Authored by the expert who managed and guided the team behind the Mexico Property Pack
Everything you need to know before buying real estate is included in our Mexico Property Pack
Rental yields in Mérida range from 8% to 15% annually, significantly outperforming most major Mexican cities.
Short-term rentals in Centro Histórico can deliver yields up to 15%, while long-term rentals in prime neighborhoods typically generate 8-10% gross returns. Property prices have increased 14-15% in the past year, yet rental demand has kept pace, maintaining attractive yield levels for investors.
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.
Mérida offers exceptional rental yields ranging from 8-15% annually, with short-term rentals commanding higher returns than long-term leases.
Centro Histórico leads with yields up to 15% for tourist rentals, while residential neighborhoods like García Ginerés deliver stable 8-10% returns.
| Property Type | Typical Yield (%) | Price Range (USD) | Monthly Rent (USD) | Best Strategy |
|---|---|---|---|---|
| Centro Histórico Apartment | 9-14% | $150,000-$2,000,000 | $1,000-$3,500 | Short-term rental |
| North Suburbs House | 8-10% | $180,000-$600,000 | $900-$1,800 | Long-term rental |
| Modern Condo | 8-10% | $120,000-$350,000 | $800-$1,500 | Digital nomads |
| Colonial Home | 8-11% | $200,000-$2,000,000 | $1,200-$4,000 | Airbnb premium |
| Luxury Villa | 7-9% | $500,000-$3,500,000 | $2,000-$5,000 | High-end long-term |
What are the average rental yields across the main neighborhoods in Mérida?
Rental yields in Mérida vary significantly by neighborhood, with Centro Histórico leading at 9-14% annually for tourist-focused properties.
The historic center commands premium yields due to high demand from tourists and expats seeking authentic colonial experiences. Short-term rentals in this area can achieve gross yields of 12-15%, particularly for well-restored colonial properties near major attractions.
García Ginerés and Montebello deliver solid 8-10% yields with strong long-term rental demand from professionals and expatriate families. The north corridor, including Temozón Norte and Cholul, offers similar returns with modern properties attracting quality tenants willing to pay premium rents.
Up-and-coming neighborhoods like Chuburná and La Floresta present opportunities for higher yields due to lower entry costs, often exceeding 10% for investors who identify properties before gentrification accelerates.
It's something we develop in our Mexico property pack.
How do yields vary depending on the type of property, like houses, condos, or apartments?
Property type significantly influences rental yields in Mérida, with houses typically generating 8-12% returns depending on location and condition.
Modern condos and apartments consistently deliver 8-10% yields due to their appeal to young professionals, digital nomads, and expatriates seeking low-maintenance living. These properties rent quickly and maintain high occupancy rates year-round.
Colonial homes in Centro Histórico can achieve 8-11% yields, with the upper range reserved for properties offering authentic charm combined with modern amenities. These properties command premium rents from tourists and short-term rental guests.
Luxury homes and villas typically generate lower percentage yields of 7-9% but offer higher absolute returns and better long-term appreciation potential. The trade-off between yield and capital growth becomes evident in this segment.
Single-family houses remain most popular for long-term family rentals, providing stable cash flow with minimal vacancy periods throughout the year.
What's the typical price range of properties, including fees, and how does that affect yields?
Property prices in Mérida span from $67,000 for starter homes to $3.5 million for luxury estates, with closing costs adding 5-10% to purchase prices.
| Property Category | Price Range (USD) | Closing Costs | Typical Yield Impact |
|---|---|---|---|
| Starter Properties | $67,000-$150,000 | 8-10% | Higher yields, lower entry |
| Mid-Range Homes | $150,000-$300,000 | 6-8% | Optimal yield-risk balance |
| Modern Condos | $120,000-$350,000 | 5-7% | Consistent rental demand |
| Colonial Properties | $200,000-$2,000,000 | 7-10% | Premium rental potential |
| Luxury Estates | $500,000-$3,500,000 | 5-8% | Lower yields, higher appreciation |
Closing costs include notary fees, registration taxes, legal representation, and transfer duties. Buyers should budget $8,000-$25,000 for these expenses depending on property value, which directly impacts the effective purchase price and initial yield calculations.
Lower-priced properties often deliver higher percentage yields but may require more hands-on management and maintenance. Mid-range properties typically offer the best balance of yield, appreciation potential, and management ease.
