Playa del Carmen, on the Mexican Caribbean Coast, experienced a true boom during Covid as it was one of the few places in the world to stay reliably open for business.
Once the rest of the world opened up again, those who spent months or years in Playa del Carmen felt they “overdid it” and resumed exploring other corners of the world.
Since then, the real estate market has been in a rut. To be fair, much of Mexico has been in a rut relatively speaking, but its Caribbean coast even more so.
At this stage I would only recommend investing there to people who love the place or want to live there, as I don’t see any near term turnaround.
It’s crucial to choose the right type of property if you want to optimize returns and liquidity. In a buyer’s market you want to invest in quality.
We walk through an example with Luigi in the video below.
Get in touch with Luigi for Riviera Maya real estate
To a World of Opportunities,
The Wandering Investor
- My Real Estate Buyer’s Agent in Tulum and Playa del Carmen
- Give Birth in Mexico for Citizenship
- My Favourite Realtor in Puerto Vallarta, Mexico
- How to Obtain Residency in Mexico
Articles on Mexico:
- Playa del Carmen Real Estate Market: 2026 Investor Guide
- Full Analysis of the Tulum Real Estate Crash
- 6 reasons against a Real Estate Investment in Cancun
- Investing in Multifamily Housing in Playa del Carmen
- Puerto Vallarta Real Estate Market: 2026 Investor Guide
- What is a Lock Off Condo & Crazy Architecture in Tulum, Mexico
- Giving birth in Mexico as a foreigner – the complete guide
- Pros and Cons of living in Playa del Carmen, Mexico
- Puerto Vallarta real estate – a Plan B destination for liberals
- Why are Families Moving to Playa del Carmen, Mexico? Real Estate Edition
If you want to read more such articles on other real estate markets in the world, go to the bottom of my International Real Estate Services page.
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Transcription of “Maximizing ROI in Playa del Carmen Vacation Rentals”
LADISLAS MAURICE: Hello everyone, Ladislas Maurice from The Wandering Investor. So today we’ll be doing a case study with all the ROI numbers of an apartment here in Playa del Carmen to get the true rental yield figures. Luigi, how are you?
LUIGI: I’m great. I’m back. It’s a beautiful day, it’s hot up here.
Why are people moving to Playa del Carmen?
LADISLAS MAURICE: It is, it is. So people are increasingly moving to Playa del Carmen full-time, which is quite different from before when it was mostly tourism.
LUIGI: Yeah, I mean, when I moved here, it was basically vacation packages, one week. People were coming and going. And it was a very small local community, but now ever since COVID, a lot of people got to know Playa, and it’s becoming a city now. People are moving, they’re spending either half the year or all year round here. It’s really changed the demographic, it’s very family-oriented now, whereas before it was just a lot of just one-week vacation, maybe spring break. Everything has changed, and you can see all the facilities, the amenities, and you can see the roads, and, and all the services have changed from cellular service, Wi-Fi, banking, online banking, all the things you’re used to in like, let’s say Canada and United States, have all improved here, and so you can live very comfortably in Playa now. And the same thing is happening in other markets around here as well, like Tulum is coming up, Puerto Morelos, Cancun. It’s really changed since COVID.
LADISLAS MAURICE: Yeah, because I remember when I first came here to Playa del Carmen early during COVID, the infrastructure was still quite poor, especially in terms of internet. It was slow and calls on the cell phone would just keep dropping, and this has changed. Now, generally speaking, you’re fine and you can work remotely. So this is really, this has been a big catalyst for Playa del Carmen. The real estate market has slowed down though.
LUIGI: Well, I mean, during COVID, it, it peaked, obviously, but those were unrealistic numbers. I mean, COVID was an unusual circumstance, so now we’ve gone back to the regular market, which is always steadily increasing in Playa, and Playa has increased since I when I moved here, 20, 25,000 people were living here. You know, this is over 20, 25 years ago. I see different numbers between 390 to 420,000 people living in Playa del Carmen. I mean, that’s, that’s huge. So the market is steadily growing, you can see the infrastructure’s changing, they’re redoing highways, they’re building more, they’re redoing roads. All the services have improved. The market is growing, there’s more construction, more units coming on the market. So it is growing, it’s becoming a more and more attractive place to live all year round for sure.
