Why Smart Investors Are Choosing Los Cabos Over Maui Right Now

If you've been looking at vacation rental investments in Maui, you need to read this before you pull the trigger.

What Just Happened in Hawaii

On December 15th of last year, Maui passed Bill 9 — sweeping short-term rental restriction legislation that effectively shuts out outside investors from operating vacation rentals on the island. The backstory: the Lahaina wildfires destroyed a significant amount of local housing, sending rents soaring for residents. The community pushed back hard, and lawmakers responded by heavily restricting Airbnb-style rentals to protect the local rental market.

The result? If you're not a Hawaii resident and you're looking at Maui as a rental investment, you're now facing serious legal headwinds. The market that looked attractive six months ago looks very different today.

This Isn't Just a Maui Problem

New York City has been cracking down on short-term rentals for years. Other high-demand markets across the U.S. are following suit. Any city dealing with a housing affordability crisis is eventually going to look at vacation rentals as part of the problem — and investors are the easiest target.

The trend is clear: the more desirable a market becomes, the more likely local governments are to restrict outside investment in the short-term rental space.

Why Los Cabos Is a Different Story

I had a call yesterday with a gentleman who started his search in Maui, shifted to Vallarta and Punta Mita, and ultimately landed on Los Cabos — for good reason.

Here's what the math looks like in Cabo right now:

• Highest average daily hotel room rate in Mexico
• Strong year-round demand driven by direct U.S. flights, warm weather, and a well-established tourism infrastructure
• No short-term rental restrictions — you can list on Airbnb, VRBO, or any platform without fighting city hall
• Properties near the beach at his price point are realistically achieving 70% occupancy rates

That last number deserves a note: when you're underwriting a rental property, always model it at 60% occupancy, not 70%. Give yourself a cushion. If the property hits 70, great — that's upside. But your investment thesis should hold at 60.

The Use-It-and-Rent-It Model

This particular investor plans to use the property six to eight weeks a year. He's retired, so Cabo is part of his lifestyle, not just a spreadsheet exercise. The rest of the year, the property works for him.

That's the ideal scenario — a place you actually want to be, in a market where the property generates income when you're not there, without the regulatory risk hanging over your head.

The Bottom Line

If you're shopping for a vacation rental investment and you're worried about Airbnb restrictions, Los Cabos deserves a serious look. The rental market here is strong, the legal environment is favorable, and the lifestyle upside is real.

The markets that are cracking down on short-term rentals all have one thing in common: they became too popular and couldn't manage demand. Cabo has managed that growth while keeping the investment environment intact.

Ready to run the numbers on a Cabo rental property? Reach out directly — I've been on the ground here for 10 years and I'll give you a straight answer.

Fletcher Wheaton REmexico Real Estate fletcher@remexico.com