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As of September 2025, Peru's rental property market offers some of the most attractive yields in Latin America. Rental yields in Peru currently average 5.97% nationally, with Lima leading at 6.45% for apartments, making it a compelling destination for property investors seeking both income and capital appreciation potential.
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Peru's rental yields average 5.97% nationally as of Q2 2025, with Lima apartments yielding 6.45% and student housing reaching 8.5%.
Net yields after all costs typically range from 4.5-5.5% for standard apartments, with financing reducing returns by 1.5-2.5%.
| Property Type | Gross Yield (%) | Net Yield (%) |
|---|---|---|
| 2BR Apartment | 6.5-7.5 | 4.5-5.5 |
| Student Housing | 7.5-8.5 | 5.5-6.5 |
| Commercial Space | 8.2-9.0 | 6.0-7.5 |
| Short-term Rental | 8-10 | 5-7 |
| Luxury Apartment | 4.5-5.5 | 3.5-4.5 |
| Studio Apartment | 7.0-8.0 | 5.0-6.0 |
| Mixed-use Property | 7.0-8.0 | 5.5-6.5 |
What are the current rental yields across Peru?
Peru's national average gross rental yield stands at 5.97% as of Q2 2025, representing a slight decline from 6.13% in Q4 2024.
Lima leads the country with apartment yields averaging 6.45%, significantly higher than most other Latin American capital cities. Within Lima, specific districts show even stronger performance: Surquillo reaches up to 7.5%, Barranco yields 6.32%, and Chorrillos delivers 6.18%.
Specialized property types offer exceptional returns, with student housing achieving 7.5-8.5% yields due to high demand and lower entry prices ranging from $50,000-$80,000. Mixed-use properties also perform well at 7-8% yields.
Arequipa, Peru's second-largest city, shows more modest yields at 5.5%, while smaller cities and rural areas typically range from 4-6% depending on local economic conditions and rental demand.
It's something we develop in our Peru property pack.
How do yields vary between major cities and regions?
Lima consistently outperforms other Peruvian cities with the highest rental yields, driven by strong employment growth and foreign investment.
The capital's premium districts like Miraflores (5.2%-6.8%) and San Isidro (5.6%) offer stable returns with lower vacancy rates, while emerging neighborhoods like Surquillo provide higher yields at 7.5% but with slightly more risk.
Arequipa, Peru's economic hub outside Lima, delivers moderate yields at 5.5% with strong industrial and commercial activity supporting rental demand. Cusco benefits from tourism-driven short-term rental markets but shows more seasonal variation.
Coastal cities like Trujillo and Piura typically yield 4.5-5.5%, while smaller inland cities often struggle to exceed 4-5% due to limited economic diversification and lower rental demand.
Regional differences reflect local economic strength, with mining regions showing cyclical patterns tied to commodity prices and tourist destinations offering higher short-term rental potential but greater volatility.
What yields can you expect by property type?
| Property Type | Gross Yield Range (%) | Key Characteristics |
|---|---|---|
| Standard 2BR Apartment | 6.5-7.5 | Most liquid, stable demand |
| Studio Apartment | 7.0-8.0 | High demand, lower entry cost |
| Student Housing | 7.5-8.5 | Specialized market, premium pricing |
| Commercial Space | 8.2-9.0 | Higher yields, business risk |
| Mixed-use Property | 7.0-8.0 | Diversified income streams |
| Luxury Apartment | 4.5-5.5 | Lower yields, capital appreciation |
| Single-family House | 5.5-6.5 | Family market, maintenance intensive |
How does property size affect rental yields?
Smaller properties consistently deliver higher rental yields per square meter in Peru's market.
Studios and one-bedroom apartments typically yield 7-8% gross, as they command premium rents relative to their purchase price and appeal to young professionals and students willing to pay for convenient locations.
Two-bedroom apartments, the market sweet spot, yield 6.5-7.5% with strong liquidity and broad tenant appeal from couples to small families. These properties balance yield with marketability.
