Authored by the expert who managed and guided the team behind the Mexico Property Pack
Yes, the analysis of Mexico City's property market is included in our pack
Mexico City's Airbnb market offers strong rental yields for well-positioned properties, with gross returns ranging from 8% to 14% in prime neighborhoods. The city's thriving tourist scene and growing digital nomad population create consistent demand for short-term rentals, particularly in trendy areas like Roma Norte and Condesa where properties can generate $20,000-$25,000 annually in gross income.
However, profitability depends heavily on location, property type, and management efficiency, with net yields typically settling around 5-7% after accounting for cleaning fees, utilities, platform commissions, and Mexico's tax obligations for short-term rentals.
If you want to go deeper, you can check our pack of documents related to the real estate market in Mexico, based on reliable facts and data, not opinions or rumors.
Mexico City Airbnb properties in Roma Norte and Condesa generate the highest returns, with 1-2 bedroom apartments achieving gross yields of 8-14% and occupancy rates around 55-77%.
Net profitability typically ranges from 5-7% after expenses, while regulatory changes and market saturation pose growing risks to long-term returns.
| Property Type | Average Nightly Rate | Annual Gross Income | Net Yield Range |
|---|---|---|---|
| Studio (Roma Norte) | $65-85 | $15,000-18,000 | 5-6% |
| 1-Bedroom (Condesa) | $80-100 | $20,000-22,500 | 6-7% |
| 2-Bedroom (Polanco) | $120-160 | $25,000-30,000 | 6-8% |
| 3+ Bedroom (Premium areas) | $180-250 | $30,000-40,000 | 5-7% |
| Budget neighborhoods | $35-55 | $8,000-12,000 | 4-5% |
| Luxury villas | $300-500 | $50,000+ | 7-9% |
| Average citywide | $59 | $13,000 | 5-6% |
What types of properties in Mexico City perform best on Airbnb?
Entire apartments dominate Mexico City's Airbnb market, making up 71% of all active listings.
Well-decorated apartments and condos generate the strongest returns, particularly 1-2 bedroom units that accommodate couples and solo travelers. These properties typically earn between $20,000-$25,000 annually in prime neighborhoods like Roma Norte and Condesa.
Luxury multi-bedroom villas and mansions in premium areas achieve the highest gross revenue figures, often exceeding $40,000 per year. However, these properties face higher vacancy rates and management costs compared to smaller units.
Studios perform well for consistent occupancy but generate lower absolute income, while 3+ bedroom properties appeal to families and groups but experience more seasonal fluctuation in bookings.
As of September 2025, apartments and condos represent about 79% of Mexico City's short-term rental inventory, reflecting strong guest preference for privacy and independent living space.
Which neighborhoods attract the most Airbnb guests and why?
Roma Norte leads Mexico City's Airbnb market due to its trendy atmosphere, walkable streets, and vibrant arts scene.
| Neighborhood | Average Nightly Rate | Guest Appeal |
|---|---|---|
| Roma Norte | $91 | Trendy bars, restaurants, art galleries, young travelers |
| Condesa | $80 | Leafy streets, upscale cafes, safe, tourist-friendly |
| Polanco | $120-160 | Luxury shopping, fine dining, business travelers |
| Centro Histórico | $65 | Museums, architecture, cultural attractions |
| Coyoacán | $70 | Colonial charm, Frida Kahlo Museum, local experience |
| Zona Rosa | $75 | Nightlife, LGBTQ+ friendly, central location |
| Santa Fe | $85 | Modern business district, corporate travelers |
These neighborhoods combine prime location, tourist attractions, safety, and quality amenities to deliver consistently high occupancy rates and nightly rates above the city average of $59.
How does property size affect Airbnb rental performance?
Studios and 1-bedroom apartments generate the most consistent bookings in Mexico City, appealing primarily to solo travelers and couples.
One-bedroom units represent 41-44% of all Airbnb listings and typically accommodate 2-4 guests, making them the sweet spot for reliable occupancy. These properties achieve occupancy rates of 60-75% in prime locations.
Two to three-bedroom apartments balance consistent demand with higher nightly rates, often generating 20-30% more revenue than studios while maintaining solid occupancy. They appeal to small groups, families, and longer-stay guests.
Four-bedroom properties and luxury houses achieve the highest gross revenue but experience more variable occupancy patterns. These larger properties work best in "destination" neighborhoods like Roma Norte and Condesa where groups specifically seek upscale accommodations.
