Top 7 Mexican Airbnb Markets to Invest In

Mexico is more than a top tourist destination. It’s also a great place to invest in an Airbnb short-term rental, with diverse landscapes, rich cultural heritage and favorable property ownership laws. With a booming tourism sector and growing economy, Mexico offers vacation rental investors potential for significant returns.

In this article, we explore the best Airbnb vacation rental markets for investment in Mexico.

Top Mexican Airbnb Markets to invest in

1. Puerto Vallarta

2. Tulum

3. Playa Del Carmen

4. Cancun

5. Merida

6. Guadalajara

7. Oaxaca

Why Invest in an Airbnb Vacation Rental in Mexico?

Mexico has increasingly become a hotspot for foreign investment, particularly in the real estate sector. The country's rich cultural heritage, stunning landscapes and diverse ecosystems—from deserts to jungles and stunning beaches—offer unique opportunities for those looking to invest in vacation rentals. With its prime location and status as one of the world's most visited tourist destinations, Mexico presents numerous advantages for Airbnb investors.

The country's legal framework is favorable, allowing foreigners to own property, including within the restricted zones near coastlines and borders, through a bank trust (fideicomiso). This has made Mexico a top choice for retirees, particularly from the United States and Canada, who are drawn by the country's affordable living costs, warm climate and vibrant culture.

In recent years, Mexico's economy has shown significant growth, reinforcing its position as Latin America's second-largest economy. This economic stability, combined with an attractive exchange rate, has made it even more appealing to foreign investors. Many see Mexico not just as a retirement haven but also as a lucrative market for vacation home investments. With property values on the rise and the tourism sector booming, it’s a good time to invest in Mexican real estate.

The Top 7 Airbnb Markets to Invest in Mexico

1. Puerto Vallarta

Situated on Mexico's Pacific coast in the State of Jalisco, Puerto Vallarta is one of the most popular tourist destinations in the country. Known for its stunning golden sand beaches, Puerto Vallarta also boasts charming Spanish colonial-style architecture and picturesque cobblestone streets, which are lined with inviting boutiques and restaurants. The city's vibrant cultural scene and beautiful landscapes make it a magnet for tourists from around the world. Puerto Vallarta is also known for its inclusiveness, warmly welcoming people of all backgrounds and orientations.

Adding to its appeal, Puerto Vallarta has seen a surge in new condominium developments equipped with luxurious amenities, catering to the growing demand for high-end vacation rentals. This offers excellent investment opportunities for those looking to capitalize on the city’s thriving tourism sector.

Market info for Puerto Vallarta as at April 2024:

• Median occupancy rate of 65%

• A typical short-term rental listing is booked 237 nights a year

• Average daily rate (ADR) of MXN 1,904

• Typical annual revenue of MXN 441,000

• 8,079 active Airbnb listings

2. Tulum

Situated on Mexico's Caribbean coast, Tulum has evolved from a hidden gem cherished by yoga enthusiasts into a sought-after destination on the Riviera Maya. Originally known for its tranquil, off-the-beaten-path appeal, Tulum has gained global recognition for its stunning natural beauty, featuring a spectacular coastline, 1,000-year-old Mayan ruins and a laid-back bohemian vibe that continues to attract visitors from around the world.

The surge in popularity has significantly boosted Tulum’s real estate market. New developments, particularly in gated communities like Aldea Zama, are springing up to meet the increasing demand for luxury accommodations.

Market info for Tulum as at April 2024:

• Median occupancy rate of 54%

• A typical short-term rental listing is booked 197 nights a year

• Average daily rate (ADR) of MXN 1,578

• Typical annual revenue of MXN 301,000

• 8,663 active Airbnb listings

3. Playa Del Carmen

Playa del Carmen is an established tourism hotspot. It offers a wide range of activities from exploring galleries and shopping along the famous Fifth Avenue (La Quinta Avenida) to more adventurous pursuits like ziplining, river rafting and snorkeling around the nearby island of Cozumel. The city's nightlife is equally diverse, with options ranging from relaxing beach clubs to trendy bars.

Given its popularity, Playa del Carmen has seen a surge in real estate development, particularly in condos and villas that appeal to investors looking to capitalize on the city’s thriving tourism industry. Luxurious beach and golf resorts, such as those in the prestigious Mayakoba area, are among the most sought-after properties.

Market info for Playa Del Carmen as at April 2024:

• Median occupancy rate of 63%

• A typical short-term rental listing in is booked 230 nights a year

• Average daily rate (ADR) of MXN 1,201

• Typical annual revenue of MXN 271,000

• 12,340 active Airbnb listings

 4. Cancun

Cancun is the fifth most popular global summer destination of 2024, and Mexico’s primary tourist hotspot. The vibrant city is renowned for its stunning beaches, crystal-clear Caribbean waters and world-class amenities. The heart of Cancun's tourism activity is the 15-mile-long Hotel Zone (Zone Hotelera), a strip filled with hotels, marinas, shopping centers and nightlife options.

One of Cancun's key advantages is its accessibility, with the Cancun International Airport located just 6 miles from the Hotel Zone. This proximity makes it convenient for travelers from all over the world, further boosting the city's appeal as a top-tier vacation destination.

