Mexico Rental Property ROI Calculator
Enter a purchase price and the rent you expect, and see your cash-on-cash return, cap rate, monthly cash flow and break-even, the way our agents run the numbers for clients. Works for short-term and long-term rentals, with Mexican closing costs, IVA and income tax built in.
Investment Property ROI Calculator
Compare short-term and long-term rental strategies to maximize your Mexico real estate investment
Investment Analysis Results
Investment Summary
Annual Income
ROI Metrics
OCCUPANCY ANALYSIS (SHORT-TERM)
Introducing the Mexico Life Realty Investment Property ROI Calculator
Unlock the potential of real estate investment in Mexico with our comprehensive ROI Calculator, designed to provide investors with a detailed financial analysis of property investment opportunities. This powerful tool offers an in-depth look at the potential returns for both short-term and long-term rental strategies.
Key Features:
- Flexible Rental Strategy Analysis: Toggle between short-term and long-term rental projections
- Comprehensive Financial Modeling: Calculate potential income, expenses, and key financial metrics
- Detailed Seasonal Breakdown: Examine income potential across high, mid, and low seasons
- Tax and Expense Considerations: Factor in IVA, income tax, property management, and other critical expenses
Important Disclaimer:
This ROI calculator is a strategic planning tool intended to provide investors with a comprehensive overview of potential property investment scenarios. While we strive for accuracy, the calculations and projections should be considered estimates only.
Actual financial outcomes may vary significantly based on:
- Local market conditions
- Specific property characteristics
- Unexpected expenses or income fluctuations
- Changes in tax regulations
- Individual property management strategies
We Strongly Recommend:
- Consulting with a local accountant or financial advisor
- Conducting thorough due diligence
- Verifying all financial assumptions with local experts
- Considering multiple scenarios and potential variations
The Mexico Life Realty ROI Calculator offers a starting point for your investment analysis, providing insights to help you make more informed decisions. However, it should not be considered a definitive financial forecast or professional financial advice.
Invest Wisely. Invest Informed.
How to use the calculator
Start with the asking price
Closing costs in Mexico usually land between 5 and 8 percent of the price. Leave the default if you do not have a quote from the notary yet, then add renovation and furnishing if you plan to rent furnished.
Use rent you can prove
Choose short-term or long-term. For short-term, enter a nightly rate and occupancy for each season. Ask us for the rental history of the building you are considering; the spread between buildings in the same town is large.
Read cash-on-cash first
It is the return on the money you actually put in. Cap rate ignores your financing, so a leveraged purchase can look better on cap rate than it feels on your bank balance.
What the results mean
Net operating income
Gross rent minus vacancy, HOA fees, utilities, maintenance, management, property tax and insurance. This is the property's income before financing and before income tax.
Cash flow
Net operating income minus IVA, income tax and mortgage payments. Positive cash flow means the property pays you every year; negative means you are paying to hold it.
Cap rate and rental yield
Rental yield is gross income over total investment. Cap rate is net operating income over total investment. Both let you compare properties regardless of how each is financed.
Break-even point
The number of years of cash flow it takes to recover the total cash invested. It does not include appreciation or the equity you build by paying down a loan.
Frequently asked questions
What is a good ROI for a rental property in Mexico?
Most investors we work with target a cash-on-cash return of 6 to 10 percent on a furnished condo in the Banderas Bay area. Short-term rentals in high-demand buildings can run higher in a strong season, and lower when a building's HOA limits nightly rentals. Judge the number against the building's real rental history, not a listing brochure.
Cash-on-cash return versus cap rate: which one should I use?
Cash-on-cash return is the yearly cash flow divided by the cash you actually put in, so it reflects your financing. Cap rate is net operating income divided by the total purchase cost and ignores financing. If you are paying cash the two converge; with a mortgage, cash-on-cash is the number that matches your bank balance.
Which taxes does the calculator include?
IVA, Mexico's value-added tax, applies to short-term rental income and is entered at the current rate. Income tax on rental profit is entered as a rate you can adjust for your situation. Property tax, called predial, is a yearly amount you enter directly. Closing costs are a percentage of the purchase price. Confirm your rates with a Mexican accountant before you buy.
How do the high, mid and low seasons work?
The short-term model splits the year into a five-month high season from December to April, a two-month mid season in May and November, and a five-month low season from June to October. Each has its own nightly rate and occupancy so the projection follows the way bookings actually fall in Puerto Vallarta and Riviera Nayarit.
Can I print or save the analysis?
Yes. After you calculate, use Print This Analysis to produce a one-page report with the inputs, the annual numbers, the ROI metrics and the occupancy chart. Save it as a PDF from the print dialog and send it to your accountant or lender.