Buying condos in Mexico: worth it in 2025?

Last updated on June 12, 2025

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

Mexico's real estate market continues to attract international buyers in mid-2025, driven by strong tourism numbers, rising property values, and attractive rental yields.

Whether you're looking for a vacation home, rental investment, or retirement property, understanding the current market dynamics is crucial for making an informed decision.

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.

Quick Summary:

As of June 2025, Mexico's condo market offers diverse opportunities across multiple cities, with Tulum leading rental yields at 8-15% while Mexico City provides stability with 5.74% average returns.

Foreign buyers can legally own Mexican condos through a fideicomiso (bank trust) system, with total ownership costs remaining relatively low compared to North American markets.

Metric	Details
Average Condo Prices (2BR)	Mexico City: $125,000-$250,000 Playa del Carmen: $180,000-$350,000 Tulum: $200,000-$400,000 Puerto Vallarta: $466,000-$925,000
Price Growth (2024)	National average: 9.7% Mexico City: 8.1% Tourist areas: 10-15%
Rental Yields	Mexico City: 5.74% average Playa del Carmen: 5-6% Tulum: 8-15% Puerto Vallarta: 5-6%
Top Investment Cities	Tulum, Playa del Carmen, Puerto Vallarta, Mexico City, Cancún
Monthly Rental Income (2BR)	Mexico City: $953 Playa del Carmen: $800-$1,200 Tulum: $1,000-$1,500 (long-term) Puerto Vallarta: $1,551 (Airbnb median)
Foreign Ownership Method	Fideicomiso (bank trust) for coastal/border properties
Annual Carrying Costs	Property tax: <0.1% of value Trust fees: $500-$700 HOA: $200-$1,500/month
5-Year Appreciation	30-50% in top markets
2025-2030 Forecast	3-7% annual appreciation expected

Who is the author of this content?

THELATINVESTOR

A team specialized in real estate investing in Latin American countries (Mexico, Brazil, Colombia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Mexico. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At TheLatInvestor, we explore the Mexican real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Mexico City, Playa del Carmen, and Tulum. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What are current condo prices in Mexico's hottest spots and how have they changed since 2020?

As of June 2025, condo prices vary significantly across Mexico's most popular destinations.

Mexico City leads with an average price of 50,116 pesos ($2,473) per square meter. New developments command 60,839 pesos ($3,003) per square meter, while resale properties average 44,396 pesos ($2,191) per square meter. The Mexico City residential market has seen consistent 8.1% year-over-year growth.

Playa del Carmen offers 2-bedroom condos ranging from $180,000 to $350,000, depending on proximity to the beach and amenities. The Playa del Carmen condo market has experienced steady appreciation driven by its popularity with digital nomads and expats. Tulum commands premium prices, with 2-bedroom condos in desirable areas like Aldea Zama or Region 15 ranging from $200,000 to $400,000. The Tulum real estate market has seen some of the strongest growth, with annual increases often exceeding 10-15%.

Puerto Vallarta sits at the luxury end, with 2-bedroom condos in prime neighborhoods ranging from $466,000 to $925,000. The Puerto Vallarta condo market benefits from established infrastructure and a mature expat community.

Over the past five years, prices in these markets have increased by 30-50%, with tourist destinations like Tulum and Playa del Carmen seeing the highest appreciation rates due to surging tourism and foreign investment.

How much can you realistically earn from renting out a condo in different Mexican cities?

Rental income potential varies dramatically between cities and rental strategies.

In Mexico City, you can expect an average of $953 monthly for a 2-bedroom condo, with higher rates in luxury or central areas. The city offers year-round demand with 14.4% rent growth recorded in 2024. Playa del Carmen generates $800-$1,200 monthly for long-term rentals, while short-term rentals average $100-150 per night with strong year-round occupancy.

It's something we develop in our Mexico property pack.

City	Long-Term Monthly Rent (2BR)	Short-Term Potential	Peak Season Notes
Mexico City	$953 average	Higher in luxury/central areas	Year-round demand, 14.4% rent growth in 2024
Playa del Carmen	$800-$1,200	$100-150/night average	Strong year-round occupancy
Tulum	$1,000-$1,500	$1,800-$3,900/month $245/night average	51% median occupancy rate
Puerto Vallarta	$1,551 Airbnb median	$4,094/month peak season Top 10% earn $6,141+	Highly seasonal, $130/night median

The Mexico City rental market offers stability with consistent year-round demand, while coastal markets like Tulum and Puerto Vallarta can generate higher returns but with more seasonality. Tulum's vacation rental market particularly shines, with luxury properties earning up to $3,900 monthly.

