Mexico City: rental yields are moderately good

Residential Valuation Specialist | January 14, 2019

Last Updated: Jan. 14, 2019
ALVARO OBREGON PRICE/ SQ.M.(US$) YIELD (p.a.) PRICE/SQ.FT. (US$)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
Jardines del Pedregal 2,463 10.49 5.11% 229 0.97
Los Alpes 2,645 10.28 4.66% 246 0.96
San Angel 2,213 9.29 5.04% 206 0.86
Santa Fe 2,049 10.85 6.35% 190 1.01
BENITO JUAREZ apartments
Del Valle 1,984 8.35 5.05% 184 0.78
MIGUEL HIDALGO
Bosques de las Lomas 2,489 7.83 3.78% 231 0.73
Lomas de Chapultepec 2,834 9.86 4.18% 263 0.92
Polanco 4,817 13.51 3.37% 447 1.26
All yields are gross - i.e., before taxes, repair costs, ground rents, estate agents fees, and any other costs. Net yields (what you´ll really earn) are typically around 1.5% to 2% lower.
Source: Propiedades.com Definitions: Data FAQ See also: Update Schedule

Gross rental yields in Mexico City - the return earned on the purchase price of a rental property, before taxation, vacancy costs, and other costs - are moderately attractive.

Alvaro Obregon includes Jardines del Pedregal, which hosts some of Mexico´s richest families.  A typical property here might cost $2,500 per square metre, and be rentable for a return of around 5%. It also includes a large part of Santa Fe, one of Mexico City´s major business districts, which is mostly high rise but also has Centro Santa Fe, the largest mall in Latin America.  Residential property in Santa Fe can cost around $2,000 per square metre, and earn a yield of 6.35%. Other districts for which we have numbers include Los Alpes and San Angel.

Benito Juarez is the richest alcaldia in Mexico and is primarily populated by the middle and upper middle classes, with social indicators similar to that of advanced developed countries, with the  highest levels of education, health, and income in the country. The borough is home to a number of landmarks such as the World Trade Center, the Estadio Azul, the Plaza Mexico, and the Polyform Cultural Siqueiros.  

We have figures for Del Valle, where apartments cost around $2,000 per square metre and may yield a rental return of around 5%.  As always, these are rough figures and the range of variation is large.

Just west of the historic centre, Miguel Hidalgo contains mostly working class areas in and around Tacuba and Tacubaya, but its southwest contains some of the most exclusive colonias.  At its centre is Chapultepec Park (the "Bosque de Chapultepec") (Chapultepec Forest) - the largest city park in Latin America. Most of the diplomatic missions in Mexico City are located in Miguel Hidalgo, mainly in the Lomas de Chapultepec and Polanco area.  These are highly-priced districts, with an average price of $4,817 per square metre in Polanco, $2,489 in Bosque de las Lomas.  Rental yields average between 3.3% and 4.2%.

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