Quintana Roo regime – hosts need RETUR-Q registration and pay the lodging tax. The 50 km trust zone means most buyers hold title via fideicomiso if on the beach .
Connectivity: Tulum Airport (under construction) and the planned Maya Train will soon improve access. Meanwhile, the two-lane road from Cancún is often congested in high season.

Puerto Vallarta

On the Pacific coast, Puerto Vallarta (and nearby Riviera Nayarit) is a snowbird favorite. It combines surf, surfside golf and a charming downtown. Tourist traffic is substantial year-round, especially December–May. Market data suggests Vallarta achieves occupancy in the high-50% range with ADRs often exceeding those in Cancún (Airbnb ADR ~$100+ ), owing to more luxury inventory. Local factors – excellent hospitals, a well-established ex-pat community and international airport – keep demand steady.

Balanced Market: Puerto Vallarta’s rental market has grown steadily. It benefits from retirees and families alike. While occupancy averages ~60%, top-shelf villas and penthouses can command $300–$500+ per night during peak weeks.
Investment Climate: The Bay of Banderas has seen ongoing condo development. Foreign buyers pay a modest trust fee for coastal purchases ( Brevitas ). As a more mature market, forecasted rental growth is stable but not as explosive as in the Yucatán.
Seasonality: Vallarta has a distinct tourist season (Nov–Apr) and a quieter rainy summer. However, hurricane risk is minimal (Pacific storms rarely reach far south), providing a longer comfortable season than on the Atlantic side.

Mérida

Inland Yucatán’s capital, Mérida, is an emerging urban rental hotspot. Safe, walkable and steeped in culture, its appeal extends beyond beaches. Many U.S. and Canadian buyers are setting up rental properties in Mérida’s historic center and affluent suburbs. Analyses show mid- to high-grade Mérida rentals average roughly 58% occupancy and ADR around MXN 800–900 (≈$45–50) . Given lower property prices than resort zones, investors can see attractive yields; properties often list under $2,000/m² for quality homes.

Growing Expat & Tourist Interest: Mérida attracts a mix of retirees, business travelers and regional tourists. Its colonial charm and year-round festivals (e.g. Carnival, Day of the Dead) sustain steady demand. The city’s status as “safest in Mexico” bolsters confidence.
Infrastructure: Mérida has an international airport (with flights to U.S./Canada), new malls and hospitals. High-speed internet and improved roads are expanding out from the city. Within a few hours lie Gulf beaches (Progreso) and Mayan sites, enhancing multi-night stays.
Financials: With many units remaining fairly new, average rental revenues for a Mérida Airbnb are competitive – annual revenues around USD 10–12K for a typical condo, and even more for larger homes ( Hostaway ).

Legal and Regulatory Environment

Mexico is generally Airbnb-friendly. Short-term rentals are legal nationwide, with few blanket bans. The biggest regulatory issues are registration and tax compliance. For example, Quintana Roo requires hosts to enroll in the RETUR-Q registry and collect a lodging tax (~3% of rents). Mexico City and some other cities have also imposed registry and safety requirements on STR properties. In practice, most hosts comply via Airbnb/VRBO platforms (which now remit local taxes), but owners should engage local accountants. As industry analysts note, “Airbnb is legal throughout Mexico, with only light local licensing in a few cities”.

Key legal points for investors include:

Foreign Ownership: U.S. and other foreigners can buy under Mexican law. In the beach “restricted zone,” title is held via a bank trust (fideicomiso) – a 50-year renewable trust granting full control to the buyer . Outside that zone, foreigners can hold title directly. Alternately, investors sometimes form Mexican corporations to hold multiple properties, but the trust route is simpler for single-home purchases.
Taxes: Rental income is taxed under Mexico’s SAT system. Legally, a foreign owner must register for a tax ID (RFC) and either have the platform withhold ~25% of gross income, or file as a business and pay ~30% on net profit. There is also 16% VAT on furnished rentals, typically passed to guests. Predial (property tax) is negligible (~0.1% of assessed value ( Brevitas )). In summary, Mexico’s tax burden on rentals is moderate compared to many U.S. cities, but compliance (withholding, VAT filings, annual returns) is essential to avoid fines.
Regulatory Compliance: Some municipalities have building or zoning rules limiting STRs in certain neighborhoods or condo buildings. Investors should check homeowners’ association (HOA) bylaws and local ordinances. For example, Mexico City now requires a short-term rental permit for every property. It is prudent to consult a Mexican real estate attorney or experienced broker when closing a deal, to ensure titles are clean, trusts are set up correctly and all local regulations are met.

