In recent years, the vacation rental market in Mexico has been booming. With the country’s beautiful beaches, great food, and rich culture, it's no wonder so many people are interested in visiting.
If you’re thinking of buying a property in Mexico to convert it into a rental business, in this article we’ll talk about what the vacation rental scene looks like currently, what’s expected for the future, and what you can look forward to in terms of prices and demand.
What’s Tourism and Vacation Rentals Like in Mexico Right Now?
Thanks to its warm tropical climate, rich history, and delicious cuisine, Mexico has always been a favorite destination for travelers from all around the world.
During the last few years, this popularity has been reflected in the vacation rental market, with a constant growth in the demand from both foreign and national visitors.
This activity is even more apparent following the pandemic —which had a strong effect on tourism— but Mexico's industry stayed strong, and it’s recovery has been quite good, thanks to the growing interest in the country’s top tourist centers, including the Riviera Maya, Los Cabos, and Puerto Vallarta.
It’s also to be noted that the pandemic gave rise to the vacation rental boom not only in Mexico, but throughout the world, as the majority of hotels closed for several months and travelers had to look for other accommodations, finding that private homes were the perfect space for vacations while still respecting regulations and other’s space.
Likewise, the trend of digital nomads and "workationing,” in which people can travel and work at the same time, has made vacation rentals that offer a reliable internet connection and a pleasant place to work remotely to be in high demand. These needs are expected to stay as people seek to get the most out of their travels.
Tied to this, many of the most popular destinations in Mexico have seen an increase in prices for vacation rentals. This growth is projected to rise, as the country has much to offer for business and leisure travelers alike.
What Can You Expect in Terms of Vacation Rental Prices in Mexico?
Regarding prices, it’s important to note that they vary greatly depending on the location and the amenities of the property.
In general, prices tend to go up in the more well-known tourist destinations, and especially in beach towns like Los Cabos, Tulum, and Puerto Vallarta. It should also be taken into account that costs tend to fluctuate depending on the season of the year.
What Types of Properties Will Be in High Demand?
Most people looking for vacation rentals in Mexico tend to prefer places located in beach destinations or places full of natural beauty.
Properties that can offer access to activities such as snorkeling, scuba diving, golf, and ecotourism excursions are top in demand. This goes as well for those that offer swimming pools within their facilities, open-air areas to relax, and beautiful panoramic views.
What About the Legality of Buying a Property in Mexico and Renting it as a foreigner?
Buying a property in Mexico as a foreigner can be quite simple. There are rules and requirements that you must meet, but if you do it with the help of a professional and experienced real estate agency, you won't have any problems.
And you, as the owner of a property in Mexico, have the right to rent it. So you can turn it into a lucrative vacation rental business as soon as you see fit.
If you’d like to hear more about this process, some of our other articles might interest you:
Can US Citizens Buy Real Estate in Mexico?
Can Foreigners Buy Beachfront Property in Mexico?
Everything You Need to Know About the Fideicomiso: Buying Property as a Foreigner in Mexico
Projections for Vacation Rentals in Mexico in 2023
Here are some projections for vacation rentals in Mexico this year from Statista:
- Revenue in the vacation rental sector is expected to reach $1.69 billion by 2023.
- Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 4.56%, which will translate to a market volume forecast of $2.02 billion in 2027.
- Market penetration rate in 2023 is projected to be 14.8%, and is expected to reach 15.2% in 2027.
- Average revenue per user (ARPU) is expected to be $86.30.
- 63% of total revenue will be generated through online sales by 2027.
Buy Your Next Property and Turn it into a Successful Vacation Rental Business!
Vacation rentals in Mexico are an increasingly popular option for travelers looking for a more homey and local experience. Prices and demand are likely to continue to rise in the coming years, so now is the best time to start looking for properties to convert into vacation rentals.
At Tao Mexico, we have exclusive real estate developments in the top beach destinations in the country, such as Puerto Vallarta, Los Cabos, and the Riviera Maya, as well as in the beautiful colonial town of San Miguel de Allende.
We can offer you luxury apartments with premium amenities, 24/7 security, and prime location in any of the destinations we work in.
Our properties are perfect for vacation rentals as they have everything luxury travelers are looking for to spend their wonderful days resting in paradise.
Get in touch with us, our agents will be happy to show you the properties we have available for you to make the best real estate investment in Mexico.