Authored by the expert who managed and guided the team behind the Uruguay Property Pack
Yes, the analysis of Montevideo's property market is included in our pack
Montevideo's Airbnb market offers solid returns for property investors willing to navigate seasonal fluctuations and operational complexities. The Uruguayan capital attracts steady tourist demand with annual occupancy rates ranging from 48% to 69%, depending on neighborhood and property quality.
As of September 2025, the most profitable Airbnb properties are located in upscale neighborhoods like Carrasco and Pocitos, where nightly rates reach $87-$105 and well-managed properties can generate annual gross returns 20-40% higher than traditional long-term rentals during peak seasons.
If you want to go deeper, you can check our pack of documents related to the real estate market in Uruguay, based on reliable facts and data, not opinions or rumors.
Airbnb properties in prime Montevideo neighborhoods like Carrasco and Pocitos can achieve annual gross returns 20-40% higher than long-term rentals, with average nightly rates of $87-$105.
However, after factoring in cleaning fees, management costs, taxes, and seasonal variability, net yields typically range from 3.8% to 5.0%, often comparable to or slightly lower than long-term rental yields.
| Neighborhood | Average Nightly Rate | Annual Occupancy | Property Price Range | Gross Annual Revenue |
|---|---|---|---|---|
| Carrasco | $95-$105 | 60-70% | $280,000-$400,000 | $12,000-$15,000 |
| Pocitos | $87-$95 | 69% | $200,000-$270,000 | $10,000-$14,655 |
| Punta Carretas | $90-$100 | 55-65% | $250,000-$350,000 | $11,000-$14,000 |
| Ciudad Vieja | $45-$60 | 48-55% | $80,000-$180,000 | $6,000-$9,000 |
What are the most popular neighborhoods in Montevideo for Airbnb rentals?
Carrasco stands out as the most profitable neighborhood for Airbnb investments in Montevideo.
This upscale residential area attracts premium guests seeking tranquility and luxury amenities, with properties located steps from the beach and near high-end establishments like the Sofitel hotel. Families and business travelers particularly favor Carrasco for extended stays.
Pocitos ranks as the second most popular choice, offering a vibrant mid-tier option close to the Rambla and Montevideo Shopping. The neighborhood maintains a 69% annual occupancy rate, the highest in the city, thanks to its appeal among tourists and young professionals. Properties with sea views command premium rates here.
Punta Carretas and Punta Gorda form another premium cluster, featuring busy shopping and dining districts that attract both leisure tourists and business travelers. These areas benefit from excellent infrastructure and consistent demand throughout the year.
Ciudad Vieja (Old Town) appeals to budget-conscious travelers and cultural enthusiasts seeking authentic local experiences. While nightly rates are lower, the historic area maintains steady occupancy due to its cultural attractions and lively nightlife scene.
What types of properties tend to perform best for Airbnb in Montevideo?
Entire apartments and houses with 1-4 bedrooms deliver the strongest performance in Montevideo's Airbnb market.
Properties featuring balconies, sea views, or river views consistently outperform standard units, commanding 15-25% higher nightly rates. Outdoor space has become increasingly valuable, especially in post-pandemic travel preferences where guests prioritize privacy and fresh air access.
Studios and lofts in central locations, particularly Ciudad Vieja, attract short-stay visitors and digital nomads. These properties excel due to their strategic positioning near cultural attractions and business districts, despite their smaller size.
Houses with luxury amenities in Carrasco represent the premium segment, attracting high-income guests and families willing to pay $120-150 per night. Features like private pools, parking spaces, and premium decor significantly impact booking rates and guest satisfaction scores.
It's something we develop in our Uruguay property pack.
How much does a typical property cost in the best Airbnb areas?
Property prices in Montevideo's top Airbnb neighborhoods vary significantly based on location and quality.
| Neighborhood | Price per sqm | Typical Apartment Price | Typical House Price |
|---|---|---|---|
| Carrasco | $4,260 | $280,000-$350,000 | $350,000-$500,000 |
| Punta Carretas | $4,000+ | $250,000-$300,000 | $320,000-$450,000 |
| Pocitos | $3,500 | $200,000-$270,000 | $280,000-$380,000 |
| Ciudad Vieja | $1,800-$2,500 | $80,000-$140,000 | $120,000-$220,000 |
| Budget Areas | $750-$875 | $70,000-$100,000 | $90,000-$150,000 |
What occupancy rates can hosts realistically expect throughout the year?
