Los Cabos – encompassing the twin resort cities of Cabo San Lucas and San José del Cabo at the tip of Mexico’s Baja California Sur – has emerged as one of the hottest real estate markets in 2025. Blessed with year-round sunshine, spectacular beaches, and a booming tourism economy, Los Cabos is attracting everyone from luxury homebuyers and retirees to digital nomads and savvy investors. In 2025, buying real estate in Los Cabos means tapping into a prime market that offers strong returns, a desirable lifestyle, and growing global connectivity. This long-form guide will walk you through the top areas, investment opportunities, legal considerations, and steps to confidently purchase property in Los Cabos.
Top Real Estate Markets in Los Cabos
Cabo San Lucas: The vibrant heart of Los Cabos, Cabo San Lucas is famous for its marina, nightlife, and iconic Arch at Land’s End. Real estate here ranges from high-end hillside villas in gated communities like Pedregal, to oceanfront condos and luxurious resort residences. Cabo San Lucas attracts buyers seeking vacation homes that double as income-generating rentals. Thanks to its popularity with tourists, owners can capitalize on the Airbnb and vacation rental market by renting their villas or condos to visitors year-round. Its combination of upscale amenities and entertainment options makes Cabo San Lucas ideal for those looking for both investment potential and a lively lifestyle.
San José del Cabo: The more tranquil, artsy sister city to Cabo San Lucas, San José del Cabo offers colonial charm and upscale living. Known for its historic art district and laid-back vibe, this area features luxury gated communities (such as Palmilla and Querencia) and beachfront condo developments along the golden sand coastline. Buyers here are often drawn to the quality of life – golf courses, fine dining, and a sense of community – as well as the beautiful swimmable beaches. San José’s resort and residential developments, like those in Puerto Los Cabos, offer ocean-view homes with access to marinas and golf, making it popular among retirees and families seeking elegance and comfort.
Emerging Areas – Todos Santos & La Ventana: Beyond the core of Los Cabos, other Baja Sur towns are rising in popularity as lifestyle and investment hubs. Todos Santos, a “Pueblo Mágico” on the Pacific coast, is gaining fame as a bohemian surf town and artist community. Its tranquil beaches and boutique hotels appeal to those looking for a more authentic Baja experience. Digital nomads have also discovered Todos Santos for its relaxed atmosphere and growing availability of high-speed internet, making it a hip spot for remote work. Similarly, La Ventana (near La Paz) has transformed from a quiet fishing village into a kitesurfing and outdoor adventure haven. With the arrival of reliable internet (thanks in part to services like Starlink) and a tight-knit international community, La Ventana has become an attractive place to buy a home or bungalow for those seeking an active, outdoorsy lifestyle off the beaten path.
Hidden Gems and Up-and-Coming Zones: Within Los Cabos and its surroundings, several “hidden gem” locations offer promising investment potential. The East Cape – a stretch of pristine coastline east of San José del Cabo – is one such area. Once very remote, the East Cape is now on the radar after the development of the luxury resort community Costa Palmas (featuring a Four Seasons and Aman resort) and improved road access. Small villages like La Ribera and Los Barriles are seeing interest from investors looking for beachfront land to develop or off-grid eco-retreats. On the Pacific side, areas like Pescadero and Cerritos (south of Todos Santos) offer secluded beachfront lots and surfside homes that are still reasonably priced but poised for growth as more people seek tranquility outside the tourist hotspots. These up-and-coming zones benefit from being “next in line” for development as Los Cabos expands, making them intriguing options for forward-thinking buyers.
Investment Opportunities: Residential, Commercial, and Land
Luxury Homes & Oceanfront Villas: Los Cabos is synonymous with luxury real estate. The region boasts spectacular oceanfront villas that cater to celebrities and high-net-worth buyers, as well as spacious hacienda-style homes within exclusive communities. Investing in a luxury home here can serve as both a personal retreat and a high-end rental property. Ocean-view estates in communities like Pedregal, Palmilla, or along the Corridor between Cabo and San José often feature infinity pools, modern architecture, and access to private beach clubs or golf courses. These trophy properties tend to appreciate well given limited inventory and constant demand for Cabo’s top addresses.
Short-Term Rentals (Airbnb and VRBO): The vacation rental market in Los Cabos is thriving. Purchasing a condo or villa with the intent to rent it out short-term can yield significant returns due to the region’s strong tourism numbers. Many visitors prefer private rentals over hotels, especially families or groups traveling together. Areas near the beach or downtown Cabo San Lucas are particularly lucrative for Airbnb/VRBO rentals, as they allow tourists to walk to attractions. When considering a short-term rental investment, take note of property management services, HOA rules, and rental permit requirements. Overall, a well-located and marketed rental property in Los Cabos can provide an excellent mix of personal use and rental income, though investors should also plan for seasonal fluctuations and platform fees.