The thriving tourism industry in Cancun has also led to a robust real estate market, presenting numerous investment opportunities. Investors can choose from a variety of options, including upcoming construction projects like beachfront villas, modern condos and boutique hotels. Additionally, the waterfront properties in the luxurious Puerto Cancun marina community offer exclusive living and investment prospects.

Market info for Cancun as at April 2024:

• Median occupancy rate of 65%

• A typical short-term rental listing in is booked 237 nights a year

• Average daily rate (ADR) of MXN 1,046

• Typical annual revenue of MXN 240,000

• 6,680 active Airbnb listings

5. Merida

A Spanish colonial city located on the Yucatán Peninsula, Merida is a treasure trove of cultural and historical significance. Known for its wide boulevards, charming plazas and grand mansions, Mérida exudes an old-world charm that is complemented by its proximity to the Caribbean Sea. The city is steeped in history and culture, with numerous museums and theaters that reflect its rich heritage.

The influence of Mayan culture is palpable throughout Mérida, from the architecture and arts to the unique Yucatecan cuisine that blends indigenous and Spanish flavors. The city’s cantinas, with their swinging doors and lively atmospheres, are iconic spots where locals and visitors alike can enjoy traditional dishes and vibrant music. The people of Mérida, many of whom are of Mayan descent, are known for their warmth and hospitality, further enhancing the city’s appeal.

Market info for Merida as at April 2024:

• Median occupancy rate of 58%

• A typical short-term rental listing in is booked 212 nights a year

• Average daily rate (ADR) of MXN 840

• Typical annual revenue of MXN 179,000

• 6,214 active Airbnb listings

6. Guadalajara

Guadalajara is becoming a hotspot for investment, offering many of the benefits of Mexico's larger, more famous cities but at a fraction of the cost. The city is known for its gourmet food scene, thriving craft beer industry and close proximity to both the beach and cultural landmarks like the birthplace of tequila. This makes Guadalajara not just a great place to invest in a short-term rental, but also an ideal base for exploring the rest of Mexico.

Market info for Guadalajara as at April 2024:

• Median occupancy rate of 58%

• A typical short-term rental listing is booked 212 nights a year

• Average daily rate (ADR) of MXN 772

• Typical annual revenue of MXN 159,000

• 5,706 active Airbnb listings

7. Oaxaca

Oaxaca is emerging as a sought-after destination for travelers seeking authentic Mexican experiences. Renowned for its rich traditions, Oaxaca is a vibrant tapestry of Mexican culture, where ancient customs blend seamlessly with colonial heritage.

The city’s appeal extends beyond its cultural offerings. It is surrounded by natural beauty, including lush botanical gardens and the nearby Sierra Madre mountains. The region's archaeological sites, such as Monte Albán, add to its allure, making it a well-rounded destination for both culture and adventure seekers.

Market info for Oaxaca as at April 2024:

• Median occupancy rate of 50%

• A typical short-term rental listing in Oaxaca City is booked 182 nights a year

• Average daily rate (ADR) of MXN 892

• Typical annual revenue of MXN 153,000

• 4,285 active Airbnb listings

Maximizing Returns: Vacation Rental Property Investment in Mexico

Whether you’re drawn to the luxurious vacation rentals in Puerto Vallarta, the laid-back and bohemian atmosphere of Tulum or the vibrant nightlife and stunning beaches of Cancun, Mexico has something to offer every type of vacation rental property owner. To maximize your returns on investment, focus on projects with a proven track record of providing consistent short-term rental income and strong property appreciation. Evaluate the local rental market, analyze occupancy trends and track tourism numbers to ensure your chosen location aligns with your financial goals. Collaborating with an experienced real estate investment advisor can be beneficial as they can help you navigate the market, identify high-potential vacation rental properties and make informed decisions that suit your needs and budget.

FAQs

Can a foreigner buy a house anywhere in Mexico?

Under the law on foreign investment passed in 1973, non-Mexicans are allowed to buy property anywhere in Mexico, except within 100 miles of the border and within 50 miles of the coastline.

A further amendment was adopted in 1993 to allow foreigners to buy property near the coast and the border, within the restricted zones. Specifically, they can do so through what is called a Fideicomiso.

What is a Fideicomiso?

A fideicomiso is essentially a bank trust. The system is sanctioned by the Mexican government and is secured by Mexico's central bank. The setup enables the Bank of Mexico to legally a foreign buyer’s property title.

Property trusts are renewable on a 50-year basis and the beneficiary (the foreign buyer) has all the rights commonly enjoyed by Mexican owners. In a fideicomiso, the bank cannot sell the property without the buyer's written consent, and the buyer can own multiple properties, leave them to heirs, and sell the trust on. Owning property through a trust includes a setup cost and maintenance fees.

Can I buy land or property in a restricted area through a corporation?

Yes. An international buyer can own land or property through a corporation, and that corporation does not necessarily need to be Mexican; it can be 100% foreign-owned. The option is typically exercised when you are buying strictly for investment or business purposes (e.g. when subdividing and developing land). In doing so you may also have to comply with reporting requirements and may be subject to other restrictions.

How do Airbnb taxes work in Mexico?

For Airbnb vacation rentals in Mexico, Airbnb collects taxes on short-term rentals such as the 16% Value Added Tax (VAT) and occupancy taxes imposed by state governments from guests and remits them to the relevant authorities.