How do yields compare when looking at different property sizes and surfaces?
Smaller properties generally generate higher yields per square meter, with 1-2 bedroom units commanding premium rents relative to their purchase price.
Compact condos and apartments attract digital nomads, young professionals, and couples who prioritize location and amenities over space. These tenants typically pay higher per-square-meter rents, boosting yield calculations significantly.
Mid-size properties of 80-120 square meters offer optimal rental appeal for expatriate families and Mexican professionals, balancing yield with steady demand. These properties maintain consistent occupancy with less turnover than smaller units.
Large homes and villas generate lower yields per square meter but attract premium tenants willing to pay substantial monthly rents. Family rentals in this category often sign longer leases, reducing vacancy and turnover costs.
Properties with outdoor space, pools, or gardens command rent premiums that can offset their larger size, particularly in Mérida's warm climate where outdoor living is highly valued year-round.
Don't lose money on your property in Mérida
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 are the typical expenses and taxes that landlords face in Mérida?
Property taxes in Mérida are exceptionally low at approximately 0.19% of cadastral value, often under $500 USD annually for mid-range properties.
Income tax on rental income ranges from 1.92% to 35% based on net income, with foreign landlords required to register and file monthly tax returns with Mexican authorities. Most rental income falls into lower tax brackets when properly structured.
Short-term rentals face 16% VAT obligations, though this cost is typically passed to guests. Landlords must register for VAT compliance and file monthly returns if operating Airbnb or similar platforms.
Typical ongoing expenses include HOA fees ($50-$200 monthly), property management (8-15% for short-term, 5-10% for long-term), insurance, maintenance, and repairs. These costs are generally tax-deductible against rental income.
Professional property management becomes essential for foreign investors, adding 8-15% to operating costs but ensuring compliance, tenant relations, and property maintenance while maximizing occupancy rates.
How does financing with a mortgage impact the net yield compared to cash purchases?
Mortgage financing reduces net yields by the annual interest expense minus available tax deductions, making cash purchases more attractive in Mexico's current interest rate environment.
Mexican mortgage rates typically exceed rental yields, creating negative leverage scenarios where borrowing costs exceed property income. This dynamic favors cash buyers who capture full gross yields minus operating expenses only.
Foreign buyers often choose cash purchases due to limited mortgage availability and high peso-denominated interest rates. USD financing options exist but require significant down payments and carry currency risk considerations.
Cash purchases eliminate monthly debt service, maximizing monthly cash flow and providing flexibility during market downturns or vacancy periods. This approach also accelerates equity building through rent collection and property appreciation.
Leveraged purchases may make sense for investors seeking to diversify across multiple properties or those confident in continued property appreciation exceeding borrowing costs over time.
What are the average rents for short-term versus long-term rentals, and how do their yields compare?
Long-term rentals in Mérida generate $500-$1,500 monthly for typical 8-9% yields, while short-term rentals command $1,500-$4,000 monthly for 8-15% gross returns.
| Rental Strategy | Monthly Income Range | Typical Yield | Occupancy Rate | Management Intensity |
|---|---|---|---|---|
| Long-term Lease | $500-$1,500 | 8-9% | 95%+ | Low |
| Short-term Rental | $1,500-$4,000 | 8-15% | 43-60% | High |
| Corporate Rental | $1,200-$2,500 | 9-11% | 85%+ | Medium |
| Expat Family | $800-$2,200 | 8-10% | 90%+ | Low |
Short-term rentals offer higher gross yields but require active management, professional cleaning, and marketing expertise. Peak tourist seasons boost rates significantly, while summer months see reduced demand.
Long-term rentals provide stable, predictable income with minimal management requirements. Vacancy rates rarely exceed 5% in prime neighborhoods, making cash flow highly reliable for planning purposes.
It's something we develop in our Mexico property pack.
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.
What are the vacancy rates like, and how do they differ by property type and location?
Vacancy rates in Mérida remain exceptionally low for long-term rentals, with prime neighborhoods achieving up to 95% occupancy rates year-round.
Short-term rental occupancy averages 43% according to AirDNA data, though well-managed properties in Centro Histórico often exceed 60% occupancy with proper pricing and marketing strategies.
Modern condos and apartments experience minimal vacancy due to strong demand from digital nomads, young professionals, and expatriate workers. These properties typically rent within 2-4 weeks of listing.
