Authored by the expert who managed and guided the team behind the Mexico Property Pack
Yes, the analysis of Cabo San Lucas' property market is included in our pack
Understanding rental rates in Cabo San Lucas is crucial for anyone considering property investment or relocation to this premier Mexican coastal destination. As of September 2025, the Cabo San Lucas rental market shows strong performance across different property types, with luxury properties commanding premium rates while mid-range options offer stable returns for long-term investors.
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Average rental rates in Cabo San Lucas range from MX$15,000-30,000 monthly for 1-2 bedroom condos to over MX$100,000 for luxury villas, with short-term rentals yielding 6-10% gross returns in prime locations.
Premium oceanfront areas like Medano Beach and Marina command the highest rents, while neighborhoods like El Tezal offer more affordable options for long-term tenants and families.
| Property Type | Monthly Rent (MXN) | Monthly Rent (USD) |
|---|---|---|
| 1-2 Bedroom Condo | MX$15,000-30,000 | $900-1,800 |
| 3 Bedroom Condo | MX$25,000-60,000 | $1,500-3,600 |
| 3 Bedroom House (San José) | MX$25,000-60,000 | $1,500-3,600 |
| Upscale 2-Bed Apartment | MX$30,000-50,000 | $1,800-3,000 |
| Luxury Villas/Penthouses | MX$100,000+ | $6,000+ |
| Non-Touristy 2-Bed | MX$13,500-25,000 | $800-1,500 |
| Premium 5-Bed Villa (Pedregal) | MX$136,000-600,000 | $8,000-35,000 |
What's the current average rent in Cabo San Lucas by property type and size?
As of September 2025, rental rates in Cabo San Lucas vary significantly based on property type and location within the market.
One-bedroom and two-bedroom condos typically rent for MX$15,000 to MX$30,000 monthly, which translates to approximately $900 to $1,800 USD. Three-bedroom condos command higher rates, ranging from MX$25,000 to MX$60,000 per month ($1,500 to $3,600 USD).
Luxury villas and penthouses represent the premium segment of the Cabo San Lucas rental market, with monthly rates exceeding MX$100,000 ($6,000+ USD). These properties often feature oceanfront locations, private pools, and high-end amenities that justify the premium pricing.
Non-touristy areas offer more affordable options, with two-bedroom apartments renting for $800 to $1,500 monthly, while upscale two-bedroom apartments or houses in desirable neighborhoods command $1,800 to $3,000+ monthly.
It's something we develop in our Mexico property pack.
How do average rents vary across the main neighborhoods and areas?
Cabo San Lucas rental market shows distinct pricing patterns across different neighborhoods, with oceanfront and marina areas commanding premium rates.
Pedregal stands out as the most exclusive area, featuring luxury homes with high rental rates that perform well for both short-term and long-term investment strategies. This neighborhood attracts affluent tenants seeking premium accommodations with ocean views and upscale amenities.
Medano Beach, Marina, and Downtown areas achieve the highest occupancy rates and premium rental prices, particularly for short-term rentals through platforms like Airbnb and VRBO. These locations benefit from walkability to beaches, restaurants, and nightlife attractions.
El Tezal, Los Cangrejos, and City Centre neighborhoods offer lower rental rates while remaining popular among families and local workers. These areas provide more affordable housing options while maintaining good access to amenities and services.
San José del Cabo and East Cape areas typically show slightly lower rental rates compared to Cabo proper, making them attractive for families and expats seeking more space and value for their rental budget.
What's the typical total rental price once you include utilities, HOA fees, and other costs?
The total monthly housing cost in Cabo San Lucas extends well beyond the base rental rate, with utilities and fees adding substantial amounts to the overall expense.
Utility costs vary significantly by property type and size. Basic apartments typically incur MX$2,000 to MX$3,500 monthly for utilities, while mid-range properties average MX$3,500 to MX$6,000 monthly. Luxury homes with pools, extensive air conditioning, and multiple systems can reach MX$6,000 to MX$12,000 monthly for utilities alone.
HOA fees represent another significant expense, ranging from $200 to $2,000 monthly (MX$3,400 to MX$34,000), depending on the amenities provided by the development. Properties with extensive amenities like pools, security, and landscaping command higher HOA fees.
Internet and cellular service typically costs $700 to $1,500 monthly (approximately MX$12,000), with luxury properties or those requiring high-speed Starlink connections potentially paying more for premium service.
A typical mid-range condo example would include MX$25,000 rent plus MX$4,000 utilities plus MX$800 HOA fees, totaling approximately MX$29,800 monthly ($1,780 USD).
What's the breakdown of local property taxes, insurance, and maintenance costs for rentals?