Annual occupancy rates in Montevideo range from 48% to 69%, with significant seasonal variations affecting profitability.
Pocitos leads with the highest annual occupancy at 69%, benefiting from its beachfront location and excellent connectivity. The neighborhood maintains consistent bookings due to its appeal among both leisure and business travelers.
Citywide averages hover between 48% and 74%, depending on property quality, management efficiency, and neighborhood desirability. Well-managed properties with professional photography and responsive hosts typically achieve occupancy rates 10-15% above neighborhood averages.
Peak season from December to March delivers occupancy rates of 70-80%+, coinciding with Uruguay's summer tourism boom and major cultural events. During these months, properties in beachside neighborhoods like Carrasco and Pocitos often achieve near-maximum occupancy.
Winter months (June-August) see occupancy drop to 30-45%, particularly affecting beachfront properties. However, business districts and central areas maintain more stable demand at 40-55% occupancy due to corporate travel and conference activity.
Don't lose money on your property in Montevideo
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 is the average nightly rate guests are willing to pay in Montevideo?
The citywide average nightly rate in Montevideo stands at $64 per night as of September 2025.
Premium neighborhoods command significantly higher rates, with Pocitos, Carrasco, and Punta Carretas achieving $87-$105 per night for quality properties. These areas justify premium pricing through superior amenities, beach access, and proximity to major attractions.
Studios in Ciudad Vieja typically earn $45-$60 per night, appealing to budget-conscious travelers and backpackers exploring the historic quarter. Despite lower rates, these properties often achieve higher occupancy due to their affordability and cultural appeal.
Luxury houses with premium amenities in Carrasco can command $120-150 per night during peak season, particularly those featuring pools, parking, and sea views. These properties target affluent families and groups willing to pay for privacy and comfort.
Seasonal pricing fluctuations are significant, with peak season rates increasing 40-60% above off-season pricing. Successful hosts implement dynamic pricing strategies to maximize revenue during high-demand periods while maintaining competitiveness during slower months.
How does the gross rental income compare with long-term rental options?
Short-term Airbnb rentals can generate 20-40% higher gross returns than long-term leasing in Montevideo's best areas during peak months.
Well-managed Airbnb properties in Pocitos achieve annual gross revenues up to $14,655 for 1-2 bedroom units, significantly outperforming traditional rental yields. This performance depends heavily on professional management, optimal pricing strategies, and property quality.
Long-term rentals in comparable areas generate monthly rents of $600-$1,200 for 2-bedroom apartments, resulting in annual gross income of $7,200-$14,400. While more predictable, these returns lack the upside potential of successful short-term rentals.
The gross yield advantage of Airbnb diminishes significantly when factoring in operating expenses, vacancy periods, and management complexity. Long-term rentals maintain consistent 4.97% gross yields with minimal management overhead.
Airbnb success requires active management or professional services, while long-term rentals offer passive income with less operational involvement. The choice depends on your time availability and risk tolerance for income variability.
What are the usual operating expenses for Airbnb properties in Montevideo?
Operating expenses for Airbnb properties in Montevideo typically consume 35-50% of gross rental income.
Cleaning costs range from $40 for studios to $155 for large houses, representing a significant per-stay expense that impacts profitability. Professional cleaning services are essential for maintaining guest satisfaction and positive reviews.
Utilities are typically included in the nightly rate but add 5-20% to operating costs depending on property size and guest usage patterns. Air conditioning during summer months can significantly increase electricity bills.
Management fees range from 10-20% of gross income for professional services, covering guest communication, booking management, and maintenance coordination. Self-management saves money but requires significant time investment.
Maintenance and repairs average $70-$200+ monthly, with higher costs for older properties or those with amenities like pools. Regular upkeep is crucial for maintaining property appeal and guest satisfaction ratings.
Airbnb platform fees consume 3-20% of revenue, varying based on host service level and booking channel. These fees are unavoidable costs of accessing the platform's global guest network.
What local taxes and Airbnb fees need to be factored into calculations?
Uruguay imposes a 22% VAT on Airbnb platform fees, directly impacting your operating costs.
Rental income tax follows Uruguay's progressive tax structure, with possible deductions for legitimate operating expenses including maintenance, utilities, and management fees. Proper documentation of all expenses is essential for tax optimization.
Foreign property owners face no restrictions on short-term rental operations, making Uruguay attractive for international investors. However, individual condominium buildings may impose their own restrictions on short-term rentals.
Registration and tax filing requirements apply to all hosts, regardless of income level. Compliance with local tax obligations is mandatory and should be factored into your financial projections from the start.