LADISLAS MAURICE: Even amongst middle-class Mexicans and upper-class Mexicans, many more of them are buying places here in Playa del Carmen and staying here. Before they just went to Cancun, really. But now they’ve expanded and they’re coming here to Playa del Carmen as well, which is, which is a recent phenomenon really.
LUIGI: It is, because they always thought Playa was just this dusty kind of hippie little village, and Cancun had all the nice amenities and it was more luxurious. Playa has picked up and has now, has now offering a different type of lifestyle. So more and more Mexicans are looking to actually purchase and live here as well.
Real estate oversupply in Playa del Carmen
LADISLAS MAURICE: And I just a warning, so when investors come here, I think Canadians and Americans will understand this concept, but this is more of a warning for Europeans. You want to be very careful when you invest to not just be looking at like price per square meter or price per square foot because that’s what is often done in Europe. If you buy cheap, then it means you’re going to make good rental income. Here, the market has a lot of supply. So there’s a lot of very average apartments on the market that are with very average amenities that are not necessarily cheap. So you need to somehow differentiate yourself and you need to be extremely clear with your target market. So depending on your target market, so here for example, if you wanted to just aim for higher-end digital nomads, this building is perfect. And some investors will say, Luigi, I just want to invest in these three buildings because they tick all the boxes for high-end digital nomads that are not that price sensitive, and then you can increase your yield this way. So really the biggest mistake is just buying some average unit in a very average apartment building that doesn’t have anything special with a very average rooftop pool, because also, you know, rooftop pools are relatively common, but they’re not all the same. You know, coming from Europe where a rooftop pool is quite rare, then you come here, you’re amazed, but actually, you know what, Americans are not amazed, the main target market. You have to be very careful and very targeted in your approach.
LUIGI: Absolutely. Yeah, you have to be close to certain amenities, close to supermarkets. Most people when they come here, they don’t have cars, so they want to take, you know, they don’t have to walk or if it’s raining and, and if it takes too far away, they’re taking taxis all the time to go to the supermarket. So you have to be close to certain amenities. It’s very important that you do a checklist and make sure that the building that you’re looking at checks off the majority of that on your checklist, otherwise it may not do as well as your, as you’re saying.
LADISLAS MAURICE: Or you’re going for a different target market, and that’s fine, but then you need to be clear with your exact target market. It’s not an easy market to understand, I’ll put it this way.
LUIGI: Yeah.
Touring a one bedroom apartment in Playa del Carmen
LADISLAS MAURICE: All right, so now we’re going to go check out an apartment, right?
LUIGI: We’re going to look at a one-bedroom. Uh, the renter is in there. She’s waiting for us, but it’s an example of a one-bedroom, and we also have two bedrooms in, in the building as well.
LADISLAS MAURICE: All right, let’s go.
LUIGI: All right. So, this is a one-bedroom. This is your typical one-bedroom in this building, which is very rentable. Lots of people looking to live here. This does really well on the rental market, long-term, medium-term, and also it sells. We always have buyers ready to buy the one-bedrooms here because it’s a great location. People want to live here.
Liquidity in Riviera Maya property market
LADISLAS MAURICE: This is actually important for people to understand. Liquidity in Mexico is not the same liquidity as you are used to in Canada, in the US, or Western Europe. So when Luigi says it sells, this actually matters because typically here what, a year to sell something?
LUIGI: It could, like on the resale, on the on the secondary market, it could kick up to a year to sell a property, but this is a well-known building. People are waiting to get into this building. And so we’ve already turned over quite a few units in here. So it’s a popular building. Yeah.
LADISLAS MAURICE: Just this by itself is worth a bit of a premium when buying.
LUIGI: Yeah, absolutely.
Interview with a resident in Playa del Carmen
LADISLAS MAURICE: So Ximena, you’re originally from Cancun, right?
XIMENA: Yeah, I’m from Cancun.
LADISLAS MAURICE: Cool. So why did you choose to move here to this particular building?
XIMENA: Well, first, I have no idea about Playa, to be honest. Like I know Cancun is kind of a, you know, 40 minutes from here, right? But honestly, I’ve never been here, and first time I took the car, right? And drive here, that was like the most, you know, really good vibe, safety place that I found, and I totally like stopped looking and said, wow, I have to live here.