Commercial Real Estate (Hotels, Retail, & Development Projects): Beyond residential properties, Los Cabos offers robust commercial investment opportunities. The hospitality sector is booming – boutique hotels and bed-and-breakfasts in charming areas like Todos Santos, or small beachfront hotels in Cabo, are hitting the market as tourism diversifies. Investing in a hotel or resort property can be complex but potentially very rewarding given Cabo’s year-round popularity. Likewise, retail and mixed-use developments are expanding to serve the growing population. New shopping centers, restaurants, and entertainment venues are springing up, especially in high-traffic tourist zones. Another angle is investing in development land designated for commercial use – for example, parcels earmarked for new resort projects or mixed residential communities. Such land banking can lead to big gains once development plans materialize. Los Cabos’ continued growth ensures that well-chosen commercial investments, whether an existing business or raw land with permits, can yield strong ROI over the coming years.
Buying Land for Development: There’s a finite supply of prime land in coastal Baja, which makes land acquisition an interesting play. Whether you dream of building a boutique hotel, a small condo complex, or a private estate, buying land in Los Cabos or its outskirts can be a strategic investment. Key considerations include ensuring clear title (some parcels are “ejido” communal land requiring extra due diligence), zoning and land use regulations, and availability of infrastructure (road access, utilities, water). The upside of land investments is flexibility – you can hold the land as its value increases or pursue development. We are seeing more investors purchase lots in the hills with panoramic views or large beachfront tracts on the East Cape. For instance, a beachfront development parcel on the East Cape was recently listed around $16.5M, illustrating both the scale and potential of land deals in the region. Partnering with local architects, builders, and consultants can help navigate building permits and environmental regulations, turning a raw piece of Baja land into a profitable venture.
Legal and Tax Considerations for Foreign Buyers
Foreign Ownership: Can Foreigners Buy Real Estate in Los Cabos? Yes – Mexico welcomes foreign investment in real estate, and Los Cabos is no exception. However, because Los Cabos lies within the restricted zone (within 50 km of the coastline), foreign buyers cannot hold title directly in their own name. Instead, they purchase through a mechanism known as a fideicomiso or via a Mexican corporation. A fideicomiso is essentially a bank trust that grants the foreign buyer all rights to use, rent, and sell the property, while the title is held in trust by a Mexican bank. This trust is typically 50 years in length (renewable) and is a commonly used, safe method for foreigners to own residential property along the coast. Alternatively, if a foreigner plans to purchase multiple properties or engage in certain commercial real estate activities, they might form a Mexican corporation to hold the titles. A corporation can directly own property in restricted zones, and the foreigner owns the corporation. Both methods are widely used, and local closing attorneys or Notarios can guide buyers on the best structure for their situation.
Fideicomiso vs. Mexican Corporation: Choosing between a fideicomiso and setting up a corporation depends on your needs. For a single vacation home or condo, a fideicomiso trust is usually the simplest route – it involves a one-time setup fee and an annual trust fee (usually a few hundred dollars). The buyer is the beneficiary of the trust with full ownership rights, and the trust can name heirs to inherit the property. On the other hand, if you plan to purchase property as an investment (especially income-producing like rentals or commercial properties), a Mexican corporation may make sense. The corporation (which can be 100% foreign-owned) holds the deed, and you own the shares of the company. This option comes with more administrative upkeep – e.g., tax filings and potentially higher closing costs – but it allows you to own property directly, purchase multiple properties under one entity, and conduct business activities. It’s wise to consult a real estate attorney in Baja to determine which structure aligns with your investment plans.
Taxes: Property Tax, Capital Gains, and Rental Income: Investors will find Mexico’s property taxes (predial) to be quite low compared to the U.S. or Canada. Annual property taxes in Los Cabos are a fraction of a percent of the property value – many homeowners pay only a few hundred dollars per year for an average home. When it comes to selling property, capital gains tax is an important consideration. Foreign sellers (non-residents) are generally subject to a capital gains tax of roughly 35% on the net profit from the sale. However, there are exemptions and strategies to reduce this. For example, if the property was your primary residence and you have Mexican residency, you may qualify for an exemption on capital gains (one sale every few years, up to a certain value). It’s essential to obtain an RFC (tax ID) in Mexico and work with a Notario to calculate your cost basis and any allowable deductions (such as documented improvements) to minimize the tax. Rental income from a Los Cabos property is also taxable in Mexico. Platforms like Airbnb now withhold a percentage of rental income for taxes if you do not register with a Mexican tax ID. By registering and working with an accountant, you can often pay a lower tax rate on rental income (as low as 4% with certain arrangements) compared to the default withholding. Additionally, U.S. and Canadian owners should report foreign rental income at home, though tax treaties often prevent double taxation. Overall, proper tax planning with a cross-border tax expert will ensure you stay compliant and make the most of any deductions or exemptions.