What rental yields can you expect from Mexican condos?

Gross rental yields in Mexico significantly outperform many North American markets.

Tulum leads with 8-15% yields, making it the highest-yielding market, especially for luxury villas and studios. Mexico City averages 5.74% overall, with 1-bedroom units achieving 6.9-7.7%, 2-bedroom units 5.1-6.5%, and 3-bedroom units 5.3-6.6%. Playa del Carmen offers consistent 5-6% yields across property types, while Puerto Vallarta delivers 5-6% with seasonal variations.

Studios and 1-bedroom units typically yield 1-2% higher than larger units due to lower entry prices and strong demand. Beachfront properties command premium rents but have higher purchase prices, potentially moderating yields. New builds with modern amenities attract digital nomads and achieve better yields, while luxury villas in Tulum can achieve the top 15% yields due to high nightly rates.

These yields compare favorably to typical 2-4% yields in the United States and Canada, making Mexico an attractive destination for yield-focused investors.

Which Mexican cities offer the best opportunities for rental investment in 2025?

The top Mexican real estate markets for condo investment each offer unique advantages.

Tulum stands out for high ROI potential of 8-15%, driven by strong tourism growth and a focus on luxury and eco-conscious developments. The city attracts affluent travelers willing to pay premium rates for unique experiences. Playa del Carmen provides steady rental demand from its established expat and digital nomad community, offering more predictable returns with lower volatility.

Puerto Vallarta excels in seasonal rentals with high peak-season occupancy and mature infrastructure that reduces operational challenges. Mexico City, particularly neighborhoods like Roma Norte, Condesa, and Polanco, offers excellent long-term rental opportunities with year-round demand from professionals and students. Cancún maintains a strong vacation rental market supported by international airport access and established tourism infrastructure.

Emerging markets worth considering include Mérida with its growing expat community, Los Cabos for luxury market exposure, and areas along the new Mayan Train route in the Riviera Maya that may see accelerated development.

Is 2025 a good time to buy Mexican real estate?

As we reach mid-2025, several factors make this an opportune time for condo investment in Mexico.

Tourism revenue hit record levels in 2024 and continues growing in 2025, supporting strong rental demand. The Mexico residential property market saw 9.7% national price growth in 2024, indicating healthy appreciation potential. Infrastructure improvements like the Mayan Train are boosting Riviera Maya property values by improving accessibility. Both short-term vacation rentals and long-term rentals face high demand from tourists, digital nomads, and local professionals. The peso remains relatively stable against the dollar, providing currency stability for foreign investors.

However, GDP growth is slowing, which may temper future appreciation rates. Interest rates remain elevated, though cash buyers are less affected by financing costs. Some tourist markets risk oversupply in certain segments, particularly in rapidly developing areas. Prices have already risen significantly, reducing the availability of bargain opportunities compared to previous years.

The Mexico real estate market in 2025 remains attractive for investors who choose locations carefully and have realistic expectations about returns.

What's the complete process for foreigners buying Mexican condos?

Foreigners can legally own property in Mexico, but coastal and border properties require a special structure.

First, begin your property search by working with a licensed real estate agent familiar with foreign transactions. For properties within 50km of the coast or 100km of borders, you'll need to establish a fideicomiso (bank trust). The Mexican bank holds title while you're the beneficiary with full ownership rights.

Submit your offer and negotiate terms, typically including a 5-10% earnest money deposit. Due diligence is critical and includes title searches through a notary public, verifying the Manifestación de Construcción (construction permits), checking for liens or debts, reviewing HOA documents and fees, and conducting property inspections.

It's something we develop in our Mexico property pack.

Sign the formal purchase agreement outlining terms, timeline, and payment schedule. Budget for closing costs including notary fees (0.5-1% of purchase price), transfer tax (2-4% depending on state), trust setup fee ($1,500-$2,000), and annual bank trust fees ($500-$700). Final closing involves signing the deed at the notary office, registering with the public registry, and receiving trust documents. Maintain ongoing compliance by paying annual property taxes, trust fees, HOA dues, and maintaining the property.