It's something we develop in our Mexico property pack.
What are the average nightly rates across different areas and property types?
Mexico City's median Airbnb rate sits at $59 per night across all property types and neighborhoods.
Strong-performing properties in desirable areas command $99 per night on average, while the top 10% of listings achieve $165 or more per night. Roma Norte averages $91 nightly, Condesa reaches $80, and upscale Polanco properties typically range from $100-$160 for luxury accommodations.
Budget neighborhoods and outer districts generate $35-$55 per night, making them suitable for cost-conscious travelers but offering lower absolute returns for property owners.
Property type significantly impacts rates, with entire apartments commanding premium pricing over shared accommodations. Well-furnished, professionally managed properties consistently outperform basic listings by 30-40% in the same neighborhoods.
Seasonal variations affect these rates, with peak months (March and October) pushing average daily rates to $94 citywide, while slower periods (July and September) see rates drop to $84-$87.
What are typical occupancy rates throughout the year?
Mexico City Airbnb properties achieve a median occupancy rate of 55% year-round, with peak-performing properties reaching 77-89%.
1. **Seasonal highs occur in March and October** - Revenue and bookings peak during these months, with occupancy rates reaching 61% and average daily rates of $942. **Summer and early fall represent the slowest periods** - July and September see occupancy drop to 42-48% with lower daily rates of $84-873. **Holiday periods boost performance** - December and January benefit from holiday travel, pushing occupancy above average4. **Business travel supports weekday bookings** - Monday through Thursday bookings remain steady due to Mexico City's role as a business hub5. **Weekend rates typically increase 15-25%** - Friday and Saturday nights command premium pricing across all neighborhoodsBest-in-class hosts and properties in prime locations consistently achieve occupancy rates above the median, often reaching 70-80% annually through professional management and strategic pricing.
Don't lose money on your property in Mexico City
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What does gross rental income typically look like for well-located properties?
Average annual gross income across Mexico City reaches approximately $13,000 for Airbnb properties, but well-located properties significantly outperform this benchmark.
Prime Roma Norte properties generate up to $25,000 annually, while comparable Condesa apartments achieve around $22,500 per year. These figures represent properties with consistent 60-75% occupancy and above-average nightly rates.
A sample well-performing 1-bedroom apartment in Roma Norte generates $1,700 monthly in gross revenue during peak performance periods. This translates to gross yields of 10-12% for properties purchased at current market prices.
Luxury properties in Polanco and premium neighborhoods can exceed $30,000-$40,000 annually, with some high-end villas generating $50,000 or more. However, these properties require higher initial investment and face greater management complexity.
Gross yields for short-term rentals typically range from 8-14% in tourist-heavy areas, substantially higher than traditional long-term rental yields of 3-6% in the same neighborhoods.
What does net rental income look like after all expenses?
Net rental income typically ranges from 5-7% after accounting for all operational expenses and platform fees.
Major expense categories include cleaning and utilities (25-35% of gross income), Airbnb and booking platform commissions (12-15% of gross), and maintenance and repairs (5-10% of gross). Additional costs cover insurance, property management, and supplies.
For a well-located Roma Norte apartment generating $1,700 monthly gross income, net income after expenses typically ranges from $1,105-$1,275 monthly. This represents a net yield of 6-7% annually.
Higher-end properties face increased expense ratios due to premium cleaning requirements, luxury amenities maintenance, and professional management fees. Budget properties may achieve slightly better expense ratios but generate lower absolute income.
It's something we develop in our Mexico property pack.
How do gross yields compare to net yields once expenses are considered?
Gross yields in Mexico City's Airbnb market typically range from 8-14%, while net yields settle at 5-7% after all expenses.
| Yield Type | Calculation Method | Typical Range |
|---|---|---|
| Gross Yield | Annual rental income ÷ property value | 8-14% |
| Net Yield | Income after all expenses ÷ property value | 5-7% |
| Expense Ratio | Total expenses ÷ gross income | 35-45% |
| Platform Fees | Airbnb/booking commissions | 12-15% |
| Operating Costs | Cleaning, utilities, maintenance | 25-35% |
| Tax Impact | Income tax and VAT obligations | Variable |
| Management Fees | Professional management (if used) | 10-20% |
The gap between gross and net yields reflects the intensive management requirements and regulatory costs associated with short-term rentals in Mexico City.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Mexico versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
Would long-term rental strategy generate better returns than Airbnb?