Larger three-bedroom units and houses generally yield 5.5-6.5%, as their higher purchase prices aren't fully offset by proportionally higher rents, and they target a smaller pool of family tenants.
Luxury properties above 150 square meters often yield just 4.5-5.5%, focusing more on capital appreciation than rental income, though they offer greater stability and prestigious locations.
What are typical purchase prices including all costs?
Property purchase costs in Lima range from $80,000 for basic studios to over $300,000 for luxury apartments, with significant additional fees.
Transaction costs add 3-5% to the purchase price, including notary fees (0.3% of value), registration fees (0.8%), legal fees (1-2%), and title insurance (0.5%). Real estate agent commissions typically cost 3-5%.
Transfer taxes apply at 3% of the transaction value for properties under certain thresholds, while higher-value properties may face additional municipal taxes. Foreign buyers should budget an extra 1-2% for specialized legal assistance.
Financing costs for mortgages include origination fees (1-2%), appraisal costs ($300-500), and insurance requirements. Foreign buyers typically need 20-30% down payments with rates of 6.95%-8.3%.
Additional setup costs include utility deposits, property management setup fees, and initial marketing costs for rental properties, totaling approximately $1,000-3,000 depending on property value and location.
What ongoing costs should you expect?
Annual property operating costs in Peru typically consume 2-4% of the property value, significantly impacting net yields.
Property taxes range from 0.2-1% annually based on municipal valuations, with Lima's premium districts charging toward the higher end. Tax exemptions may apply for first-time buyers or new developments.
Maintenance and common area fees in apartment buildings cost $30-100 monthly depending on amenities, location, and building quality. These fees cover security, cleaning, utilities for common areas, and building maintenance reserves.
Professional property management services charge 8-10% of rental income for full-service management, including tenant screening, rent collection, maintenance coordination, and legal compliance. Self-management can reduce costs but requires local knowledge and time investment.
Insurance, municipal fees, and miscellaneous costs add another 0.1-0.3% annually, while vacancy provisions and marketing costs should be factored at 5-10% of gross rental income for prudent financial planning.
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How does mortgage financing affect yields?
Mortgage financing in Peru typically reduces effective net yields by 1.5-2.5 percentage points due to interest costs and associated fees.
Foreign buyers face interest rates of 6.95%-8.3% with mandatory 20-30% down payments, compared to locals who may secure rates as low as 5.5% with better terms. These higher rates significantly impact cash-on-cash returns.
Additional financing costs include loan origination fees (1-2%), mandatory insurance premiums, and ongoing bank service charges that further erode returns. Currency risk also affects foreign borrowers if income comes from other currencies.
Leveraged properties in Lima generating 6.5% gross yields typically deliver 4-5% net cash-on-cash returns after financing costs, taxes, and management fees. Cash buyers enjoy 1.5-2% higher effective yields by avoiding interest payments.
Strategic financing can still make sense for portfolio diversification or if leverage enables purchasing higher-quality properties in prime locations with better long-term appreciation potential.
Short-term vs long-term rental yield differences?
Short-term rentals in Peru can achieve 8-10% annualized gross yields but require significantly more management and face higher vacancy rates.
Airbnb properties in Lima's Miraflores and Barranco districts show occupancy rates of 60-65% with average daily rates around $47, but management fees consume 15-20% of revenue compared to 8-10% for long-term rentals.
Long-term rentals deliver more predictable yields of 5.5-7.0% with occupancy rates exceeding 90% and simpler management requirements. These properties appeal to local professionals, expatriate families, and students seeking stability.
Regulatory considerations favor long-term rentals, as short-term rental regulations continue evolving and may impact profitability. Municipal licensing requirements and tax compliance add complexity to Airbnb operations.
Net yields after all costs often converge, with short-term rentals yielding 5-7% net versus 4.5-5.5% for long-term rentals, but short-term properties require active management and bear higher operational risks.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Peru 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 typical vacancy rates and their impact?
Long-term rental vacancy rates in Lima typically range from 5-8%, while emerging areas may experience 10-15% vacancy during market adjustments.