Which condo types deliver the best returns in Mexico?

Different property types suit different investment strategies in the Mexican market.

Studios and 1-bedroom units offer the highest yields at 6-8% due to lower entry prices and strong demand from singles and couples. Luxury beachfront villas in Tulum command $300-500 per night and can achieve 10-15% yields with proper management. New developments with amenities like pools, gyms, and coworking spaces attract premium tenants and appreciate faster. Properties in emerging neighborhoods undergoing gentrification in Mexico City or newly accessible beach towns offer strong appreciation potential.

For the most stable returns, consider 2-bedroom condos in established areas that balance purchase price and rental demand. Properties near hospitals, universities, or business districts provide consistent long-term rental demand with minimal vacancy.

Specific recommendations vary by intended use. Short-term rentals perform best with beachfront studios or 1-bedroom units with pools. Long-term rentals work well with 2-bedroom units in safe, central neighborhoods. For personal use plus rental income, choose 2-bedroom properties with lock-off capability for maximum flexibility.

What appreciation can you expect from Mexican condos through 2030?

Based on current Mexico real estate trends and economic indicators, appreciation prospects vary by scenario.

Conservative scenarios suggest 3-5% annual appreciation for Mexico City established neighborhoods, secondary beach destinations, and inland colonial cities. These markets offer stable, predictable growth with lower volatility. Moderate scenarios project 5-7% annually for Puerto Vallarta prime locations, Playa del Carmen established areas, and properties adjacent to Cancún's hotel zone.

Aggressive scenarios anticipate 7-10% annual appreciation for Tulum new luxury developments, emerging Mayan Train destinations, and Mexico City gentrifying neighborhoods. These markets carry higher risk but offer substantial upside potential.

Market-specific projections to 2030 include Tulum with 40-60% total appreciation possible but watch for oversupply risks. Mexico City prime neighborhoods may see 25-40% appreciation with steady and reliable growth. Puerto Vallarta, as a mature market, projects 20-35% with stable growth patterns. Playa del Carmen offers balanced prospects with 30-45% appreciation based on strong fundamentals.

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How does your intended use affect what and where to buy?

Your primary purpose dramatically influences the ideal property choice in Mexico.

For personal use or retirement, prioritize lifestyle amenities including walkability, healthcare access, and expat community presence. Puerto Vallarta offers excellent services, Playa del Carmen provides strong community connections, and San Miguel de Allende delivers rich cultural experiences. Choose 2-3 bedroom condos with outdoor space and secure parking, budgeting extra for quality finishes since you'll live there.

Short-term rental investments require prime locations within walking distance to beaches, restaurants, and nightlife. Tulum offers the highest yields, Puerto Vallarta provides an established market, and Playa beaches attract consistent tourists. Focus on studios or 1-bedroom units with pools, modern design, and Instagram-worthy features. Consider properties with on-site property management for easier operations.

Long-term rental investments work best in Mexico City with year-round demand, university areas, and business districts. Choose 2-bedroom unfurnished units with parking in safe neighborhoods. Avoid purely tourist areas with seasonal fluctuations that create vacancy challenges.

For flipping or resale strategies, target emerging neighborhoods, new infrastructure projects, and pre-construction deals. Best opportunities exist along the Mayan Train route and in gentrifying Mexico City colonias. Plan for 2-3 year minimum holding periods and focus on properties below market value needing cosmetic updates.

What are all the costs of owning a Mexican condo as a foreigner?

Understanding total ownership costs is crucial for investment planning.

Annual costs include property tax (predial) at less than 0.1% of assessed value, significantly lower than US or Canadian rates. Fideicomiso fees run $500-$700 annually for bank trust maintenance. HOA fees range from $200-$1,500 monthly, with higher amounts for luxury or beachfront properties. Insurance costs $500-$2,000 annually for property and liability coverage.

