For 2026 underwriting, realistic Mexican beach-market occupancy is 50-70% — not the 70-80%+ that drove 2018-2021 deal flow. This calculator models gross-and-net yield for short-term-rental property in Mexico's foreign-buyer-popular beach markets. It accepts purchase price, ADR, occupancy, professional management fees, operating costs, and the federal-and-state tax overlay (lodging tax, ISR for non-residents) — and returns gross yield, operating-expense breakdown, and net yield.
It is built for honest-underwriting use. It does not produce headline yield numbers based on aggressive 2018-2021 occupancy assumptions; it requires current market data (AirDNA, professional management firms, recent comparables) and a buffer for reasonable downside.
How to use the calculator
The calculator requires:
- Purchase price in USD (or USD-equivalent if MXN-denominated). For Mexican coastal property, this should reflect the all-in cost including the fideicomiso closing component (5-9% closing costs above purchase price).
- Average daily rate (ADR) in USD. Source from AirDNA, the property's existing rental history (if any), or current comparable listings. For 2026 underwriting, use current ADR data — not 2018-2021 historicals. ADR has moved meaningfully across most Mexican beach markets.
- Occupancy rate as percentage. Realistic Mexican beach-market occupancy for 2026 is typically 50-70% for quality professionally-managed inventory in foreign-buyer-popular destinations. The 70-80%+ that drove 2018-2021 underwriting is no longer typical.
- Professional management fee as percentage of gross rental revenue. Typical range 18-25% for full-service Mexican beach-market property management.
- Operating costs including utilities, HOA, insurance, routine maintenance.
- Lodging tax by state — typically 2-3% in Quintana Roo, lower or higher elsewhere. See /mexico/short-term-rental-rules/ for the state-by-state framework.[SAT (Servicio de Administración Tributaria), federal lodging tax framework, 2026-04]
- ISR (federal income tax) for non-residents at 25% on gross rental income (or 30% on net for residents who elect to file).[SAT, federal ISR rates for non-resident rental income, 2026-04]
The calculator outputs:
- Gross yield: annual rental revenue divided by purchase price
- Operating expenses breakdown: management, utilities, HOA, insurance, maintenance, lodging tax
- Net yield: net cash flow to owner after expenses and ISR, divided by purchase price
- Cap rate: NOI before financing divided by purchase price
Assumptions
- Occupancy of 55-65% as the base case, with downside scenario at 45% and upside at 70% (override per market)
- ADR for 2026 vintage, not 2018-2021 peak ADR — adjust upward only with current AirDNA data
- Peak vs. shoulder season: peak (Dec-April for Caribbean Mexico, Nov-March for Pacific) carries 50-70% of annual revenue; the calculator uses blended annual occupancy
- Management fee 22% as default — Mexican full-service runs 18-25% with marketing platforms layered on top
- 25% non-resident ISR on gross as default — buyers should model both elections (the resident election with deductions can reduce tax for properties with significant deductibles)
When to override the default
Override defaults when:
- Quintana Roo registry rule applies. As of 2026, Quintana Roo has a state STR registry requirement — operating without registration carries fines and platform takedowns. Factor compliance cost into operating costs.
- Building-specific HOA rules ban or restrict STR. Tulum building-quality variance is meaningful — confirm STR is permitted before underwriting on STR yield assumptions.
- You have direct-booking infrastructure. Direct bookings save the 15-20% platform fee but require marketing investment.
- Property has hurricane-season closure expectations. Some Caribbean properties effectively close Sep-Oct; factor reduced annual occupancy.
- You're managing self-direct rather than professionally. Self-management saves the 18-25% but requires meaningful time investment and local presence.
What the calculator does NOT account for
- Capital gains at sale: future capital appreciation is not in scope
- Financing leverage: the calculator works on cash-purchase basis; for financed purchases, model debt service separately
- Cross-border tax framework: US Form 1116 / Canadian T2209 reconciliation runs separately on the home-country tax return
- Currency repatriation cost: MXN-to-USD or MXN-to-CAD on cash distributions adds modest FX cost
- Major capex events: roof, HVAC, pool replacement budget
- Platform fee changes: Airbnb/VRBO platform commission structures evolve
For the cross-border-currency-cost calculation, see /calculators/cross-border-currency-cost/.
Methodology
The calculator implements a standard income-property underwriting framework adapted for Mexican STR specifics:
- Annual rental revenue = ADR × Occupancy × 365
- Operating expenses = Management fee (% of revenue) + Utilities + HOA + Insurance + Maintenance + Lodging tax (% of revenue)
- NOI before tax = Annual rental revenue - Operating expenses
- ISR = ISR rate × Gross rental revenue (non-resident election) OR ISR rate × Net rental income (resident election with deductions)
- Net cash flow = NOI before tax - ISR
- Net yield = Net cash flow / Purchase price
The non-resident 25% ISR election is generally cleaner administratively but produces higher tax than the resident election with full deductions for many scenarios with significant deductible expenses (depreciation, financing interest if applicable). The calculator allows the user to model both elections.
Next step
After running the calculator, foreign buyers should:
- Model multiple scenarios — base case, downside (-20% occupancy, -10% ADR), upside cases
- Verify building-specific HOA quality and STR rules before purchase — particularly important for Tulum, where building-quality variance is meaningful
- Confirm Quintana Roo state STR registry status for QR properties
- Engage cross-border tax counsel for the home-country reconciliation
- Review destination-specific market context — see /mexico/tulum/, /mexico/cabo/, /mexico/puerto-vallarta/, /mexico/playa-del-carmen/ for destination-specific yield context
For weekly Mexico STR-and-cross-border reads, /newsletter sends one curated note per week.
For the broader Mexican STR regulatory framework, see /mexico/short-term-rental-rules/.
Disclaimer
This article is for informational purposes only and does not constitute financial or investment advice. Mortgage rates, currency exchange rates, occupancy and ADR data, and property values change frequently. Calculator outputs are estimates based on user inputs and should not be relied on without independent verification. Consult a qualified financial advisor and lender before making decisions based on this information.
Current as of 2026-09-25. We review financial content quarterly and update on rule changes. To report an error, contact us.