America’s Most-Popular Expat Destination
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Oaxaca offers big-city amenities with a small-town feel, a moderate climate, and a low cost of living. It’s ideal for expats who want authentic Mexico—art, cuisine, and festivals—without the “expat bubble.”
Oaxaca has city amenities with a small-town feel, a moderate climate, and a low cost of living, and if you love Mexican culture—the art, the food, the festivals—then you’re going to love it here.
Most people who move to Mexico make a beeline for places like Playa del Carmen and Puerto Vallarta. Both are great places to spend time, but they’re expat bubbles.
Reviewed By Kathleen Peddicord
Kathleen is the Live and Invest Overseas Founding Publisher. She has more than 30 years of hands-on experience traveling, living, and buying property around the world.
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And, if you’re looking for a place without a Señor Frog’s in sight, you’ll need to head inland…
Those looking for charming colonial architecture with a vibrant culture that’s more Mexico than spring break should turn their gaze towards Oaxaca City.
It checks a lot of boxes: a moderate climate, reasonable prices, flight connections to the States, and high-quality health care.
Also, it isn’t super touristy or flooded with gringos. It’s becoming more of a popular destination, sure, but the city does not rely on tourism as much as other expat favorites do.
Beyond the obvious draws of nice weather and a low cost of living, this is a fascinating city with a lot to offer…
Oaxaca is the capital of the southwestern Mexican state of the same name. It’s famous for its cuisine (such as the versatile mole sauce) and its potent libation, mezcal. Your taste buds are in for a treat if you relocate here.
In its bustling Centro, you’ll find colorful colonial buildings and even more colorful clothing and wares from the various indigenous groups that call the area home.
Most importantly, the state of Oaxaca is home to about a third of Mexico’s indigenous population.
Traditional festivals are a big deal, including Day of the Dead celebrations. People come from all over the world to view the elaborate ofrendas (altars) for this important holiday.
This city is surrounded by mountains, making for a stunning backdrop and plenty of opportunities for adventure. It doesn’t take long to reach the ancient ruins at Monte Albán or the jaw-dropping petrified waterfalls at Hierve el Agua.
There are some great options for hiking in the area, and it’s not that far to the chilled-out beach towns on the Oaxaca coast. It’s a hair-raising ride through the curvy mountain roads, but a quick flight is also an option…
Compared to places like Mexico City or Guadalajara, Oaxaca feels like a small town. It’s easy enough to get around on foot, and local buses are cheap and easy to figure out if you need them.
You’ve got all the conveniences of a big city without many of the annoyances, and it’s got more to offer in terms of culture than places like PV or San Miguel.
While not as well connected as other Mexican destinations, Oaxaca does have an international airport. At the moment, there aren’t many options for direct flights to the States or Canada… but with its increasing popularity, more flight options will be available soon.
Oaxaca is home to a sizable expat community of over 20,000, with most hailing from the States and Canada. All sorts of events are available, so it’s easy to get out and meet people. Whether you’re into yoga, books, or hiking, there’s a club or class for you here.
The low cost of living is a big draw. If you’re up for living like a local, your money will go a long way, especially if you’re earning dollars and spending pesos.
Those who find a simple apartment, stick to walking or public transportation, and shop in local markets can live comfortably for a fraction of what it costs up north.
A couple with modest tastes can easily live on a monthly budget of US$2,000 here, and that includes rent. Add another US$500 to that, and you can enjoy a few nights out on the town and occasional weekend trips to the coast or other nearby towns.
Aside from Oaxaca’s unique appeal, Mexico in general is a top choice for Americans and Canadians. There are good reasons why it’s home to more American expats than any other country…
It’s geographically close… so close, in fact, that it’s one of the few overseas retirement destinations you can pack up your car and drive to. It has familiar stores, brands, conveniences, and so on. It’s also easy to set up life in Mexico from a residency perspective.
The pastel-colored buildings of Centro with the rolling mountains in the background… The air in the local markets filled with a variety of intriguing aromas… That smoky taste of a good glass of mezcal… This is life in Oaxaca.
