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How Lucrative Are Rentals in Puerto Rico Real Estate?

If you are out there considering your next big investment, a real estate property would be one of the best decisions to land on - and Puerto Rico is one great place to start. The rental market in Puerto Rico shows signs of being both lucrative and active. The average rental yields on apartments and vacation rentals in San Juan, Puerto Rico, are approximately 7.89%, with yields across the city ranging from 3.90% to 13.20%. The highest rental yields are found in the Rio Piedras district, with averages between 9% and 10%​.

Additionally, as of the third quarter of 2023, the average gross rental yield in Puerto Rico (San Juan) is 8.36%. It's important to note that these yields are gross, meaning they are calculated before taxes, repair costs, ground rents, estate agent fees, and any other costs. Net yields, which represent what investors would actually earn, are typically 1.5% to 2% lower​.

Key Takeaways

  • The rental market in Puerto Rico, particularly in San Juan, offers lucrative average gross rental yields of 8.36%, making it an attractive investment destination.
  • Tourism significantly boosts short-term rental demand, driving up median rents and property values, especially in popular coastal areas.
  • Legal and tax considerations, including lease agreements, tenant and landlord rights, tax implications, and registration requirements, are crucial for successful rental investments.
  • Luxury properties in top locations such as Old San Juan, Dorado, and Culebra offer high rental revenue potential, appealing to both local and international tourists.

Greatest Factors Contributing to the Rental Revenue


Tourism is a key driver in Puerto Rico's rental market, notably influencing the growth of short-term rentals. These rentals, primarily full homes, have significantly expanded between 2014 and 2020, boosting median rents and property values. This expansion, driven mainly by professional operators, indicates a vibrant market with substantial investment opportunities. The demand in tourist-favored coastal areas highlights the potential for high returns on investment, presenting an appealing scenario for investors to contribute to the local economy while benefiting from the island's tourism boom.

Short-Term Rentals

It was observed that properties rented out for less than 90 days, known as short-term rentals, have led to an increase in median and property rental rates. The report from the Center for a New Economy (CNE) discusses the impact of short-term rentals (STRs) on Puerto Rico's housing market from 2014 to 2020. It highlights that STRs, largely driven by platforms like Airbnb, have become increasingly commercialized and concentrated in the hands of hosts with multiple listings.

This trend aligns with tourism variances and disaster-driven activities, such as Hurricane María and the COVID-19 pandemic. While STRs are credited for economic development opportunities, they challenge housing affordability and contribute to neighborhood gentrification, especially in coastal municipalities.

Top Places for Vacation Rentals

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Top vacation rental locations in Puerto Rico that are popular among locals and foreigners. To embark on a profitable venture by renting out a luxury property, explore these exceptional locations as your starting point:



Rental Revenue Potential

Old San Juan

The vibrant historical heart of Puerto Rico offers a rich cultural experience with various accommodations.

San Juan vacation rentals are high due to the constant tourist flow and cultural attractions.

Palmas del Mar

A luxury resort community in Humacao known for its accommodations, golf courses, and beaches.

Very high, especially for luxury and long-term rentals.


Offers proximity to San Juan's amenities with a more suburban experience.

Moderate, appealing to those seeking suburban comfort close to the city.


Famous for luxury resorts, golf courses, and beautiful beaches, attracting tourists seeking a high-end experience.

High, with a demand for luxury beachfront villas and upscale apartments.


Known for its proximity to San Juan and the Luis Muñoz Marín International Airport, with the Isla Verde district being a tourist favorite.

High, due to its beaches, nightlife, and variety of accommodations.


Celebrated for picturesque beaches like Jobos Beach and Crash Boat Beach, offering exceptional snorkeling and culinary delights.

High, particularly for properties offering beach access and water activities.


Offers unique stays on vacation homes with panoramic views and proximity to Flamenco Beach, one of Puerto Rico's top-rated beaches.

Very high, especially for unique and secluded properties with ocean views.

Aguadilla and Rincón

Known for surfing, snorkeling, and beautiful sunsets, making them popular choices for vacation rentals.

High, with a strong market for rentals catering to surfers and beach lovers.

