This case study documents the acquisition of an established Airbnb property in Tulum, Mexico, and outlines the full process from initial screening to post-closing operations.
From start to finish, the transaction took approximately 4-5 months. The process included property sourcing, tax and legal research, price negotiations, company and bank account setup, transaction closing, and the transfer of the Airbnb listing and rental management.
1. Defining Buying Criteria
The process began by clearly defining the target property type and identifying deal-breakers. A flexible investment budget was set, ranging from USD 600,000 to USD 2 million.
Following an internal strategy review, the buying criteria were documented and the search formally started. The primary objective was to acquire a property with a minimum 7% net yield (from rental income), located in the Quintana Roo region.
Immediate cash flow after acquisition was a key requirement, which meant the focus was placed entirely on established short-term rental businesses rather than new developments or homes.
Key criteria:
- Minimum price: USD 500,000
- Maximum price: USD 2,000,000 (including closing costs)
- Target cap rate: 7% or higher, after all operating and management costs (pre-tax)
2. Property Search and Preliminary Tax Research
The initial property search relied on AirDNA, combined with Google reverse searches to identify active Airbnb listings for sale.
Four properties in Tulum matched the initial criteria. Brokers representing these properties were contacted to obtain detailed profit and expense data from the existing owners. This information was used to assess performance and structure offers that aligned with the target cap rate.
During these discussions, two additional off-market opportunities were introduced that also met the investment requirements.
In total, six properties were shortlisted.
At the same time, tax and legal research was conducted with local legal advisors to understand closing costs, ongoing tax obligations, and the regulatory framework for operating short-term rentals in Mexico.
3. Scheduling Property Viewings
Property viewings were scheduled next, with the coordination process taking approximately two weeks.
During the site visit to Mexico, many properties were inspected across different neighborhoods and price ranges. Not all of the properties were expected to be acquisition candidates. The objective was to build a broader understanding of local market conditions, pricing dynamics, and quality differences between areas.
Conducting a high number of viewings over a short period provided valuable market context and made it easier to identify relative value when stronger opportunities appeared.
All viewings were completed over two days. Following the trip and subsequent review, one of the shortlisted properties was selected for the offer stage.
4. Offer, Negotiation and Due Diligence
The negotiation phase followed a standard process of offers, counteroffers, and incremental adjustments.
After several rounds of negotiations, an agreement was reached at a price approximately USD 175,000 below the initial asking price.
Key transaction terms included were:
- 10% deposit
- Purchase funds held securely in escrow
Formal due diligence was then initiated. This included a review of historical profit and loss statements, a full inspection carried out by an independent third-party contractor, and legal verification of the title deed by a local real estate lawyer.
5. Company and Bank Account Setup
To optimize the ownership and tax structure, the acquisition was completed through a Mexican subsidiary linked to an existing European holding company.
Despite the administrative complexity often associated with company formation in Latin America, the incorporation process and local bank account setup were completed within approximately 90 days.
Note: Individual foreign buyers are not required to form a company and typically acquire property through a bank trust (fideicomiso).
6. Currency Conversion (EUR to MXN)
Finalizing the transaction required converting euros into Mexican pesos (MXN). This proved challenging, as most European banks did not support direct EUR-to-MXN conversions.
Several institutions offered the service, but at conversion fees of up to 4% of the transaction value, which was considered uneconomical. A local Mexican bank was ultimately selected, offering a more competitive conversion cost of approximately 2.5%.
For future transactions, alternative solutions such as Wise and other international payment platforms have been identified as potentially more cost-effective options for converting EUR or USD into MXN.
7. Closing at the Notary
The transaction was finalized at a Notary’s office in Playa del Carmen, where funds were transferred and the sale was formally completed.
As in-person attendance was not possible, a local lawyer was appointed under Power of Attorney (POA) to sign on behalf of the buyer. Several months later, the original notarial documents and title deed were collected in person.
Approximately three months after closing, the official title deed was issued, confirming full legal ownership.
8. Rental Management and Monthly Cashflow
To maintain a hands-off operating structure, the existing property manager was retained following the acquisition. The manager had an established track record, including an Airbnb rating above 4.95 across more than 60 reviews.
A full-service management agreement was put in place, covering utility payments, cleaning, guest turnover, and ongoing maintenance. Detailed monthly profit and loss reports are provided, with net proceeds distributed automatically to the designated bank account.
An external accountant was also engaged to manage tax filings, profit distributions, and ongoing compliance.
Rental Performance (2023 to 2026)
Since the transaction closed in June 2023, the property has generated over USD 300,000 in net rental income.
This represents an 7.5% net cash-on-cash yield (pre-tax).
Monthly net profit after all costs (including management, cleaning, VAT, and repairs):
- Jun 2023: $5,247
- Jul 2023: $9,608
- Aug 2023: $9,135
- Sep 2023: $6,504
- Oct 2023: $13,582
- Nov 2023: $9,991
- Dec 2023: $16,868
- Jan 2024: $18,449
- Feb 2024: $12,849
- Mar 2024: $11,186
- Apr 2024: $11,022
- May 2024: $6,119
- Jun 2024: $12,200
- Jul 2024: $11,452
- Aug 2024: $10,851
- Sep 2024: $8,610
- Oct 2024: $3,373
- Nov 2024: $9,512
- Dec 2024: $13,882
- Jan 2025: $14,575
- Feb 2025: $12,480
- Mar 2025: $8,164
- Apr 2025: $10,696
- May 2025: $8,128
- Jun 2025: $8,339
- Jul 2025: $10,666
- Aug 2025: $7,181
- Sep 2025: $4,450
- Oct 2025: $6,655
- Nov 2025: $8,077
- Dec 2025: $19,166
- Jan 2026: $13,516
- Feb 2026: $9,737
- Mar 2026: $10,088
- Apr 2026: $5,780
- May 2026: $5,195
Below is the sample report for October, 2023.
Please note: All figures are in Mexican pesos.
Interested in Buying Real Estate in Mexico?
When evaluating real estate opportunities in Mexico, access to reliable market data and structured due diligence can materially reduce risk. This typically involves identifying suitable properties, reviewing historical performance, and verifying legal and tax considerations before proceeding.
Where needed, Global Property Guide can also assist with property sourcing, acquisition support, and independent due diligence, working alongside local professionals to help investors navigate the process more efficiently.