See our full guide to Mexico’s visas and residency options—so you can understand the main pathways, what typically qualifies you, and what to prepare before you apply.
| Expense | Monthly Costs | Notes |
|---|---|---|
| Mortgage | – | – |
| HOA Fees | $100 | |
| Property Taxes | $15 | Annual charge (variable): $100 to $200. |
| Transportation | $90 | Local bus: 60c per person per trip. Taxis: $2 to $4 per trip. |
| Gas | $30 | For heating water and cooking. (Usually included in HOA fees.) |
| Electricity | $50 | Including reasonable air conditioning use. |
| Water | $20 | One 20-liter jug costs $2 to $3. |
| Cell Phone | $30 | |
| Internet | $35 | |
| Cable TV | $30 | |
| Household Help | $220 | $7 per hour. |
| Entertainment | $330 | Eating out twice a week at a mid-range, local restaurant: $165 ($10 per meal for a couple). Local drinks twice a week at a nearby watering hole: $130 ($3 to $4 for a beer; $7 to $8 for a cocktail). Movie theater trip twice a month: $35 ($8.75 per ticket). |
| Groceries | $685 | Including a Sam’s Club trip. |
| Gym Membership | $60 | |
| Medical Appointment | $80 | Private specialist visit at English-speaking clinic. |
| TOTAL | $1,775 |
| Expense | Monthly Costs | Notes |
|---|---|---|
| Rent | $800 | For a furnished two-bedroom apartment in a desirable location. |
| Transportation | $90 | Local bus: 60c per person per trip. Taxis: $2 to $4 per trip. |
| Gas | $30 | For heating water and cooking. |
| Electricity | $50 | Including reasonable air conditioning use. |
| Water | $20 | One 20-liter jug costs $2 to $3. |
| Cell Phone | $30 | |
| Internet | $35 | |
| Cable TV | $30 | |
| Household Help | $220 | $7 per hour. |
| Entertainment | $330 | Eating out twice a week at a mid-range, local restaurant: $165 ($10 per meal for a couple). Local drinks twice a week at a nearby watering hole: $130 ($3 to $4 for a beer; $7 to $8 for a cocktail). Movie theater trip twice a month: $35 ($8.75 per ticket). |
| Groceries | $685 | Including a Sam’s Club trip. |
| Gym Membership | $60 | |
| Medical Appointment | $80 | Private specialist visit at English-speaking clinic. |
| TOTAL | $2,460 |
| Expense | Monthly Costs | Notes |
|---|---|---|
| Rent | $500 | Cheapest part of town; basic one-bedroom rental. |
| Transportation | $25 | 20 to 30 bus rides at 60c per person per trip. Occasional taxis rides. |
| Gas | $30 | For heating water and cooking. |
| Electricity | $50 | Including reasonable air conditioning use. |
| Water | $20 | One 20-liter jug costs $2 to $3. |
| Cell Phone | $12 | Cheapest monthly plan with minimal data. |
| Internet | $22 | – |
| Cable TV | – | – |
| Entertainment | $150 | Monthly cost for eating out twice a week ($70) plus local drinks twice a week ($80). |
| Groceries | $330 | Shopping at local markets and avoiding imported goods. |
| TOTAL | $1,139 |
Get a clear breakdown of everyday expenses in Mexico—including housing, utilities, groceries, transportation, and healthcare—so you can budget accurately before you make the move.
When you visit Oaxaca and Mexico in general for 180 days or less you can enter on a tourist visa.
For a longer stay or move to Isla Holbox or another destination in Mexico, apply for a temporary residency visa, which is initially granted for a year and can be renewed for longer afterwards.
Subsequently, after four years you can apply for permanent residency.
The main requirement to get a temporary residency visa, other than the application, which must be submitted in a consulate outside of Mexico, is the proof of economic solvency.
To be determined as being economically solvent, you need to have a monthly income of at least US$3,275 over the last 6 months (some consulates request a 12-month verification).
Another possibility is that you have savings of at least US$54,600 over the last 12 months.
Other ways to qualify for temporary residency include volunteer work, temporary work placements, owning a house in Mexico, family connections, or making a capital investment in Mexico.
See what retirement can look like in Mexico—including lifestyle considerations, practical planning tips, and what to expect as you explore your options.
Reviewed By Kathleen Peddicord
Kathleen is the Live and Invest Overseas Founding Publisher. She has more than 30 years of hands-on experience traveling, living, and buying property around the world.
Start Your New Overseas Life Today
A world full of fun, adventure, and profit awaits! Sign up for our free daily e-letter, Overseas Opportunity Letter, and we’ll send you a FREE report on the 12 Best Places To Retire Overseas In 2026
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Oaxaca, Mexico, is known for its raditional festivals, including Day of the Dead celebrations. People come from all over the world to view the elaborate ofrendas (altars) for this important holiday.
Oaxaca has unique appeal and is agood place to retire. Most importantly, Mexico in general is a top choice for Americans and Canadians. There are good reasons why it’s home to more American expats than any other country…
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