Many of those who buy Isla Mujeres real estate do so with the plan to eventually retire on Isla and of course what better way to build income for your future retirement that buying Isla Mujeres real estate and letting it out in the meantime, until such time as you are ready to live in the property full time.
Renting it out really means letting the property for up to 200 nights a year, still leaving 165 nights a year for your own use, although unfortunately not many of us get 165 days a year holiday, perhaps someone who is semi retired would be lucky enough to achieve that much time off a year.
If your investment on Isla has been at the luxury end of the Isla Mujeres real estate market then for a three bedroom three bathroom home you can expect anywhere between $500 to $700 per night rental income, once the property has become established. Even after taking off expenses it is not unreasonable to expect $100,000 pa rental income. Even properties owned by foreigners in the Colonia ( which is the less smart part of Isla, where the locals live) are getting $200 to $300 per night rental and more. This is easy to understand when some hotels on Isla Mujeres are charging over $800 per night for a double room.
When you stay in a hotel the expense doesn't stop there because you have to eat all your meals out, which is fine if that is what you enjoy but many don't; preferring to sometimes make breakfast at home or spend an evening in barbecuing. Also if you have children it can be quite nice to put the children to bed and spend a quite evening by the pool.
The fact is that wherever you have chosen to invest in Isla Mujeres real estate it will prove to be an excellent investment and whilst some areas if the island are more luxurious that others, there is no such thing as a bad area. Which answers the original question; Why do so many retire to Isla Mujeres? because it's the most friendly places you will ever find yourself and has to be one of the safest places in the world, with serious crime non existent.