Property ownership costs in Cabo San Lucas include several mandatory and optional expenses that rental property investors must factor into their financial calculations.
| Cost Category | Annual Amount | Details |
|---|---|---|
| Property Tax | 0.1-0.2% of assessed value | $1,000-2,500/year for $1M home |
| Fideicomiso Trust | $500-1,500/year | Required for foreign ownership |
| HOA Fees | $3,000-15,000+/year | Varies by amenities and location |
| Home Insurance | $400-800/year | Basic coverage for most properties |
| Maintenance (Luxury) | $3,000-12,000+/year | Pools, landscaping, repairs |
| Property Management | 8-12% of rental income | For professional management services |
| Utilities (Owner Paid) | $2,400-7,200/year | When included in rental rate |
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If you finance the property, what would the monthly mortgage look like at today's rates?
Financing property purchases in Cabo San Lucas as a foreigner involves higher interest rates and larger down payment requirements compared to domestic buyers.
Current mortgage rates for foreign buyers typically range from 7% to 12%, with most lenders requiring 20% to 30% down payment for international investors. These rates reflect the higher risk profile that lenders assign to foreign property investments.
For a $500,000 property with a 30% down payment ($150,000), the remaining $350,000 financed at 8% interest over 20 years would result in monthly payments of approximately $2,600 for principal and interest alone.
Additional monthly costs must be added to the mortgage payment, including property taxes, insurance, and HOA fees, which can add several hundred to over $1,000 monthly depending on the property type and location.
It's something we develop in our Mexico property pack.
What are the best-performing property types and locations for short-term rentals?
Short-term rental performance in Cabo San Lucas strongly correlates with location proximity to beaches, amenities, and tourist attractions.
Medano Beach properties achieve the highest short-term rental performance due to direct beach access and walkability to restaurants and nightlife. These locations command premium nightly rates and maintain high occupancy during peak tourist seasons.
Marina area properties benefit from proximity to luxury shopping, dining, and yacht services, attracting affluent travelers willing to pay premium rates for convenience and luxury amenities.
Pedregal represents the ultra-luxury segment for short-term rentals, with oceanfront villas and penthouses earning $10,000+ monthly during peak seasons. These properties cater to high-net-worth individuals and groups seeking exclusive accommodations.
Properties with specific amenities perform exceptionally well: ocean views, private pools, beach access, and luxury finishes consistently command higher rates and occupancy levels in the short-term rental market.
What are the best-performing property types and locations for long-term rentals?
Long-term rental success in Cabo San Lucas depends on targeting stable tenant demographics including expats, families, and seasonal residents.
El Tezal and Palmilla neighborhoods excel for long-term rentals due to their family-friendly environments, security features, and more affordable price points that attract stable, long-term tenants.
The Corridor area between Cabo San Lucas and San José del Cabo provides excellent long-term rental opportunities, particularly for winter snowbirds from the US and Canada who rent for 3-6 month periods annually.
Properties that perform well for long-term rentals typically include practical amenities like covered parking, reliable internet infrastructure, proximity to schools and services, and reasonable utility costs that don't burden long-term tenants.
Three-bedroom condos and houses in secure developments achieve the best long-term rental performance, providing 4-6% gross rental yields while maintaining lower vacancy rates compared to luxury short-term properties.
Can you give example rental rates for condos, villas, and single-family homes in different areas?
Specific rental examples across Cabo San Lucas demonstrate the wide range of pricing based on property type and location.
| Property Type | Area | Monthly Rent Range |
|---|---|---|
| 2-Bedroom Condo | Downtown Cabo | MX$15,000-30,000 ($900-1,800) |
| 3-Bedroom House | San José del Cabo | MX$25,000-60,000 ($1,500-3,600) |
| 1-Bedroom Apartment | Non-Tourist Areas | MX$13,500-25,000 ($800-1,500) |
| 5-Bedroom Luxury Villa | Pedregal | MX$136,000-600,000+ ($8,000-35,000+) |
| 2-Bedroom Oceanfront Condo | Medano Beach | MX$35,000-70,000 ($2,100-4,200) |
| 4-Bedroom House | El Tezal | MX$20,000-45,000 ($1,200-2,700) |
| Penthouse (3-Bed) | Marina | MX$80,000-150,000 ($4,800-9,000) |
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.
Who are the main renter profiles in Cabo San Lucas and what are they looking for?
The Cabo San Lucas rental market serves diverse tenant profiles, each with specific preferences and requirements.
US and Canadian tourists represent the largest short-term rental demographic, seeking properties with premium amenities, ocean views, and walkable access to beaches and nightlife. These renters prioritize convenience and are willing to pay premium rates for prime locations and luxury features.
