The Property at a Glance (Case Study)
Profile (anonymized):
- Restored 1-bedroom, 1-bath colonial home near Centro Histórico (N/D exact m²).
- Private plunge pool + enclosed patio; walkable to cafés and galleries.
- Furnished for 2–3 guests; fast Wi-Fi; split A/C; in-unit laundry (host-friendliness = high).
- Channel mix: primarily Airbnb, limited direct bookings (N/D % split).
Positioning & Rental Strategy
- Dynamic pricing tied to city events and seasonality.
- Minimum stay: 3 nights; weekly & monthly discounts to lift shoulder-season occupancy.
- Professional photography + amenity-first title/description; guest screening + rapid response SLAs.
- Local manager (18% service) handles check-ins, cleanings, and maintenance.
Market context for benchmarks
Independent data sources indicate typical Mérida occupancy around the mid-40s to high-50s with ADRs near US$70–80 (≈ MXN 800–900), depending on property quality and season—useful for cross-checking your own pro forma. airdna.co+2Airbtics | Airbnb Analytics+2
What the Numbers Look Like
Target outcome: Average net operating income (NOI) ≈ $1,200 CAD/month (before taxes, mortgage, and depreciation).
Illustrative month (typical, not peak):
- Occupancy: ~58% (≈ 17–18 nights; aligned with published medians for Mérida’s better-positioned listings). Airbtics | Airbnb Analytics
- ADR (realizable): ~CAD $105 (≈ US$76 reference ADR). airdna.co
- Gross booking revenue (GBR): ~CAD $1,837 (17.5 nights × $105).
- Less platform fee (host, ~3%): –$55
- Local management (18% of GBR): –$321
- Utilities/Internet/Pool service/Supplies (typical): –$260
- Estimated NOI: ≈ $1,200 CAD
Cost-to-Revenue ratio: ~35% operating cost share in a non-peak month (≈ $636 ÷ $1,837).
- Note: Cleaning fees are largely guest-paid; owner expense varies by turnover arrangement (N/D).
- Annualization requires seasonality modeling (peak Dec–Mar, softer late spring). airroi.com
What if your ADR or occupancy slides?
At 50% occupancy (≈ 15 nights) or ADR of CAD $95, this unit still trends toward break-even to modest NOI under the same expense structure. Conversely, optimizing ranking, reviews, and calendar gaps can push NOI above $1,400 CAD in strong months. (Ask us for the full sensitivity table.)
How This Stacks Up Against Other Investments
- Vacation rental “good” cap rates: Industry guidance often brackets 6–10% (market-dependent). Airbnb ROI above that typically requires above-median occupancy and disciplined cost control. airdna.co+1
- Stock market (context only): Long-horizon S&P 500 nominal averages center near ~10% (broad history), while some recent 10-year windows run ~11–14%; forecasts vary widely. Real estate offers cash yield + equity + inflation hedging, but with active-management risk. Investopedia+2SoFi+2
Bottom line: If you value cash flow today plus long-term appreciation, a well-run Mérida vacation rental can compete—especially when bought below replacement cost and professionally operated.
Why Mérida for Short-Term Rentals?
- Safety: Mérida consistently ranks among the safest cities in Mexico (and the broader Americas), a critical driver of repeat leisure and medical travel. Yucatán Magazine+1
- Tourism momentum: The Yucatán region posted strong post-pandemic gains; recent reports show rising hotel occupancy and record visitor flows, which spill over to STR demand. travelweekly.com+2The Yucatan Times+2
- Affordability vs. peer markets: Purchase prices remain attractive relative to coastal hotspots, enabling healthier Airbnb ROI on a risk-adjusted basis (N/D—property-specific; we model this in the downloadable case).
- Connectivity: International routes and regional draws (gastronomy, archaeology, cenotes, medical services) diversify demand beyond a single season. Travel Off Path
Transparency: What We Know vs. What’s N/D
To keep trust high, here’s what’s documented in this summary vs. what is N/D (and how we’d validate it for you):
Documented/benchmarked in public sources
- Typical Mérida occupancy and ADR ranges. airdna.co+1
- Seasonality patterns (peak/shoulder). airroi.com
- Regional tourism and safety context. Yucatán Magazine+2travelweekly.com+2
N/D in this blog (in the downloadable case file or via NDA):
- Exact address, purchase price, closing/renovation costs, and detailed P&L.
- Channel-mix conversion data, RevPAR by month, and cancellation curves.
- Tax, accountant, and trust/LLC structuring specifics for foreign buyers (jurisdiction-dependent).
What This Means for an Investor Like You
If your goal is reliable monthly cash flow with tangible upside through smart renovations and revenue management, Mérida continues to offer a compelling Airbnb ROI story—provided you buy the right asset, price dynamically, and operate professionally. Compared with passive equities, you’re trading some liquidity for income you can influence.