Investment Framework Methodology
How we evaluate Riviera Maya zones for investor-grade capital allocation
4-Pillar Scorecard
Each zone is evaluated across four independent dimensions, then weighted to produce an overall investment score.
1. Demand Durability (25%)
Measures resilience and growth of tourist and domestic demand for real estate and short-term rentals.
2. Supply & Liquidity (25%)
Assesses market depth, inventory health, and buyer/seller balance. Strong liquidity enables exit strategies.
3. Income Viability (30%)
Evaluates achievable net operating income, rental yields, and feasibility of income-generating strategies.
4. Legal & Execution Risk (20%)
Evaluates title clarity, regulatory compliance, environmental exposure, and legal barriers to ownership/operation.
Each pillar ranges 0–100. Composite score: 0–100.
Investment Strategies
Zone scores map to strategy classifications based on risk profile, income stability, and appreciation potential.
💰 Core Income
Score 75+ • Deep liquidity, verified rental income, low execution risk. Target: yield-first investors with 5+ year hold.
⬆️ Core-Plus
Score 60–75 • Strong demand with manageable supply. Blended income + appreciation potential. Target: growth-oriented income investors.
🔧 Value-Add
Score 55–65 • Discounted basis, operational or legal work required. 3–5 year repositioning horizon. Target: specialist operators.
🏗️ Development
Score variable • Pre-construction or heavy supply inflection. Requires institutional capital, higher return hurdle. Target: developers, hedge funds.
⏸️ Pending Verification
Insufficient data, gate failures, or structural headwinds. Not underwritable without material new information. Revisit quarterly.
Investability Gates
Before a zone can receive a favorable rating, it must pass binary eligibility screening on six dimensions.
Clear title, verified ownership chain, correct foreign buyer structure (fideicomiso or decree) confirmed
Municipal/state registration confirmed (RETUR-Q in Quintana Roo), zoning permits intended use, HOA deed does not prohibit short-term rental
Coastal erosion, wetland/cenote proximity, flood risk, hurricane history, water infrastructure verified
Management infrastructure available, utilities reliable, staffing model viable, maintenance reserve budgeted
Sufficient comparable closed sales per quarter, buyer depth (domestic + international), realistic exit probability within 3–5 years
Independent, recent transaction data available; municipal filings accessible; operator feedback confirmed
Key Rule: A zone that fails an eligibility gate cannot receive a favorable investment rating, regardless of modeled returns. Gates override scores.
Return Framework
Investment decisions rest on transparent, scenario-based return analysis, not headline cap rates.
5-Year Unlevered USD IRR
Reflects annual net operating income, capital expenditures, and terminal exit value. Calculated in USD at base FX assumption (19 MXN/USD). Reported for base, downside, and stress scenarios.
IRR = f(entry price, NOI year 1–5, capex, exit cap rate, selling costs, FX)Assumed Achievable ADR & Occupancy
Not asking prices, not hotel rates, not best-case occupancy. These are realistic net achievable averages based on comparable STR operating data, management fees, seasonality, and competition.
Operating Expense Stack
All expenses as % of gross revenue (typical ranges for Quintana Roo):
- • HOA Fees: 12–18%
- • Management: 20–25%
- • Utilities/Services: 8–12%
- • Maintenance Reserve: 6–9%
- • Furnishing Replacement: 4–7%
- • Property Tax: 3–5%
- • Insurance: 2–4%
- • Platform Fees (Airbnb/VRBO): 6–8%
- Total: 50–70% (net margin: 30–50%)
Scenario Modeling
Base Case: Mid-point assumptions for demand, ADR, occupancy, expense ratios
Downside: 20% ADR reduction, 15% occupancy loss, 2% expense inflation
Stress: Severe: 40% ADR loss, 30% occupancy loss, regulatory shock
Data Sources & Verification
Confidence in scores depends on data quality. Each zone is assigned a confidence grade based on source independence, recency, and sample size.
Independent verified transaction data, municipal filings, STR platform data 90 days old or fresher, 15+ comparable transactions
Public sources + operator feedback, 6–12 month lag, 8–14 comparables, model-based estimates for missing data
Sparse transaction history, old data (6+ months), few comparables (<8), heavy reliance on market models, significant assumptions
Primary Data Sources
- Price & Transaction Data: MLS, notarial records, developer pre-sales, market surveys
- Occupancy & Demand: Hotel market reports, airport traffic (ASUR/GRUPO AEROPORTUARIO), STR platform analytics
- Permits & Development: Municipal permits office, developer announcements, construction tracking
- STR Legal Status: Quintana Roo RETUR-Q registry, municipal zoning codes, HOA deed samples
- Operating Data: Property management companies, Airbnb/VRBO data, owner surveys
Update Frequency & Alerts
Framework scores are refreshed monthly. Confidence bands and gate status are updated when new data arrives or conditions change materially.
Monthly: Price, occupancy, pipeline, momentum signal
Quarterly: Pillar scores, strategy classification, IRR remodeling
On Event: Gate status updates (legal changes, environmental events, regulatory shifts)
Annual: Comprehensive methodology review and peer benchmarking
Data as of: August 2026
This framework is designed for retail and semi-institutional capital allocation in Riviera Maya real estate. It reflects market conditions as of the stated date. Always conduct independent due diligence before committing capital.