🏝️ Healthy and Real ROI on Vacation Rental Properties: Beyond Monthly Income!

Hector Manuel Mondragon
Jun 9
2 min read

When it comes to investing in real estate, many people focus exclusively on the monthly return on investment (ROI) from rentals. However, those looking to generate sustainable passive income and intelligently grow their wealth should consider two key factors:

Short-term rental income
Capital gains in the revaluation of the property

In this article, we explain how to achieve a healthy and realistic ROI by combining both aspects, especially when investing in pre-sale properties .

📊 What is a healthy ROI in vacation rentals?

In today's market, a healthy and realistic ROI for vacation rental properties ranges from 6% to 12% net per year (*Note* This will depend on each individual case, of course there are exceptions above 12% but be careful with false hopes when purchasing). On average, I dare say that an achievable number is 8% after operating expenses such as maintenance, administration, and platform fees.

This performance depends on key factors such as:

Strategic location / Market (tourist areas with high demand).
Attractive design and amenities for the guest.
Number of rooms (Especially in highly competitive markets).
Quality of operational management (Property Manager).
High season vs. low season.

💡 Hidden value: investing in pre-sales with capital gains

In addition to rental income, many savvy investors maximize their overall ROI by purchasing properties in the pre-sale stage , which allows for:

✅ Purchase at preferential prices , up to 20-30% below the final market value.

✅ Gain capital gains during construction , even before renting it out.

✅ Flexible payment options during the project (In most cases, payments starting at 30% of the pre-sale price are allowed).

✅ In many cases, priority access to the best units (view, orientation, level)

For example, if you purchase a property for $150,000 USD pre-sale, and its market value is $195,000 USD upon delivery, you've already generated a 30% capital gain, even before you start renting it out. This capital gain can be added to your rental ROI for an even more attractive total return.

📌 ROI + Capital Gain: The ideal formula

By adding the annual vacation rental yield (e.g., 8%) to the capital gains obtained over a 2- to 3-year period (e.g., 25-30%), you can achieve a cumulative ROI of 35% to 45% , depending on the development, location, and market conditions.

🧠 Conclusion: Look for opportunities that offer both benefits

At Invest2Stay.com , we evaluate each property not only for its immediate income potential, but also for its projected medium-term appreciation . We look for well-located developments with legal certainty, attractive design, and a solid tourism potential that represent a real investment opportunity.