Cost Category	Amount	Frequency	Notes
Property Tax (Predial)	<0.1% of assessed value	Annual	Much lower than US/Canada
Fideicomiso Fees	$500-$700	Annual	Bank trust maintenance
HOA Fees	$200-$1,500	Monthly	Higher for luxury/beachfront
Insurance	$500-$2,000	Annual	Property and liability
Utilities	$50-$200	Monthly	Varies by usage
Property Management	20-30% of rental income	Monthly	If renting out
Maintenance Reserve	1-2% of property value	Annual	For repairs/updates

Tax obligations include rental income tax up to 25% withholding for non-residents, IVA (VAT) at 16% on furnished rentals typically passed to tenants, ISH lodging tax of 3-6% in tourist areas collected from guests, and capital gains tax of 25-35% for non-residents on sale.

One-time costs include trust setup ($1,500-$2,000), closing costs (4-7% of purchase price), and furnishing ($10,000-$30,000 for rental-ready condition).

How have condos purchased in 2020 performed, and what's ahead?

Investors who bought Mexican condos five years ago have seen exceptional returns.

Between 2020 and 2025, Tulum led with 50-70% appreciation plus 8-15% annual rental yields. Mexico City prime areas achieved 40-50% appreciation with steady rental income. Playa del Carmen delivered 35-45% appreciation driven by digital nomad demand. Puerto Vallarta provided 30-40% appreciation with strong seasonal rental performance.

A $200,000 Tulum condo bought in 2020 now values at $300,000-$340,000, generating $60,000-$90,000 in rental income over five years for a total return of 80-120%. Similar strong performance occurred across most tourist destinations and prime urban areas.

Looking ahead to 2025-2030, the Mexico property market will likely see more moderate but still attractive growth. Expected annual appreciation of 3-7% nationally reflects a maturing market. Tourist destinations may slow from their recent rapid pace as supply catches up with demand. Mexico City and emerging markets offer steady growth potential with less volatility. Infrastructure improvements will create new opportunities in previously inaccessible areas.

It's something we develop in our Mexico property pack.

Condos purchased in 2025 should see 20-40% appreciation by 2030, plus rental income providing attractive total returns for patient investors.

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 mistakes do condo buyers in Mexico commonly regret?

Learning from others' experiences can save costly errors.

Legal and title issues top the list of regrets. Not verifying the Manifestación de Construcción (construction permits) leads to properties facing legal issues. Skipping professional title searches allows hidden liens or ownership disputes to surface later. Using unlicensed agents or notaries creates invalid transactions. Not understanding fideicomiso rules catches buyers unaware that trusts need renewal every 50 years.

Financial surprises frequently shock new owners. Underestimating HOA fees becomes painful when luxury beachfront buildings charge $1,000+ monthly. Ignoring special assessments means unexpected five-figure bills for major repairs. Overestimating rental income based on peak rates ignores that 51% occupancy in Tulum means many empty weeks. Not budgeting for property management eliminates 25-30% of gross rental income. Forgetting about furnishing costs adds $20,000+ to reach rental-ready condition.

Market misjudgments create long-term problems. Buying in oversaturated areas like some Tulum developments faces excessive competition. Choosing properties difficult to resell such as ultra-luxury or remote locations limits exit options. Not researching seasonal patterns leaves owners surprised by Puerto Vallarta's slow summers. Ignoring local regulations leads to fines when areas restrict short-term rentals. Buying based on promises of future infrastructure or amenities that never materialize destroys projected returns.

Practical oversights compound other issues. Not visiting during off-season misses problems like sargassum on beaches or ghost town atmospheres. Inadequate property inspections hide mold, structural issues, or substandard construction. Choosing the wrong neighborhood creates safety concerns, noise problems, or lack of services. Not learning basic Spanish makes property management exponentially harder. Underestimating maintenance needs in salt air and humidity leads to rapid property deterioration.

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.

Mexico's condo market in 2025 presents compelling opportunities for foreign investors seeking rental income, appreciation, or lifestyle properties. With yields ranging from 5-15% depending on location and property type, Mexico significantly outperforms North American markets while offering lower ownership costs and strong appreciation potential.

Success requires careful market selection, thorough due diligence, and realistic expectations about returns and responsibilities. Coastal tourist destinations offer highest yields but with more volatility, while Mexico City provides stability and consistent demand. Understanding the fideicomiso system, budgeting for all costs, and avoiding common mistakes will position investors for success in this dynamic market.