Central Mountains

Provides serene mountain retreats amidst lush greenery, appealing to those seeking tranquility.

Moderate to high, depending on the uniqueness and appeal of the retreat.

Vieques and Culebra

Known for pristine beaches and a range of accommodation options, from cozy studios to luxurious villas.

Very high, especially for properties offering privacy and direct beach access.

Legal Framework for Puerto Rico Rentals

As an investor looking to start a rental business, especially in luxury properties, there are several critical areas that must be understood thoroughly to ensure a successful and legally compliant operation. Here's an overview of these key areas:

Lease Agreements

These are legally binding contracts between the landlord (property owner) and the tenant (renter). For luxury properties, these agreements often include specific clauses about using amenities, maintenance responsibilities, and any unique conditions pertinent to high-end properties. Investors must ensure these agreements are comprehensive, clear on rights and obligations, and compliant with local laws to protect both parties.

Tenant and Landlord Rights

Understanding the legal rights and obligations of both tenants and landlords is crucial. This includes knowing about eviction procedures, security deposit regulations, property access rights, and maintenance obligations. In luxury rentals, where services and amenities may be more extensive, defining these rights in the context of exclusive services is essential.

Tax Implications

Rental income is generally taxable, and understanding the specific tax obligations in Puerto Rico, including income tax, property tax, and any taxes specific to rental properties, is vital. Investors should also be aware of any tax benefits or exemptions available, especially under acts designed to promote regional investment, such as Act 60.

Registration Requirements

In many jurisdictions, including Puerto Rico, rental properties may need to be registered with local or national authorities, especially if offered short-term vacation rentals. This can involve obtaining a license, meeting zoning requirements, and ensuring compliance with hospitality regulations.

Standards for Guest Safety (Guest Experience)

Ensuring guests' safety and satisfaction is paramount, particularly in the luxury market. This includes adhering to building codes, ensuring the property is secure, maintaining high cleanliness standards, and providing amenities and services that meet the expectations of luxury travelers. Investors should be familiar with local regulations dictating minimum standards for guest safety and comfort.

Property Management

Managing a luxury rental property involves more than just handling bookings. It includes maintaining the property to a high standard, providing concierge and guest services, managing staff, and dealing with any issues that arise. For many investors, hiring a professional property management company experienced in luxury properties can be a valuable investment, ensuring the property is well-maintained, and guests receive a high level of service.

Best Properties for Rental Business

Luxury real estate properties in Puerto Rico offer significant opportunities for investors targeting the island's growing tourism sector. The allure of Puerto Rico as a luxury destination is undeniable, with its world-class beaches, lush landscapes, and rich cultural heritage. Here's how these property types fit into the tourism landscape for your next rental business:

Luxury Houses

Offering expansive spaces, privacy, and often exclusive amenities, luxury houses in Puerto Rico cater to travelers seeking a high-end, personalized stay. Properties like Dorado Beach, a Ritz-Carlton Reserve, epitomize the luxury available, providing guests with unique experiences such as butler service and access to private beachfront and forested areas. These properties attract tourists looking for opulent accommodations and serve as venues for events, weddings, and corporate retreats, driving additional revenue streams for investors​.

Enlisted below are some of the best luxury houses you may find in Puerto Rico:

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The luxurious 5-bedroom residence at 1 Malaga Street in San Juan, Puerto Rico, offers an exquisite beachfront living experience with stunning sea views, elegant interiors, state-of-the-art appliances, and advanced smart home features, priced at $7,890,000.

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This newly-renovated mountainside home in Rio Grande offers breathtaking coastal views, 3 bedrooms, 3.5 baths, a pool, and luxury amenities just outside the Wyndham Rio Mar for a fraction of the resort's living cost.

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This three-story, $3,950,000 residence at 52 Las Vistas De Rio Mar offers six luxurious bedrooms, 4.5 elegant bathrooms, two state-of-the-art kitchens, and exclusive amenities within the Grand Río Mar Resort and Spa. It epitomizes beachfront luxury and leisure in Río Grande, Puerto Rico.


