Long-Term Tenants vs Short-Term Guests: Which Earns More Here?

Every owner here eventually asks the same question: long-term tenants vs short-term guests in Puerto Escondido, which one actually puts more money in the bank? Nightly rates look spectacular on a December calendar and a year-long lease looks dull, but gross income is the wrong number to compare. This guide runs one two-bedroom through three strategies (all short stays, one annual tenant, and a hybrid of both) and follows the pesos through commissions, cleaning, electricity, empty months and tax, so you can see where the gap really sits and run the same math on your own property.

The Short Answer

Short-term guests gross far more; the net gap is much smaller than the gross gap. In our model, nightly guests bring in roughly twice the revenue of an annual tenant, but after costs they net about 60% more, and if you pay a property manager that lead shrinks to around 10%. A hybrid calendar, short stays from November to April and a monthly tenant through the rainy season, lands within a few thousand pesos of the full short-term result with about 40% fewer guest turnovers.

Which one wins for you depends on three things: how many nights a year you can realistically sell, whether you are in town to run turnovers, and how much risk you accept from a tenant who stops paying. The rest of this guide puts numbers on each.

One Two-Bedroom, Three Strategies

The figures below are an illustration, not a forecast. They use mid-range numbers from our own guides: nightly rates and occupancy from the complete owner’s guide (high season 75–95% full, low season 35–55%), and monthly rents from the price table on our long-term rentals page, where a furnished two-bedroom in La Punta lists at 18,000–32,000 MXN a month. USD at a round 18 MXN.

• Short-term: December to March at 2,800 MXN a night and 80% occupancy; April to June plus November at 1,900 MXN and 55%; July to October at 1,500 MXN and 40%. That is 213 booked nights. We assume 15% lost to booking commissions, 4-night average stays, 500 MXN per cleaning, 2,000 MXN a month of electricity paid by the owner and 3,000 MXN a month for internet, water, gas and guest supplies.
• Long-term: an annual tenant at 22,000 MXN a month, one empty month a year between tenants, an agent fee of one month’s rent to find them, the tenant paying electricity, and the owner keeping water and internet at 1,500 MXN a month.
• Hybrid: the short-term calendar from November to April, then a monthly tenant at 17,000 MXN from May to October, with one of those six months left empty.

Three readings. First, short stays win before management, by about 116,000 MXN a year in this example. Second, a manager changes the ranking: at 20% of gross the short-term lead over the tenant falls to about 21,500 MXN, and the hybrid comes out on top. Third, the hybrid earns almost what full short-term does because the rainy-season nights it gives up were the cheapest and emptiest of the year.

Where Short-Term Income Leaks

Gross nightly revenue is loud; the costs underneath it are quiet and constant.

Commissions, cleaning and the electricity bill

Booking platforms keep a share of every reservation, and our long-term page puts the platform fees built into prices at 15–30%. Every check-out means a cleaning (350–600 MXN per turnover in town), fresh linen and restocked basics. And with short stays the CFE bill is yours: guests run air conditioning all afternoon, and the tiered tariff jumps once a home crosses the subsidised threshold. Our long-term guide notes that daily air conditioning can push a monthly bill past $100 USD on its own.

Your time, or a manager’s cut

The owner’s guide estimates 5–10 hours a week of self-management in high season, and professional management at 15–25% of gross. That is the line that decides most comparisons. If you live in Puerto Escondido and enjoy hosting, short stays reward the effort. If you manage from abroad, the honest comparison is the bottom row of the table, not the one above it.

What a Long-Term Tenant Really Costs

A tenant removes most of the running costs, but adds two risks that never appear in a nightly calendar.

Vacancy and finding the next tenant

One empty month is 8% of the year’s rent, and a lease that ends in May can leave the house empty through the slowest months. Agents commonly charge about a month’s rent to place a tenant. The standard deposit here is one month’s rent plus the first month upfront, returned within 30 days of departure, so the deposit protects you against damage, not against a long gap.

Tenant risk and the contract

The bigger risk is a tenant who stops paying. Recovering a property in Mexico goes through the courts and can take months, which is why many owners ask for a guarantor or a póliza jurídica (a legal lease policy sold by specialised firms) on annual contracts. Whatever the length, put it in a written contrato de arrendamiento: rent and currency, payment dates, deposit terms and who pays which utility. Our guide to long-term rental agreements in Puerto Escondido covers the clauses tenants expect. Annual peso rents are usually raised at renewal in line with inflation, around 4–5%, so a long-term rent drifts behind a nightly rate you can reprice every season.

Taxes Change the Gap

The table stops before income tax because the two models are taxed differently. This is orientation, not tax advice; confirm current rules with a contador and the SAT.

Short stays are taxed as lodging

Furnished nightly stays count as lodging and carry 16% IVA. With an RFC on file, platforms withhold 4% ISR and 8% IVA; without one, 20% ISR and the full 16% IVA. The withholding can be a final payment only if your platform income the previous year was 300,000 MXN or less, and our short-term example grosses 472,400 MXN, so it would file regular returns with deducted expenses. The details are in our RFC, ISR and IVA guide for rental owners.

Long leases fall under arrendamiento

An annual lease to someone who lives there is taxed under the arrendamiento regime, where you can deduct either real expenses or a flat 35% of income. Only an unfurnished home rented as a residence is exempt from IVA; a furnished rental generally is not, so ask your contador before you decide whether to leave the furniture in. Non-resident owners are taxed differently again (generally 25% of gross rent with no deductions), which can make the simpler cash flow of a tenant more attractive.

Which Model Fits Your Property

The numbers point to a few patterns rather than one winner.

• Walkable to the beach, good photos, you live here: short stays, at least from November to April. Properties in La Punta and near the beaches sell the most nights.
• You manage from abroad: compare the manager row, not the gross. If a manager would take 20–25%, the hybrid or an annual lease often matches it with far less exposure.
• Family house in a quiet residential area: Rinconada and similar neighbourhoods suit monthly tenants: families and long-stay remote workers ask for exactly this.
• You need predictable cash flow: an annual lease with a guarantor, priced from the ranges in our rental prices by neighbourhood.

The break-even rule of thumb: in our example, short stays need about 147 booked nights a year (around 40% occupancy) just to match the tenant. With a 20% manager, that rises to about 197 nights (54%). If you doubt you can sell that many, the tenant wins. Check what comparable homes charge on our accommodations page before you fill in your own figures.

Ready to fill the calendar either way? List your property with us and take nightly, weekly and monthly bookings directly, with no platform commission stacked on the price.

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