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Tegucigalpa's rental market offers some of the most attractive yields in Central America as of September 2025.
With gross rental yields ranging from 7.7% to 10.4% for residential properties, the capital city presents compelling investment opportunities, especially in apartments and central districts. However, high local mortgage rates at 16% and increasing competition from new developments are reshaping the market dynamics for both local and foreign investors.
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Tegucigalpa delivers gross rental yields of 7.7% to 10.4% for residential properties, with apartments in prime areas like Zona Rosa and Los Proceres achieving the highest returns.
Short-term rentals can generate superior yields but require active management, while high mortgage rates of 16% significantly impact leveraged investments.
| Property Type | Average Yield | Best Districts |
|---|---|---|
| 1-2 Bedroom Apartments | 8-10% | Zona Rosa, Los Proceres |
| Houses | 6-8% | Palmira, Las Lomas |
| Commercial Properties | Variable | El Centro |
| Short-term Rentals | Up to 12% | Zona Rosa, El Centro |
| Long-term Rentals | 7-9% | Los Proceres, Palmira |
| Average Purchase Price | $1,200/m² | Condos in Tegucigalpa |
| Typical Ongoing Costs | 2-3% annually | All property types |
What's the current average rental yield in Tegucigalpa?
As of September 2025, Tegucigalpa delivers gross rental yields ranging from 7.7% to 10.4% for residential properties.
Apartments in the capital consistently achieve the higher end of this range, particularly 1-2 bedroom units located in business districts or near universities. The regional benchmark for 1-, 2-, and 3-bedroom apartments in Central American capital cities averages 8.35% yield as of July 2025.
These yields place Tegucigalpa among the most attractive rental markets in Central America. The strong performance stems from consistent demand from young professionals, government workers, multinational staff, and academic visitors who prefer centrally located housing.
However, yields have experienced slight downward pressure due to increased inventory from new residential developments entering the market. This trend represents a shift from yields of 9-12% that were common five years ago before the current construction boom.
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How do rental yields differ between apartments, houses, and commercial properties?
Apartments and condos generate the highest yields in Tegucigalpa, typically achieving 7-10% for well-located properties.
The best-performing apartments are 1-2 bedroom units positioned near business districts, universities, or areas with strong public transportation access. These properties benefit from consistent demand and relatively low maintenance costs compared to their rental income.
Houses deliver slightly lower yields, averaging 6-8% across Tegucigalpa. The lower yield reflects higher maintenance responsibilities, property management complexity, and a smaller pool of potential renters who can afford larger properties.
Commercial properties present a different picture entirely. Small offices in central Tegucigalpa rent for approximately L19,592 per month, while large retail spaces can command over L516,000 monthly. However, commercial yields vary significantly based on location, tenant quality, and property management expertise.
The apartment market remains the most liquid and predictable for investors seeking consistent rental income.
Which neighborhoods or districts in Tegucigalpa offer the highest and lowest yields?
Zona Rosa, El Centro, and Los Proceres consistently deliver the highest rental yields in Tegucigalpa.
Zona Rosa particularly excels due to its concentration of restaurants, nightlife, and business activity, creating strong demand from tourists, business travelers, and young professionals. Properties in this area benefit from both short-term and long-term rental opportunities.
Los Proceres attracts professionals working in government and international organizations, providing stable long-term rental demand. El Centro remains popular for its proximity to business districts and transportation hubs.
Palmira and Las Lomas also perform well, especially for short-term and mid-term corporate rentals. These areas offer modern amenities while maintaining reasonable property acquisition costs.
Outlying and older neighborhoods typically generate lower yields due to reduced demand and increased competition from newer developments. Areas lacking modern infrastructure or reliable public transportation see diminished rental appeal among target demographics.
How does the size or surface area of a property affect the rental yield?
Smaller apartments consistently outperform larger properties in terms of rental yield per square meter in Tegucigalpa.
1-2 bedroom apartments generate superior relative returns because they target the largest segment of the rental market: young professionals, students, expatriate workers, and small families. These units typically rent more quickly and maintain higher occupancy rates.
Larger houses face challenges in the Tegucigalpa market because fewer renters can afford the higher monthly costs, and maintenance expenses increase proportionally. The pool of potential tenants for 4+ bedroom properties remains limited to wealthy families and large corporate rentals.