Luxury condominiums offer a blend of privacy and community, often featuring shared amenities like pools, fitness centers, and on-site dining. They particularly appeal to tourists who appreciate the convenience and security of condo living, along with the high-end finishes and services that luxury condos typically provide. In tourist-heavy areas, these properties can attract a steady stream of visitors year-round, making them a lucrative investment.

You would never want to miss checking out these prestigious condo units as well:



This luxurious 3 bed, 3.5 bath beachfront condo in Miramar, San Juan's Cosmopolitan Condominium, spans 2,600 Sq. Ft. with high-end finishes, ocean views, and premium amenities, priced at $2,550,000.



The Bahia Plaza at Paseo Caribe in Santurce, San Juan, features an exclusive $2,800,000 model unit, a 2,063 sq.ft., 2-bedroom, 2.5-bath condominium, showcasing luxurious design, spacious living, and stunning ocean and city views, fully furnished by renowned designers.



This luxurious beachfront condo in Condado, San Juan, spans 3,170 sq. ft. and has three bedrooms and 2.5 bathrooms. It offers exclusive living with stunning Atlantic Ocean views, high-end amenities, and private floor access, all within walking distance of essential services and entertainment.

High-end Apartments

Situated in urban or resort areas, high-end apartments appeal to visitors who seek the comfort and amenities of luxury living with the convenience of city or beach access. The appeal of high-end apartments is often their strategic location, offering easy access to Puerto Rico's top attractions, dining, and shopping. Properties that combine luxury living with unique amenities, such as spa services, fine dining, and cultural experiences, can significantly enhance the guest experience, encouraging longer stays and repeat visits.

Here are the top picks for some of the distinguished apartments in the market:

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This Condado penthouse redefines luxury with its 2,000 sq. ft of living space across two floors, featuring three bedrooms, state-of-the-art amenities, panoramic ocean views, and exclusive access to a pool, gym, and 24/7 security, all within a stone's throw of San Juan's best offerings.

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1379 PASEO DON JUAN #5B & 5C, SAN JUAN, PR 00907

The Paseo Don Juan in Condado offers a luxurious three-bedroom, 3.5-bath waterfront apartment spanning 2,111 sq. ft. with modern amenities and breathtaking ocean views, blending historical charm with contemporary living.


The Puerto Rican rental market is exceptionally vibrant and offers lucrative investment opportunities in luxury properties. With average rental yields soaring high, the market is ripe for investment. Factors such as booming tourism, the rise of short-term rentals, and the allure of top vacation spots underscore the island's potential. At Christie's International Real Estate Puerto Rico, we understand the intricacies of this market and offer unparalleled expertise in catering to clients looking to buy, sell, or rent out their luxury properties.

Our deep knowledge of the legal framework, combined with our exclusive property listings ranging from luxury houses to high-end condominiums and apartments, positions us uniquely to serve our clients' needs effectively. Contact us today to discover how we can help you capitalize on the vibrant rental market in Puerto Rico and turn your investment into a thriving luxury rental business.


How much is the average rent in Puerto Rico?

The average rent in Puerto Rico can vary widely depending on the location and type of property. As of the most recent data, the average rent for a one-bedroom apartment in the city center is approximately $700-$1,000 per month, while outside the city center, it ranges from $500-$800 per month.

What is the vacancy rate in Puerto Rico?

The vacancy rate in Puerto Rico also varies by region and property type. On average, the vacancy rate for residential properties is around 12-15%, reflecting the island's economic conditions and housing demand.

What risks and challenges are associated with investing in Puerto Rico’s rental market?

Investing in Puerto Rico's rental market comes with several risks and challenges:

  • Natural Disasters: The island is prone to hurricanes and other natural disasters, damaging properties and affecting rental demand.
  • Regulatory Changes: Changes in local laws and regulations regarding short-term rentals and property taxes can impact profitability.
  • Market Competition: Puerto Rico's popularity as a tourist destination means high competition, particularly in prime locations.
  • Maintenance Costs: High-end properties require regular maintenance and upgrades to meet luxury standards, increasing operational costs.
  • Economic Fluctuations: Economic downturns or declines in tourism can lead to decreased rental demand and lower yields.


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