LADISLAS MAURICE: Okay, cool. So you’re happy in this building?
XIMENA: Oh, I’m so happy. I’ve been, you know, like kicking up like many times because there’s a, you know, they sell the units. Yeah, but to be honest, I’ll never want to move. So I’ll be finding, you know, like some other units to live.
LADISLAS MAURICE: So you get bounced from apartment to apartment as they get sold? Okay, all right.
XIMENA: Yeah, you know, like we have this joke for me and security and every people who, who works here and lives here that, hey, you never want to leave, right? I’m like, yeah, nunca nos vamos a ir. It’s a really like, you know, like a Spanish joke. I love here.
Doing Airbnb in Playa del Carmen
LADISLAS MAURICE: Okay. And do you see a lot of people doing Airbnb or do you see a lot of people who live here full-time? What’s the mix?
XIMENA: Wow. Uh, to be honest, I think just in winter, like the whole year, I’ve been seeing Airbnbs, of course, because oh, that, that’s an amazing thing, right? You can realize who’s Airbnb people or who’s like long-term because they do bracelets and that’s a such a great idea.
LADISLAS MAURICE: Why?
XIMENA: So, because you can realize, right? I mean, you’re in the lobby, no, all the.
LADISLAS MAURICE: You don’t like the Airbnb people.
XIMENA: Yeah, yeah, yeah, and then you notice right, oh, he has a bracelet. So it’s an Airbnb. But to be honest, there’s, yeah, there’s a mix. So winter, it’s full.
LADISLAS MAURICE: And amongst the long-term tenants, is it mostly expats or Mexicans?
XIMENA: I think also it’s a mix. And actually, you know what, I think I’m the only Mexican. No, I’m just kidding. I don’t know, but it’s a mix.
LADISLAS MAURICE: Okay, cool. Fantastic. So thank you Ximena. Thanks for letting us show your apartment.
XIMENA: No, you’re welcome, more than welcome.
ROI calculation for vacation rental in Playa del Carmen
LADISLAS MAURICE: So how much is this property going for?
LUIGI: 250,000, and then with the closing cost, you’re about 260, 67,500.
LADISLAS MAURICE: What about the rental income?
LUIGI: Rental income is great. So this apartment’s doing 1,600 a month for a one-year lease. Go down or up a little bit depending on the season, and on the short-term market, obviously, it does really, really well on Airbnb. It’s a very popular building as we already mentioned, so Airbnb does really, really well. Again, that can range, but obviously your costs go up a little bit on that one. Yeah.
LADISLAS MAURICE: What would be your projected occupancy rate on a one-year lease?
LUIGI: On a one-year lease, here, because there’s always people waiting to come into this building, I’d say maybe 95% occupancy. Like once someone moves out, you’re pretty fast to find the next one. It shows really well. I think this developer, as I mentioned, is a really well-known developer. I think this is their most successful project because of the supermarket and everything so close by. This is where people want to live and stay. And the expats come here for six months of the year and they keep renting the same unit, and they come back every year. It’s a very popular building.
LADISLAS MAURICE: I think the point that you mentioned when you said the rent is 1,600, either a bit more or a bit less depending on the season, which is a bit odd for a yearly contract. But the reasoning is that when you look for tenants in the low season, so say July, August, there’s a bit less demand, so you’ll have to lower your yearly rate a bit. But if you’re looking for a tenant in January, when people are really struggling to find a one-year lease, where it’s practically impossible to find a one-year lease, then you as the landlord have a bit more negotiating power to increase the rent. So it’s a, in markets where there’s a lot of seasonality, it also impacts long-term leases depending on when it was signed.
LUIGI: Exactly. Yeah.
LADISLAS MAURICE: So let’s go into costs. What about the HOA, property management, all that?