Premium districts like Miraflores and San Isidro maintain lower vacancy rates due to strong demand from professionals and expatriates, while secondary neighborhoods show higher volatility based on local economic conditions.
Short-term rentals face much higher vacancy rates of 35-50% (equivalent to 50-65% occupancy), requiring higher daily rates to compensate for lost revenue during vacant periods.
Seasonal variations affect both rental types, with tourist areas showing stronger short-term demand during peak seasons (June-August, December-January) while long-term markets remain relatively stable year-round.
Each 5% increase in vacancy rates reduces effective yields by approximately 0.3-0.5 percentage points, making location selection and property management crucial for maintaining target returns.
Who are the main tenant profiles and their stability?
Peru's rental market attracts diverse tenant profiles with varying stability and rental capacity.
- Local professionals: Middle to upper-middle class Peruvians working in finance, technology, and multinational companies, offering high stability and premium rent potential
- University students: Particularly near major universities in Lima and Arequipa, providing consistent demand but requiring specialized property management and shorter lease terms
- Expatriate families: Foreign professionals working for international companies or NGOs, typically seeking long-term leases and willing to pay premium rents for quality properties
- Digital nomads: Growing segment seeking flexible medium-term rentals (3-12 months) in well-connected neighborhoods with modern amenities
- Corporate tenants: Companies leasing properties for employee housing, offering the highest stability but requiring properties that meet corporate standards
It's something we develop in our Peru property pack.
Gross vs net yields: what are the smartest property choices?
Net yields in Peru typically run 2-3 percentage points below gross yields after accounting for all operating costs, taxes, and management fees.
Two-bedroom apartments near universities and business centers represent the optimal balance, delivering 6.5-7.5% gross yields that translate to 4.5-5.5% net returns with strong liquidity and broad tenant appeal.
Student housing properties offer exceptional risk-adjusted returns at 7.5-8.5% gross (5.5-6.5% net) due to specialized demand and premium pricing, though they require understanding of academic calendar cycles.
Commercial and mixed-use properties provide higher gross yields (8.2-9.0%) but involve greater complexity and business risk, making them suitable for experienced investors with local market knowledge.
The smartest choices for 2025 focus on properties under $150,000 in established neighborhoods with strong rental demand, transportation links, and potential for moderate capital appreciation alongside solid rental income.
How have yields changed over time and what's the forecast?
Peruvian rental yields have declined gradually since 2019, falling from 7-8% gross yields to the current 5.97% national average as property prices have risen faster than rents.
Over the past five years, property values in Lima have increased at 3-7% annually while rental growth has remained modest at 2-5% per year, compressing yield margins for investors who bought at peak prices.
The past year has shown stabilization, with yields declining only slightly from 6.13% in Q4 2024 to 5.97% in Q2 2025, suggesting the market may be finding equilibrium between price growth and rental increases.
Short-term forecasts (1-2 years) predict yield stabilization around current levels as new supply is absorbed and infrastructure investments improve rental demand in previously underserved areas.
Medium-term projections (5-10 years) suggest Peru will maintain its position as a high-yield Latin American market, with gross yields potentially stabilizing at 5.5-6.5% nationally as the market matures but benefits from continued economic growth and urbanization trends.
It's something we develop in our Peru property pack.
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.
Peru's rental property market offers compelling yields compared to other Latin American destinations, with Lima leading at 6.45% average returns for apartments.
Smart investors focusing on 2-bedroom apartments near universities and business centers, student housing, and mixed-use properties can achieve net yields of 4.5-6.5% while building long-term wealth in one of the region's most promising markets.
Sources
- Global Property Guide - Peru Rental Yields
- The LatinVestor - Peru Real Estate Market
- The LatinVestor - Peru Buy Property
- Global Property Guide - Peru Price History
- Numbeo - Latin America Property Investment Rankings
- The LatinVestor - Peru Price Forecasts
- The LatinVestor - Lima Rental Yields Apartments
- Global Property Guide - Peru Taxes and Costs
- The LatinVestor - Lima Property
- Airbtics - Miraflores Airbnb Revenue