Wedding and event groups form a significant market segment, requiring large villas with 3+ bedrooms, private pools, and group-friendly amenities. These renters often book well in advance and pay premium rates for exclusive use of luxury properties.
Long-term expats and families seek secure neighborhoods with proximity to schools, reliable services, and practical amenities. This demographic values stability over luxury and prefers reasonable pricing with included utilities and maintenance services.
Digital nomads represent a growing segment, requiring reliable high-speed internet, walkable neighborhoods with cafes and coworking spaces, and flexible lease terms that accommodate their location-independent lifestyle.
Seasonal snowbirds from colder climates rent for 3-6 month periods annually, seeking comfortable, well-maintained properties with reasonable utility costs and access to healthcare and services.
What are the current vacancy rates by property type and area, and how do they affect returns?
Vacancy rates in Cabo San Lucas vary significantly between short-term and long-term rental markets, directly impacting investor returns.
Short-term rental occupancy rates range from 46% to 73% during peak season, with premium properties in prime locations achieving the highest occupancy levels. Properties in Medano Beach, Marina, and Pedregal consistently outperform average occupancy rates.
Long-term rental markets maintain lower vacancy rates, typically below 10%, particularly in secure, family-friendly neighborhoods that attract stable tenant demographics. This stability provides more predictable cash flow for investors seeking consistent returns.
Luxury properties experience higher vacancy rates during off-season periods, especially those located outside primary tourism hotspots. These properties may sit vacant for 2-4 months annually, requiring investors to factor seasonal fluctuations into their return calculations.
Properties with competitive pricing, quality amenities, and professional management services achieve significantly lower vacancy rates across all market segments, demonstrating the importance of proper positioning and management in maximizing rental returns.
What's the current rental yield for different property types, and how has it changed over the past 1 and 5 years?
Rental yields in Cabo San Lucas reflect the market's strong performance as a luxury coastal destination, with distinct patterns between short-term and long-term investment strategies.
Short-term rental properties currently achieve gross yields of 6% to 10%, with premium and luxury units in prime locations reaching the higher end of this range. These yields reflect strong tourist demand and the ability to command premium nightly rates during peak seasons.
Long-term rental investments provide more stable gross yields of 4% to 6%, offering consistent cash flow with lower management intensity compared to short-term rentals. These yields remain attractive for investors seeking steady income without the volatility of tourist seasonality.
Over the past five years, yields and property prices have increased 20% to 40% in top neighborhoods, reflecting growing international demand and limited supply of premium properties. This appreciation has benefited existing property owners while making entry more expensive for new investors.
The trend toward sustained premium yields for luxury and prime location properties appears likely to continue, driven by global demand for high-quality vacation and investment properties in established coastal destinations.
It's something we develop in our Mexico property pack.
How do rents, yields, and market conditions here compare with other similar coastal tourist cities, and what's the forecast for the next 1, 5, and 10 years?
Cabo San Lucas maintains its position as Mexico's premier luxury coastal real estate market, commanding higher prices and yields compared to other major beach destinations.
| Destination | Median Price (2025) | Rental Yield |
|---|---|---|
| Cabo San Lucas | $727,000-$792,000 | 6-10% short-term, 4-6% long-term |
| Puerto Vallarta | $399,900 | Lower than Cabo |
| Tulum | $300,000-$400,000 | Competitive for condos |
| Playa del Carmen | $250,000-$350,000 | Lower yields |
| Cancún | $200,000-$300,000 | Lower yields |
The one-year forecast shows continued strong demand for premium and luxury rentals, with high occupancy rates and rising rents expected to persist. International travel recovery and remote work trends support sustained demand for quality rental properties.
Five-year projections indicate continued appreciation with stable to rising yields, with the luxury market segment leading growth. Infrastructure improvements and increased international accessibility should support market expansion.
Ten-year outlook suggests global tourism growth and remote work proliferation will drive up high-end rents and resale values, though some market cooling may occur in entry and mid-range properties as supply increases to meet growing demand.
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.
Cabo San Lucas rental market offers compelling opportunities for both short-term and long-term investors, with premium properties in prime locations delivering the strongest returns.
Understanding total costs including utilities, HOA fees, and maintenance expenses is crucial for accurate investment planning and realistic return expectations in this luxury coastal market.
Sources
- Rentas en Cabo - Cost of Living Guide
- Rentas en Cabo - Property Rental Guide
- Coastal Properties of Cabo - Cost of Living
- AirROI - Cabo San Lucas Market Report
- The LatinVestor - Cabo Property Analysis
- The LatinVestor - Buying Guide
- Alen Fabjan - Luxury Home Ownership Costs
- The LatinVestor - Price Forecasts