A Guide for International Investors: Buying Property in Los Cabos

Los Cabos, which includes cities such as San José del Cabo, Cabo San Lucas, Todos Santos, and La Paz, is rapidly becoming a hotspot for international real estate investment. It’s the closest tropical region to California, making it particularly attractive to U.S. investors looking for a nearby getaway or investment opportunity. With stunning beaches, a rapidly growing tourism industry, and favorable investment conditions, Los Cabos is emerging as a prime destination for real estate investment.

This guide will walk you through the process of buying property in Los Cabos, highlighting the top cities, explaining the benefits and risks, and comparing Los Cabos with other Mexican destinations like Tulum and Puerto Vallarta.

1. How Can International Investors Buy Property in Los Cabos?

Buying property in Los Cabos is relatively straightforward for international investors, including those from the U.S. and Canada. However, due to its coastal location, foreigners must go through the fideicomiso (trust) process, similar to other Mexican coastal areas.

Fideicomiso (Trust)

• Foreigners cannot directly own property within 50 kilometers (31 miles) of the coast or 100 kilometers (62 miles) of an international border. However, they can buy property through a bank trust known as a fideicomiso.
• The bank acts as a trustee on behalf of the buyer (you), holding the title but granting you full ownership rights. You can lease, sell, or pass on the property to heirs.
• The fideicomiso is valid for 50 years and can be renewed indefinitely, granting the foreign buyer all the benefits of ownership.

2. Top Cities to Invest in Los Cabos

Los Cabos offers several unique destinations for investors, each with its own charm and potential for growth.

San José del Cabo

• Vibe: San José del Cabo is a quieter, more traditional Mexican town compared to bustling Cabo San Lucas. It is known for its art galleries, fine dining, and cultural events.
• Investment Potential: San José is ideal for residential investments, especially for vacation homes, boutique hotels, or retirement properties.

Cabo San Lucas

• Vibe: Cabo San Lucas is the entertainment capital of Los Cabos, offering world-class resorts, nightlife, and water sports.
• Investment Potential: Cabo San Lucas has a thriving short-term rental market, making it ideal for Airbnb investments and vacation properties. Commercial investments such as resorts or restaurants are also highly sought after.

Todos Santos

• Vibe: Known for its bohemian and artistic vibe, Todos Santos is a quieter retreat with art galleries, surf spots, and boutique hotels.
• Investment Potential: Popular with expats and artists, Todos Santos offers opportunities in eco-tourism and boutique hotels, as well as single-family homes.

Los Barriles

• Vibe: Located on the Sea of Cortez, Los Barriles is a popular spot for kite surfers and retirees.
• Investment Potential: Ideal for retirement homes and smaller-scale residential developments.

Cabo Pulmo

• Vibe: Known for its coral reefs and marine parks, Cabo Pulmo is a protected area, making it an eco-tourism hotspot.
• Investment Potential: Eco-friendly developments and boutique hotels catering to environmentally conscious travelers are prime opportunities here.

La Paz

• Vibe: The capital of Baja California Sur, La Paz offers a more laid-back atmosphere and is growing in popularity among families and retirees.
• Investment Potential: Opportunities abound for beachfront condos, family homes, and small commercial ventures like restaurants and hotels.

3. Why Los Cabos is a Prime Investment Destination

Proximity to California

Los Cabos is the closest tropical destination to California, making it highly accessible for American investors. A direct flight from Los Angeles to Cabo San Lucas takes just over two hours, making it an ideal weekend getaway or second home destination for U.S. citizens.

Tourism Growth

Los Cabos has seen a significant increase in tourism over the past decade. In 2022, the region welcomed nearly 3.5 million tourists, a figure that continues to grow due to ongoing investment in infrastructure and resort development. This strong tourism base ensures consistent demand for vacation rentals and commercial properties.

Potential for U.S. Investment

As U.S. real estate markets become more saturated, many investors are turning to Mexico for new opportunities. Los Cabos is expected to be one of the biggest recipients of U.S. investment in Mexican real estate due to its proximity, climate, and rapidly developing market.

4. Risks and Benefits of Investing in Los Cabos

Risks

• Currency Exchange: Fluctuations in the value of the Mexican peso against the U.S. dollar can affect your returns.
• Market Volatility: While Los Cabos is growing, the market can be volatile, especially in response to global economic conditions.
• Hurricane Risk: The Baja Peninsula is occasionally affected by hurricanes, which can damage property and affect occupancy rates for rentals.

Benefits

• Lower Taxes and Fees: Mexico offers relatively low property taxes, and closing costs are also typically lower than in the U.S.
• Lower Building Costs: Construction costs in Los Cabos are often much lower than in U.S. coastal cities, allowing for more competitive pricing.
• Growing Tourism: With tourism increasing annually, rental properties in Los Cabos are in high demand, providing excellent returns on investment.

5. Comparing Los Cabos to Tulum and Puerto Vallarta

Tulum

• Tourism: Tulum has been growing rapidly, particularly with eco-conscious travelers and luxury tourism. However, it tends to be more seasonal compared to Los Cabos.
• Investment: Tulum offers a booming vacation rental market but lacks the long-term stability that Los Cabos offers, especially with short-term rental demand.

Puerto Vallarta

• Tourism: Puerto Vallarta sees roughly 4 million visitors annually, more than Los Cabos, but it is also more spread out.
• Investment: Puerto Vallarta offers a mix of residential and commercial opportunities but has a slower growth trajectory compared to the rapid development seen in Los Cabos.

6. Brevitas Now Accepting Listings for Los Cabos

Brevitas is excited to announce that we are now accepting property listings for Los Cabos. Whether you're looking to invest in a luxury beachfront home, a boutique hotel, or a commercial venture, our platform connects international investors with the most exclusive listings in Mexico.

Conclusion

Los Cabos is emerging as one of the most attractive real estate markets in Mexico for international investors. With its proximity to California, growing tourism industry, and lower building costs, it offers immense potential for both residential and commercial investments. Whether you're looking to buy a vacation home in San José del Cabo or develop an eco-friendly hotel in Cabo Pulmo, Los Cabos offers a range of opportunities to suit different investment goals.

As always, investors should carefully weigh the risks and benefits, and Brevitas is here to help guide you through the process, from finding the right property to managing your investment.