Airbnb generates 30-40% higher income potential compared to long-term rentals in Mexico City, but requires significantly more management effort.
Long-term rentals offer greater stability with gross yields of 5-6% and minimal management requirements. Net yields closely match gross yields at 3-4% since operating expenses remain lower for traditional rentals.
Short-term rentals face higher operational costs, tax obligations, and regulatory risks but can achieve net yields of 5-7% when properly managed. The income advantage becomes more pronounced in tourist-heavy neighborhoods where demand supports premium pricing.
Mexico City's current 180-day annual limit for short-term rentals in certain areas reduces the potential advantage of Airbnb over traditional leasing. This regulation forces property owners to either blend short and long-term strategies or accept reduced income potential.
Long-term rentals provide predictable monthly income without seasonal fluctuations, making them suitable for investors prioritizing cash flow stability over maximum returns.
What regulations and taxes apply to Airbnb hosting in Mexico City?
Mexico City maintains relatively lenient Airbnb regulations as of September 2025, but authorities have implemented tightening restrictions.
Current regulations include a 180-day annual cap for short-term rentals in many neighborhoods, limiting the ability to maximize rental income throughout the year. Some areas require specific licensing, though requirements vary by district.
Tax obligations include income tax (ISR) up to 35% on all rental income, 16% VAT on short-term rental services, and additional local lodging taxes ranging from 3-5%. These tax rates significantly exceed those applied to long-term rentals.
Property owners must register with tax authorities and maintain detailed records of all rental transactions. Failure to comply with tax obligations can result in substantial penalties and legal complications.
It's something we develop in our Mexico property pack.
How competitive is the Mexico City Airbnb market?
Mexico City hosts approximately 24,000-26,000 active Airbnb listings as of mid-2025, creating significant competition in popular neighborhoods.
Roma Norte, Condesa, and Polanco represent the most saturated markets, with hundreds of properties competing for the same guest demographic. However, these areas continue offering the highest returns due to persistent strong demand from tourists and business travelers.
The rise of professional Superhost operators and management companies has elevated service standards across the market. Properties without professional management or high-quality amenities struggle to maintain competitive occupancy rates.
New market entrants face challenges differentiating their properties in oversaturated neighborhoods, while experienced hosts with established reviews and repeat guests maintain competitive advantages.
Market saturation remains manageable in prime areas due to Mexico City's growing tourism industry and increasing digital nomad population, but competition continues intensifying.
What risks could impact long-term Airbnb profitability?
Regulatory changes represent the primary risk to Mexico City Airbnb profitability, with authorities considering stricter short-term rental limitations.
1. **Regulatory tightening** - Further restrictions on rental days, licensing requirements, or neighborhood-specific bans could significantly reduce income potential2. **Market saturation in prime areas** - Continued supply growth may outpace demand, leading to declining occupancy rates and price pressure3. **Safety and security concerns** - Properties in unsafe neighborhoods face lower demand and reduced rental rates, affecting long-term viability4. **Economic downturns** - Tourism decline or travel restrictions can dramatically impact booking volume and pricing power5. **Platform dependency risks** - Changes to Airbnb policies, commission structures, or algorithm preferences can affect property visibility and bookingsHigh operating costs including cleaning, maintenance, and utilities create ongoing financial pressure that can erode profitability during slow periods. Insurance costs for short-term rentals typically exceed those for long-term properties.
Local sentiment changes toward short-term rentals could lead to neighborhood-level restrictions or increased enforcement of existing regulations, particularly in residential areas experiencing overtourism.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Mexico City's Airbnb market offers compelling returns for well-positioned properties, with gross yields reaching 8-14% in prime neighborhoods like Roma Norte and Condesa.
However, success requires careful consideration of location, property type, management efficiency, and evolving regulatory landscape to achieve sustainable net yields of 5-7%.
Sources
- AirROI Mexico City Market Report
- Airbtics Annual Airbnb Revenue Analysis
- Inside the Upgrade Neighborhood Guide
- Vite Presenta Neighborhood Comparison
- Global Property Guide STR Costs
- The LatinVestor Average Rent Analysis
- Garrigues STR Regulation Overview
- Inside Airbnb Mexico City Data
- AutoHost Investment Location Guide
- Hostaway Mexico Investment Guide