The optimal size appears to be 60-85 square meter apartments, which balance rental income potential with acquisition costs. These properties align with local income levels while providing sufficient space for the target demographic.
Properties exceeding 150 square meters often experience extended vacancy periods and may require significant rent reductions to attract tenants, ultimately reducing overall yield performance.
What's the average purchase price of properties, including all fees and taxes?
The average condo price in Tegucigalpa reaches $1,200 per square meter as of June 2025.
For context, the national average shows apartments at $2,170 per square meter and houses at $1,264 per square meter. Tegucigalpa's condo prices remain below the national apartment average, reflecting the capital's competitive pricing relative to other major urban centers.
Additional fees and taxes typically add 4-6% to the purchase price. These costs include legal fees, notary services, registration fees, and transfer taxes. The exact percentage varies depending on the broker, municipality, and property value.
Foreign buyers should budget for potential additional costs such as legal representation specializing in international transactions and currency exchange fees if financing originates outside Honduras.
Properties in prime districts like Zona Rosa command premiums of 15-25% above the city average, while developing areas offer discounts of 10-20% from the baseline pricing.
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What are the typical ongoing expenses such as maintenance, insurance, and property management?
Property owners in Tegucigalpa should budget 2-3% of the property value annually for ongoing expenses.
Maintenance costs typically represent 1-2% of the property value per year, covering regular upkeep, repairs, and necessary renovations. Tropical climate conditions require particular attention to humidity control, exterior maintenance, and HVAC systems.
Property insurance ranges from $200-$500 annually for typical residential units, depending on coverage level, property value, and location. Properties in higher-risk areas or luxury developments may face higher premiums.
Professional property management services charge 8-12% of gross annual rental income. This service becomes essential for foreign investors or those managing multiple properties, as it includes tenant screening, rent collection, maintenance coordination, and legal compliance.
Homeowners association (HOA) fees for apartments vary from $50-$200 monthly for higher-end developments. These fees cover common area maintenance, security, and shared amenities like pools or fitness centers.
How do mortgage costs and interest rates impact the net rental yield?
Local mortgage interest rates in Honduras average 16% annually as of 2024, creating significant challenges for leveraged real estate investments.
These high interest rates substantially erode net rental yields for financed properties. An investor borrowing at 16% would need gross rental yields exceeding 18-20% to achieve positive cash flow after considering principal payments, taxes, and operating expenses.
The mathematics strongly favor cash purchases in the current interest rate environment. Investors using leverage typically see net yields drop to 2-4%, compared to 5-7% net yields for cash purchases after all expenses.
Foreign investors often explore financing options in their home countries if available, potentially accessing significantly lower interest rates. However, currency exchange risk and international lending complications must be carefully evaluated.
The high cost of local financing makes Tegucigalpa particularly attractive for investors with available cash, as they can capture the full benefit of the market's gross yields.
What are the average rents for short-term versus long-term rentals, and how do their yields compare?
Short-term rentals in Tegucigalpa generate median monthly revenue of $455 through platforms like Airbnb.
The average daily rate for short-term rentals reaches $54, with successful properties achieving occupancy rates around 40%. Peak-performing properties in prime locations can exceed 42% occupancy, while average properties typically see 29-31% occupancy rates.
Long-term rentals present a different value proposition. An 85-square-meter furnished apartment in an expensive area commands approximately L25,048 monthly (roughly $1,018). Standard city averages range from L10,000-L18,000 monthly ($400-$730).
Short-term rentals can achieve yields exceeding 12% in optimal conditions but require intensive management, marketing, and guest services. They also face seasonal fluctuations and regulatory uncertainties.
Long-term rentals typically yield 7-9% with significantly less management burden and more predictable cash flow. The choice between strategies depends on investor preferences for involvement level and risk tolerance.
What are the current vacancy rates in different areas and property types?
Vacancy rates in Tegucigalpa are rising due to increased inventory from new residential developments entering the market.
Short-term rental properties show median occupancy of 31%, with peak performance reaching 42% for well-managed properties in prime locations. The variation reflects the importance of location, property quality, and management effectiveness in the short-term rental sector.