Management and Remote Operations

High-net-worth buyers often invest remotely, so solid property management is vital. Mexico has a mature service sector for this: in major markets you can hire English-speaking co-hosts and agencies that handle everything from marketing to maintenance. Typical fees for full-service management are 20–25% of rental revenue , which covers guest communications, check-in (often requiring ID scans, as Mexican law can mandate), cleaning coordination and minor repairs.

Local Staff & Costs: Cleaning services are inexpensive (roughly MXN 500–800 per turnover – about $25–40 USD ( Brevitas )). Many investors also employ a local caretaker or “property guardian” for a small monthly stipend to oversee routine upkeep. These low overheads mean net yields can be quite healthy.
Technology: Most owners use global platforms (Airbnb, Vrbo) that handle bookings and payments in USD or MXN. Digital tools (pricing algorithms, channel managers) are common. Smart locks and keyless entry systems enable remote check-in. Good Wi-Fi and reliable utilities are now widespread in urban and resort developments.
Hands-off Ownership: With the right team, absentee ownership is very manageable. Investors should establish clear reporting (monthly P&L, occupancy stats, guest reviews). On-the-ground partners can deal with emergencies (e.g. A/C repairs) quickly. Given the distance, vetting management (references, track record) is crucial to protect the asset.

Cultural and Economic Drivers

Several cultural and economic trends underpin Mexico’s Airbnb growth:

Tourist Demographics: The visitor base is diverse. U.S. and Canadian families and retirees dominate beach destinations, while European and domestic tourists also contribute. Younger international travelers, including digital nomads, increasingly target hubs like Tulum, Mexico City and Oaxaca for their authenticity and value. Guadalajara appeals to regional business travel, and Mérida has become a “must-see” on Mexican itineraries.
Infrastructure and Connectivity: Major airports and highways make travel smooth. Recent upgrades (e.g. Puerto Vallarta’s airport expansion) and projects like the Maya Train will direct traffic beyond the coasts – potentially activating more inland tourism (Valley of Mexico, Yucatán cenotes, etc.). Reliable cell networks and co-working spaces support remote workers who rent long-term through platforms.
Economic Trends: Although GDP growth has been modest, Mexico’s macro is stable. Inflation has moderated, and interest rates (around 10–12% for mortgages) currently encourage cash purchases (most foreign investors do not finance locally Brevitas ). The peso has strengthened a bit, but dollar-based buyers still find bargains. Mexico’s nearshoring and energy sector development (e.g. wind power in Oaxaca) may boost ancillary travel. One should note, however, IMF forecasts show slight economic headwinds in 2025, so investors should focus on tourism-driven micro markets rather than broad macro gambles.
Local Culture: Mexico’s famed hospitality and safety in tourist zones enhance the guest experience. Diverse offerings – from beach clubs and golf courses to colonial plazas and culinary tours – keep repeat visitation high. This cultural richness is difficult to quantify but is a core part of the country’s sustained tourism growth.

Throughout all these considerations, high-net-worth investors will gauge ROI by balancing purchase price with revenue potential. Generally, “best ROI” opportunities emerge where travel demand exceeds current supply. Traditionally that’s been Cancun, Playa and Puerto Vallarta for sheer volume, but those markets also face heavy competition. Emerging “hidden gems” (like Oaxaca’s coast or La Paz) can yield higher percentage returns on a smaller capital outlay, though they require patience and savvy. We recommend a portfolio approach: anchor investments in proven, high-traffic cities (for stability and ease of management) while exploring one or two up-and-coming markets for yield upside. In every case, due diligence on local trends and a strong management plan are essential.