It's something we develop in our Uruguay property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Uruguay 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.
After expenses and taxes, what does the net yield usually look like?
Net yields for Airbnb properties in Montevideo typically range from 3.8% to 5.0% after all expenses and taxes.
Quality properties in prime areas like Carrasco and Pocitos achieve the higher end of this range when professionally managed with optimal occupancy rates. These properties benefit from premium pricing and consistent demand throughout the year.
Properties in Ciudad Vieja often achieve lower net yields despite higher gross rental ratios due to increased maintenance costs and higher vacancy rates during off-peak periods. Older building infrastructure can significantly impact ongoing maintenance expenses.
Long-term rentals frequently deliver steadier returns at the top of this range (4.5-5.0%) with significantly lower management complexity and operational risk. The predictable income stream appeals to passive investors seeking stable returns.
Well-managed Airbnb properties may surpass long-term rental yields during peak seasons but face greater income volatility and operational demands. Success depends heavily on property selection, management quality, and market positioning.
What are the local regulations and restrictions for short-term rentals in Montevideo?
Montevideo maintains relatively lenient regulations for short-term rentals compared to other major cities globally.
The city and departmental governments impose no foreign ownership limits or rent controls on short-term rental operations. This regulatory environment makes Uruguay attractive for international property investors seeking minimal bureaucratic interference.
Individual building or homeowner association rules sometimes restrict short-term rentals, requiring careful due diligence before property purchase. Always verify building bylaws and HOA regulations during the buying process to avoid future operational limitations.
Registration and tax filing requirements apply to all hosts, but the process remains straightforward compared to heavily regulated markets like New York or Barcelona. Compliance costs are minimal but mandatory for legal operation.
No specific licensing requirements exist for short-term rental operations, though standard business registration may be required for professional management companies. This regulatory simplicity reduces barriers to entry for new investors.
How stable is demand for Airbnb properties in Montevideo?
Demand for Airbnb properties in Montevideo shows clear seasonal patterns with strong peak season performance.
Summer months (December-March) drive the highest demand, coinciding with Uruguay's tourism peak, cultural events, and favorable weather. International visitors from Argentina, Brazil, and Europe particularly boost booking volumes during this period.
Winter months experience lower but steady occupancy, especially from business travelers and digital nomads seeking affordable long-term stays. The reduced tourist flow impacts beachfront properties more than central business districts.
Historic areas like Ciudad Vieja and established neighborhoods like Pocitos demonstrate more stable year-round performance due to their cultural attractions and business district proximity. These areas are less dependent on seasonal tourism fluctuations.
Corporate events, conferences, and regional business travel provide baseline demand throughout the year, supporting occupancy rates during traditionally slower periods. Montevideo's role as a regional business center helps stabilize the short-term rental market.
It's something we develop in our Uruguay property pack.
Would investing in a long-term rental be more profitable than Airbnb in Montevideo?
Long-term rentals often deliver superior net profitability for passive investors in Montevideo.
While Airbnb can generate 20-40% higher gross returns during peak seasons, the operational complexity, management costs, and income volatility often erode this advantage. Long-term rentals provide steadier 4.5-5.0% net yields with minimal management overhead.
Professional Airbnb management in premium areas can outperform long-term rentals, but success requires hands-on involvement or quality management services that consume 10-20% of gross income. The time investment and operational risk may not suit all investors.
Market saturation risks affect Airbnb more than long-term rentals, as increasing supply can rapidly impact occupancy rates and pricing power. Long-term rental demand remains more stable and predictable over time.
For investors prioritizing passive income and minimal operational involvement, long-term rentals typically provide better risk-adjusted returns. Active investors willing to manage seasonality and operations may prefer Airbnb's upside potential in prime locations.
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.
Airbnb properties in Montevideo's premium neighborhoods can generate attractive returns for hands-on investors willing to manage seasonal fluctuations and operational complexity.
However, long-term rentals often provide superior risk-adjusted returns for passive investors seeking stable income streams without the operational demands of short-term rental management.
Sources
- Airbnb Uruguay Listings
- AirROI Montevideo Market Report
- Airbnb Montevideo Houses
- Average House Price in Uruguay - The LatinVestor
- Uruguay Price Forecasts - The LatinVestor
- CozyCozy Montevideo Vacation Rentals
- Airbtics Montevideo Revenue Analysis
- Global Property Guide Uruguay Rental Yields
- Montevideo Property Market - The LatinVestor
- Airbnb Tax Information