LUIGI: So on a yearly basis, the HOA for that apartment was 2,300 a year. Uh, the property tax is 300 a year, which is very low compared to most cities. We have obviously a little bit of a budget, if you want to put a budget for maintenance, you can put a 300, 400 dollar, budget up to 500 dollars aside for any little maintenance you need to do. In the contract, you can have the tenant be responsible for certain types of maintenance that, for like air conditioning, certain things that might break, wear and tear that they might have broken. So there’s certain things, so you don’t have to put a huge budget aside. We also have the trust as a foreigner in the restricted zone, we are 50 kilometers within the coast, so you’re going to have to buy with the bank trust. That’s about 600 dollars a year. And then if you have a person that is down here taking care of your property, to pay your bills for you, so kind of like a property manager, not on site, just offsite, that kind of handles it for you. You’re looking probably around 1,800 a year just to pay them, you know, a little bit of money every month to make sure the place is okay. And then also if you are out of town and you need to find a renter, then you can use the rental agents in town, and they typically take a one month’s rent commission if they sign a one-year lease, they’ll take one month, or if they sign a six-month lease, they’ll take half a month, uh, rent as a commission. So those are pretty much all the costs, which gave us about 11,000 a year in revenue, which is about a 4% return, which is not bad. But again, you’re buying in a building that in the future can use, you can use and retire into this building and all the amenities are great. So I think all in all, it’s just a great opportunity in this building.
LADISLAS MAURICE: An Airbnb would do better. It’s hard to quantify Airbnb because of the seasonality, and then also the tax implications of Airbnb. I just really do not want to go into Mexican taxes, because there’s just so many different interpretations of Mexican taxes. Some people tell you Airbnb’s terrible tax-wise, other accountants find solutions and then you end up paying very little. I’m not going to have this conversation, but the point is on Airbnb, it would do well here.
Lock-off units in Playa del Carmen
LUIGI: Absolutely, it does well. And then also some people ask us, well, if I don’t want a one-bedroom, I want a two-bedroom. There are two bedrooms in this building, and they’re quite large. And there’s two-bedroom lock-offs. We know people here who have lived in the large portion of the, uh, lock-off, so the main portion of the, uh, of the condo, which has a bedroom and a kitchen and living room, and then they lock off and rent out the second bedroom on a nightly or, you know, a weekly basis. And that generates an income, and we have a friend here that was renting out and running her own lock-off, renting it out, cleaning it, and living in the main part of the condo, and that lock-off was paying about 70% of her rent, up to 75% of her rent for the year. So, you know, there’s lock-off units here as well, for someone who’s looking for a two-bedroom and maybe want to store their stuff in the lock-off as well, or maybe coming to town and just spend the night, not interrupt the rental revenue from the main part of the condo. So there there’s some flexibility. So we do have units as well in this, uh, building that are two-bedroom lock-offs.
Tax implications of Airbnb in Playa del Carmen
LADISLAS MAURICE: I just want to touch base on the topic of Airbnb. Look, generally speaking in Playa del Carmen, there’s oversupply of Airbnb. So most people who buy Airbnbs don’t do very well. And then on top of it, if your accountant has a certain interpretation of Mexican taxes, then you really get murdered, and the reality is that in most cases, the or mid-term market in Playa del Carmen does better. This being said, if you go into a few specific buildings that are typically more premium, then you can actually do very well on Airbnb, but it’s very specific. It’s not just some average apartment, because that’s the problem. Most apartments are on Airbnb are very average and not very well maintained, and the building, but in a few select places, it will do well. And then you combine this with an accountant that has a favorable interpretation of, you know, your personal tax situation, and then you can end up doing reasonably well on Airbnb. So it’s not straightforward. I think that’s what I really want to say.
LUIGI: Yeah, it’s true, there is a lot of inventory. However, if you are passionate about short-term rentals, you’ll do better than someone who’s just giving the keys to somebody else and letting them run it. And again, if you find unique buildings like this one, then in the good location, then there’s still opportunity to do well in the short-term rental market because there is a lot of people coming here and they need a place to stay. But yeah, you’re right. There is a lot of competition. You need to find something unique and run it well.
How to contact Luigi to buy Playa del Carmen real estate
LADISLAS MAURICE: I wrote a whole article on the real estate market here in Playa del Carmen, the neighborhoods that you should look into, the neighborhoods you should avoid, some of the key learnings, etc. So there’s a link below in the description. And if you want to get in touch with Luigi, there’s also a link below in the description. Luigi.
LUIGI: Thank you. I appreciate it. All right.
LADISLAS MAURICE: Make sure to download my free e-book, 12 Mistakes to Avoid When Investing in International Real Estate, which you can find on my website, link below. And feel free to follow me on Instagram @thewanderinginvestor. I look forward to hearing from you.
