Methodology

Gross Yield

Gross yield is the annual gross income (before operating costs) divided by purchase price, expressed as a percentage. It's a quick measure of cash flow potential relative to capital deployed.

Example: A property costing $500k that rents for $3,500/month at 70% occupancy:

Simple ROI

Simple ROI subtracts operating expenses from gross income. This gives a more realistic picture of annual cash flow (or cash loss if negative).

What's included in operating costs? Property taxes, insurance, maintenance, utilities, management fees, and any licensed short-term rental or commercial permits. We estimate 30–40% of gross income as a typical range; adjust up or down based on your own numbers.

Median Price/m²

Source: Real Estate transaction listings collected from MLS, broker sites, and direct market sources.

Vintage: Latest 30-day rolling window per zone. Updated weekly.

Sample size: Minimum 150 transactions required for confidence. If fewer, data is flagged as "limited confidence."

Occupancy %

Status: Not yet in Riviera Audit zone data.

Estimate by rental type:

• Short-Term Rentals (Airbnb/VRBO): 60–75% typical. Tourist demand is seasonal; Q4 (Dec–Feb) peaks, Q2 (May–Aug) dips.
• Long-Term Rentals (Annual leases): 85–95% typical. Lease-based; vacancy is lower but tenant churn incurs costs.

Update your inputs based on your own market research or PM track record.

Annual Operating Expense Ratio

Status: Not yet in Riviera Audit zone data.

Typical range: 30–40% of gross income. Breakdown:

• Property management: 8–12% of gross rent
• Maintenance & repairs: 5–10% of gross rent
• Property tax, insurance, utilities: 5–15% of gross rent
• Housekeeping (for STR): 5–15% of gross rent
• Platform fees (Airbnb, VRBO): 3% of gross bookings

Default: 35%. Adjust based on your own PM agreements and local cost structure.

• Capital appreciation: This calculator shows cash flow, not total return. Property prices may rise or fall; simple ROI only captures annual income.
• Mortgage & leverage: We assume all-cash purchase. If financing, cap rate improves but leverage risk increases.
• Income tax: No US or Mexican tax withholding, capital gains, or rental income tax included.
• Foreign exchange risk: Assumes USD stability. Peso appreciation/depreciation affects MXN-denominated costs.
• Regulatory risk: Assumes STR/rental operations remain legal and licensed. Permit changes, ejido claims, or coastal zone restrictions could eliminate rental income.
• Vacancy & turnover: Your occupancy estimate should account for seasonal dips and tenant churn.
• Sargassum seasonality: Riviera Maya coastal zones see sargassum influxes (June–Sept peak). Can reduce STR demand by 20–40% in affected months.

Your calculated yield and ROI should be read in light of the zone's Five-Axis Risk Profile:

• Demand: Tourist/migration demand trends. Low demand = hard to achieve occupancy projections.
• Supply Balance: Pipeline of new inventory. Oversupply = price and rent compression.
• Liquidity: Ease of exit (resale). Illiquid zones = capital lock-up risk.
• Infrastructure: Roads, water, electricity, internet. Poor infrastructure = higher maintenance costs, tenant attrition.
• Trust: Institutional clarity (legal title, regulatory predictability). Low trust = regulatory surprises, title disputes.

Example: A zone with 8% gross yield but 40/100 Trust score and 35/100 Infrastructure is riskier than a zone with 6% yield but 85/100 on both. The higher-yield zone may face permit denials, poor internet (killing STR competitiveness), or title risks that reduce net returns below the lower-yield zone.