Luxury properties and villas may experience slightly higher vacancy rates of 10-15% due to their smaller target market, but they compensate with significantly higher monthly rents when occupied.
Location proves critical for vacancy management, with properties near business districts, universities, and expatriate communities maintaining consistently high occupancy throughout economic cycles.
Who are the main renter profiles in Mérida, and how does demand differ between them?
Expatriates and digital nomads represent the highest-demand rental segment, seeking modern properties with reliable internet, air conditioning, and security features.
1. **Digital Nomads and Remote Workers**: Prefer furnished condos with co-working spaces nearby, willing to pay premiums for reliable WiFi and modern amenities2. **American and Canadian Retirees**: Seek ground-floor properties with low maintenance requirements and proximity to healthcare facilities3. **Mexican Professionals**: Demand secure properties with parking, air conditioning, and access to business districts4. **Tourist and Short-term Visitors**: Priority on location near attractions, authentic colonial charm, and full property management services5. **Corporate Relocations**: Require furnished properties with flexible lease terms and proximity to business centersThe growing Mexican middle class creates steady demand for quality rental properties, while increasing foreign investment and relocation to Mérida expands the expatriate renter base significantly.
Each segment has distinct preferences and payment capabilities, allowing savvy investors to target properties specifically to maximize rental income and minimize vacancy periods.
What are some example rental yields for different types of properties right now?
A 2-bedroom Centro apartment purchased for $150,000 generating $1,200 monthly rent delivers 9.6% gross yield as of September 2025.
Modern 3-bedroom houses in Montebello costing $250,000 with $1,800 monthly rental income achieve 8.6% gross returns, representing stable family rental market performance.
Historic colonial properties purchased for $500,000 can generate $3,500 monthly through short-term rentals, yielding 8.4% gross returns with potential for higher occupancy optimization.
Luxury condos in García Ginerés priced at $300,000 commanding $2,000 monthly rent deliver 8.0% yields while attracting premium expatriate tenants seeking high-end amenities.
Entry-level properties in emerging neighborhoods like Chuburná, purchased for $80,000 and renting for $700 monthly, can achieve yields exceeding 10% for investors comfortable with modest appreciation expectations.
How have rental prices and yields changed compared to one year ago and five years ago?
Property prices in Mérida increased 14-15% over the past year, yet rental yields remained stable as rental demand kept pace with property value appreciation.
Over five years, property prices nearly doubled in premium zones like Centro Histórico and García Ginerés, while rental yields maintained their 8-15% range through consistent demand growth.
Mérida continues outperforming Mexico's national average rental yields of 6-8%, with the city's 8-15% returns reflecting its growing status as a prime investment destination.
Tight housing supply has created landlord-friendly conditions, enabling rent increases that preserve yield levels despite significant property appreciation in recent years.
It's something we develop in our Mexico property pack.
What are the forecasts for rental yields in Mérida over the next one, five, and ten years, and how do they compare with similar cities?
Rental yields in Mérida are expected to remain stable to slightly rising over the next year, supported by continued population growth and foreign investment inflows.
Five to ten-year projections indicate annual price growth of approximately 10% through 2027, with potential yield compression as property values appreciate faster than rental rates can increase.
Compared to similar cities, Mérida's 8-15% yields significantly exceed most Mexican markets and Latin American destinations, where 6-8% yields represent typical performance levels.
Long-term demographic trends support sustained rental demand, including Mexico City migration, North American retiree inflows, and digital nomad population growth choosing Mérida as a base.
Conservative projections suggest yields stabilizing around 7-12% by 2030-2035 as the market matures, still outperforming most international real estate investment destinations significantly.
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.
Mérida's rental market offers exceptional opportunities for both income generation and capital appreciation.
Success requires careful neighborhood selection, proper tax planning, and professional property management to maximize returns while minimizing risks.
Sources
- The LatinVestor - Mérida Property Market Analysis
- AirROI - Mérida Short-term Rental Data
- The LatinVestor - Mérida Price Forecasts
- Properstar - Mérida House Prices
- Plalla - Mexico Property Tax Calculator
- The LatinVestor - Mexico Property Taxes Guide
- MexTax - Property Leasing Tax Obligations
- MexTax - Mexican Property Owner Tax Guide
- The LatinVestor - Mérida Real Estate Forecasts
- Global Property Guide - Mexico Rental Yields