Long-term rental vacancy rates have increased as competition intensifies, particularly affecting new and luxury developments. Properties in established neighborhoods with strong transportation links maintain lower vacancy rates than peripheral developments.
Apartments in business districts experience lower vacancy than residential-only areas, as proximity to employment centers creates consistent demand. Properties near universities benefit from academic calendar-driven rental cycles.
The increasing supply suggests investors should focus on differentiated properties or prime locations to maintain occupancy rates and rental pricing power.
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What profiles of renters are most common in Tegucigalpa today?
Young professionals represent the largest segment of renters in Tegucigalpa's rental market.
Government employees and multinational corporation staff form a significant portion of the tenant base, attracted to properties offering modern amenities and convenient locations. These renters typically seek 1-2 bedroom apartments with reliable internet, air conditioning, and proximity to business districts.
Academic visitors and students create another important rental segment, particularly near educational institutions. This group often accepts shared accommodations or smaller units in exchange for affordable rent and good transportation access.
Expatriate workers represent a smaller but valuable segment, often willing to pay premium rents for furnished properties with international-standard amenities. These tenants frequently seek short-term to medium-term lease arrangements.
Tourist and business travelers contribute to the short-term rental market, preferring properties in Zona Rosa and El Centro with easy access to restaurants, entertainment, and business facilities.
How have rents and yields changed compared to 5 years ago and compared to last year, and what are the forecasts for 1, 5, and 10 years?
Rental yields in Tegucigalpa have decreased from 9-12% five years ago to the current 7.7-10.4% range.
This decline reflects the residential construction boom that increased property supply faster than demand growth. Despite the yield compression, Tegucigalpa remains attractive compared to regional markets and global standards.
Compared to last year, yields have experienced slight additional decreases due to continued inventory additions and increased competition among landlords. However, the decline rate has moderated as the market adapts to new supply levels.
One-year forecast suggests yields will continue declining slightly as additional developments complete construction and enter the rental market. Investors should expect yields to stabilize around 7-9% as competition intensifies.
Five-year projections indicate yield stabilization around 6-8% as construction activity slows and population growth catches up with housing supply. This period should see market maturation and more professional property management practices.
Ten-year forecasts depend on macroeconomic trends and urban development patterns. If Tegucigalpa continues developing as a regional business center, yields should remain competitive with Central American markets as supply-demand dynamics balance.
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How do Tegucigalpa's rental yields compare with other major cities in the region, and what are the smartest property choices to make right now?
Tegucigalpa's rental yields rank among the highest in Honduras, though slightly behind the tourism-driven returns in Roatán.
Compared to other regional cities like San Pedro Sula, La Ceiba, and Comayagua, Tegucigalpa maintains competitive or slightly superior yields. The capital's diversified economy and government employment base provide more stable rental demand than cities dependent on single industries.
Within Central America, Tegucigalpa's yields compare favorably to more developed markets while offering greater potential for capital appreciation as the market matures.
The smartest property choices for 2025 include smaller centrally located condos targeting professionals, students, and short-term corporate guests. Properties in high-demand districts like Zona Rosa, Los Proceres, and Palmira offer the best combination of yield and appreciation potential.
Well-managed short-term rental properties present opportunities for peak yield performance, though they require more intensive management and market knowledge. Investors should focus on properties that can serve both short-term and long-term rental markets for maximum flexibility.
Avoiding overleveraged investments remains crucial given the 16% local mortgage rates, making cash purchases the preferred strategy for maximizing net returns.
It's something we develop in our Honduras 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.
Tegucigalpa's rental market offers compelling yields of 7.7-10.4% for residential properties, making it one of Central America's most attractive investment destinations as of September 2025.
Success in this market requires focusing on smaller apartments in prime districts, avoiding high-cost local financing, and carefully managing the increasing competition from new developments entering the market.
Sources
- Honduras Price Forecasts
- Honduras Real Estate Market
- Global Property Guide - Rental Yields
- Fazwaz Commercial Real Estate Honduras
- Fazwaz Tegucigalpa Commercial
- AirROI Tegucigalpa Report
- Expatistan Tegucigalpa Cost of Living
- Trading Economics Honduras Interest Rates
- Honduras Real Estate Forecasts
- Global Property Guide Honduras Yields