A projected ROI is only as useful as the assumptions behind it. In Playa del Carmen, the difference between a persuasive sales projection and a serious investment model is usually found in the expenses, vacancy and seasonality.

Start with gross revenue - then keep going

For a vacation rental, gross revenue is typically driven by average nightly rate multiplied by occupied nights. That number is not profit. A credible model should then account for management, platform fees, cleaning structure, utilities, HOA, maintenance, insurance, taxes, furnishing replacement and vacancy.

Three useful return measures

• Gross rental yield: annual gross rent divided by purchase price.
• Net operating yield: income after relevant operating expenses divided by the capital basis used.
• Cash-on-cash return: useful when financing or staged capital contributions are involved, but the methodology must be consistent.

Example - illustrative, not a forecast

If a property generated USD 30,000 in annual gross rental revenue and required USD 12,000 in operating expenses, the net operating income would be USD 18,000 before financing, income tax and owner-specific costs. Whether that is attractive depends on the total capital invested, risk, personal use and alternative opportunities.

SEDETUR hotel occupancy data can help describe tourism conditions in the region, but hotel occupancy is not condo occupancy. Never substitute destination-level tourism statistics for unit-level rental evidence.

Next step

Ask EMEXA to compare a property’s projected economics with competing opportunities and clearly state the assumptions behind the analysis.

Sources for web developer / editorial verification