When we talk about real estate investment, one of the most important metrics to evaluate the performance of a property is the ROI (Return on Investment). This indicator shows us how profitable an investment is over time, considering the income it generates versus the expenses it implies.

In this article, we explain what ROI is, how it is calculated in real estate, and why it is key when investing in Cancun and the Riviera Maya, one of the most dynamic regions in the sector in Mexico.

1. What is ROI and why is it so important?

ROI is the profit that a property generates through rents in a given period, usually a year, in relation to the money invested. It is a percentage that reflects how efficient real estate investment is being.

This calculation allows investors to know if a property is actually performing as expected, or if there are other options that perform better.

2. How is real estate ROI calculated?

The basic formula for calculating ROI is:
ROI = (Annual Net Profit / Total Investment) x 100

Where:

• Annual Net Profit = Rental Income – Annual operating expenses (maintenance, administration, taxes, etc.)
• Total Investment = Purchase price, closing costs, furniture (if applicable)

Practical example:

Let’s say you buy a vacation rental property in Cancun for $5,000,000 MXN.
Your total expenses when acquiring and putting it into operation are:

• Notary and closing expenses: $300,000 MXN
• Furniture and decoration: $200,000 MXN
• Total investment: $5,500,000 MXN

Income per year: 720.000 MXN (monthly average of 60.000 MXN)
Operating expenses per year: 120.000 MXN (maintenance, administration, services, cleaning)
Annual Net Income = 720.000 – 120.000 = 600.000 MXN

applying the formula:

ROI = ($600,000 / $5,500,000) x 100 = 10.9% per year

This would be a very good ROI for a property in professional operation in a high-demand tourist area like Cancun.

3. What is a good ROI in real estate in Cancun?

In our experience in the real estate sector in the Riviera Maya, we have observed that:

• The average ROI of an investment property in Cancun ranges from 8% to 10% annually, not counting the surplus value, which adds to the overall return over the years.
• Some properties start with lower ROI in the early years (between 4% and 5%) and increase as they consolidate in the market.
• In exceptional cases, we have recorded ROIs of up to 18% annually. These properties are usually in premium locations, with high tourist demand and excellent management.

It is important to note that ROI does not include equity, that is, the increase in property value over time, which represents an additional and significant gain for many investors.

4. Factors Influencing ROI

There are multiple variables that affect a property’s ROI:

• Location: The most determining factor. Properties in tourist areas, well connected and with high demand tend to have better performance.
• Property Type: Studios, vacation apartments and properties with amenities tend to be more attractive for rent.
• High and Low Season: Annual yield may fluctuate if occupancy varies depending on the time of year.
• Professional management: Having a company that manages rents can optimize revenues and reduce vacancies.

A well-located and well-managed property can have surprising profitability, especially in destinations such as Cancun, Tulum or Playa del Carmen.

5. How to choose a property with a good ROI?

Choosing well is essential. That is why we recommend:
✅ Perform a detailed financial analysis.
✅ Evaluate the rental history of similar properties in the area.
✅ Consider projects that already operate with holiday rental schemes.
✅ Consult consultants with experience in the local market.

In our team, we have helped dozens of investors identify properties with outstanding ROIs, guiding them throughout the process to maximize their profitability.

Conclusion

ROI is an essential tool for anyone who wants to invest intelligently in real estate. It’s not just about buying a beautiful property, but about understanding whether that property is really going to generate sustainable profits.

📞 Do you want to know the properties with the best ROI in Cancun or the Riviera Maya?
👉 Schedule a call with one of our sales agents and let us help you make a cost-effective and safe decision