5 Steps to Create Short-Term Rental Wealth in Mexico

Mexico is one of the fastest-growing and most popular destinations for short-term vacation rentals, and now is a great time to invest in this market. The demand for short-term rentals has never been higher and the market continues to grow with no end in sight.

Favorable real estate laws, a weak peso, attractive interest rates (currently as low as 4%) broad market appeal, and a booming economy in many of Mexico’s most popular tourist destinations make buying rental properties here an ideal investment opportunity.

Here are 5 steps for how you can create wealth through investing in Mexico’s booming vacation rental market:

Step 1: Outline Your Goals

If the thought of running your own Airbnb business sounds appealing, it’s important to outline your goals before you invest in a property for short-term rentals.

What kind of return on investment are you looking for? What kind of timeline do you have in mind? How much time will you be able to dedicate to managing the property yourself? Do you want this investment to supplement your income, or do you hope it can help fund an early retirement?

This step will help determine what type of property is best suited to your needs. Will this be a part-time gig, where you’re only renting out your place while away on vacation? Or do you want this to be a more serious project that can generate new income streams and build wealth over time?

How involved do you plan to be? Do you know how much work goes into cleaning and maintaining a rental property between guests (and if not, now’s the time to research)? Are there local companies that can take care of maintenance and housekeeping for a reasonable fee so that your workload is limited?

Step 2: Create Your Investment Strategy

Short-term rentals typically demand a higher price per night than traditional long-term rentals. But you need to decide whether that’s the game for you. You might be looking for a rental property to generate income to support your lifestyle and retirement dreams. So, you can either think long-term or short-term with your investment strategy.

Each has its pros, cons, and both are worthy considerations. To make things more confusing, you can also mix both strategies and diversify your portfolio between both options to mitigate risk while maximizing profits as well.

You need to define your investment goals with your short-term rental in Mexico:

What is the required rate of return?
How much money do I want this property to generate? (And how much time am I willing to invest?)
What is my exit strategy? (Sell it or keep it for personal use in retirement)?

Step 3: Choose the Right Property in a Growing Market

Your first step in turning your investment into a short-term rental is to choose the right property. But what makes a great short-term rental? What should you look for when analyzing different properties and choosing where to invest?

Here are some of the key factors that ensure your investment will become a lucrative vacation rental:

Choose a property with unique views of the ocean, jungle, or landscape. Remember: You’re selling an experience that people can’t get in their hometown. Give them breathtaking scenery from their balcony and they’ll be happy to pay for it.
Choose a property with amenities like pools, hot tubs, private lagoons, gourmet kitchens, outdoor fireplaces and more. These are some of the most requested amenities by vacation renters.
Choose an area with growing tourism trends like Tulum or Playa del Carmen. This guarantees demand for short-term rentals will continue to increase over time and keep you income steady as you can expect higher occupy rates.

With these tips in mind, you’re ready to find your dream home! Remember that Mexico offers endless options outside of Cancun as well; areas like Riviera Maya offer beautiful real estate at amazing prices just steps away from pristine beaches in an area rich with culture and history—and tourists love it!

Step 4: Hire the Right Property Management Company (PMC) to Maximize Your ROI

As Airbnb landlords, the two most important things we think you should look for in a property management company is 1) that they have experience managing similar properties to the one you are buying and 2) that they have local knowledge of the area that you are buying.

The second thing is a given—if they’re unfamiliar with your market, there’s no way they can successfully operate in it. They won’t know what your guests will want, how to market to them, or how best to serve them.

But sometimes overlooked is whether or not they have experience running rental properties like yours. If you own a studio condo on the ocean that sleeps four comfortably, it might not make sense to hire a company whose specialty is managing sprawling villas on the hillsides or private residences tucked into quiet neighborhoods. You need someone who understands exactly who will be using your space and what their expectations will be when staying there—and that means hiring someone who has worked with similar units in the past.

Additionally, a PMC with an experienced office staff and an efficient maintenance team will allow your ROI to increase even faster as they can respond immediately to guest needs in order to keep guests happy and occupied longer term than others who don’t have this advantage.

Step 5: Plan Realistically and Enjoy the Journey

This step is the most important one. It’s the only one that you can do right now. Plan realistically and enjoy the journey.

At this point, you’ve seen how fast wealth can be created in Mexico through investing in real estate (especially in short-term rentals). You’ve learned about pricing, distribution channels, and vacation rental management companies. And you’ve learned how to find a great property manager who will take care of the guest experience for your guests and help make sure your property runs smoothly with no headaches for you.

The last thing I’d suggest is to pick a location where you want to invest and start doing some research into properties that interest you.

With an experienced Investor-orientated Real Estate Agent, you can maximize your return on investment and enjoy your time in Mexico.

You know that you have sufficient income to make this investment work, and you know that there’s a lot of potential. Now it’s time to find the right property and the right real estate agent. There are a lot of options out there—how do you narrow it down?

One thing that can be very helpful is finding an investor-orientated real estate agent. This is someone who specializes in helping foreign investors find properties that fit their needs—and if they have been doing this type of work for a while, they have likely built up an impressive network of contacts that will be able to help them guide you toward property purchases with maximum return on investment.

An investor-orientated real estate agent has the expertise needed to guide you through every step of the process seamlessly, so rather than spending your time looking for good deals, hoping for error-free paperwork, and worrying about how much longer things will take (another week? Another month?), your job will simply be to relax and enjoy your new income stream from Mexico!