Residency Options for Investors and Retirees: While buying property in Mexico does not automatically grant residency, it can strengthen your case for obtaining one. Mexico offers Temporary and Permanent Resident visas that many foreign property owners take advantage of. Typically, qualification is based on economic solvency – proving a certain monthly income or assets/savings above a threshold. Owning property of sufficient value (often around USD $300,000 or more, depending on consular criteria) can sometimes be used to meet the investment/assets requirement for residency. Many retirees who purchase in Los Cabos choose to become Temporary Residents, which makes living long-term easier (no need for border runs every 6 months) and can lead to Permanent Residency after four years. Digital nomads and remote workers may also consider the Temporary Resident visa if they plan to stay year-round and work remotely (even though you’re earning income abroad, it’s legally fine to do so under a resident visa). Having residency also offers practical benefits like being able to open a local bank account, buy a car, and potentially exempting capital gains on a primary home sale. It’s worth consulting with an immigration specialist to explore the best visa option once you’ve invested in Mexican real estate.
New Infrastructure & Connectivity: Starlink, Airports, and Roads
Los Cabos’ rapid growth has been matched with significant investments in infrastructure and connectivity, which in turn boosts real estate values. One game-changer has been the introduction of modern, high-speed internet across Baja Sur. Starlink satellite internet is now available in the region, bringing broadband to even remote beachfront or mountainous areas that were previously off-grid. This has enabled homeowners in secluded spots like the East Cape or rural Todos Santos to work remotely and stay connected, attracting more buyers to areas that used to be impractical for year-round living. In addition to Starlink, local telecom providers have expanded fiber-optic service in the main towns, so most neighborhoods in Cabo and San José have reliable internet suitable for video conferencing, streaming, and running online businesses. The result is a surge in digital nomads and entrepreneurs setting up base in Los Cabos, knowing they can count on connectivity while enjoying the beach life.
Airport Expansion & Global Access: Los Cabos International Airport (SJD) has become one of Mexico’s busiest hubs, and continual upgrades are making it easier than ever to get here. As of 2025, the airport is servicing an impressive number of direct flights – connecting Los Cabos with over 30 cities in the United States and Canada, as well as new international routes in the works. (In late 2024, Los Cabos even launched its first direct flight to Europe, with flights from Frankfurt, Germany coming in twice weekly.) This improved air connectivity means a larger pool of potential buyers and renters can reach Cabo with ease. More flights and more airlines also typically result in better fares and more tourism, which fuels the rental market and demand for accommodations. The airport itself has expanded capacity, with modernized terminals to handle the growing passenger volume. Not to be outdone, the private aviation facilities in Cabo San Lucas have also grown, catering to high-end travelers flying in on private jets. For real estate investors, this connectivity translates to confidence that Los Cabos will continue drawing international interest and remain a top-tier destination.
Roads & Infrastructure Improvements: Within Los Cabos, getting around and accessing surrounding areas has greatly improved due to new roads and highways. The highway corridor between Cabo San Lucas and San José del Cabo is modern and well-maintained, making the commute between the two towns roughly 30 minutes and very convenient for residents. There’s also a toll bypass road that lets you go from the airport to Cabo San Lucas quickly, avoiding traffic through the cities. Recent years saw highway improvements northward to La Paz and Todos Santos, reducing travel times and making weekend trips or dual-city living more feasible. In local neighborhoods, municipal governments have been investing in better roads, lighting, and public services to keep up with development. Infrastructure projects like new desalination plants (to increase water supply), upgraded power grids, and expanded medical facilities (including new hospitals and clinics) are all underway to support the growing population. For investors, these improvements mean previously “remote” areas are more accessible than ever – turning once sleepy beach towns into the next hotspots. When you buy in an area with upcoming infrastructure plans, you often benefit from appreciation as connectivity and utilities reach that locale. In sum, Los Cabos’ trajectory of development – from internet to transportation – is enhancing its real estate appeal and long-term sustainability.
Shoutout to Last Rock Real Estate & Brevitas Listings
When navigating the Los Cabos real estate scene, having the right partners makes all the difference. One highly-regarded local brokerage is Last Rock Real Estate, known for its expertise in the Baja California Sur market. Last Rock’s team specializes in the Los Cabos area and offers white-glove service to international buyers. Whether you’re seeking a condo in San José or a sprawling beachfront estate, working with seasoned agents like those at Last Rock can provide invaluable insider knowledge – from understanding neighborhood nuances to negotiating the best price. They also feature some spectacular exclusive listings and can guide you through the purchase process step by step. (Shoutout to their commitment to client success – they boast a 93%+ closure rate, reflecting their ability to get deals done smoothly.) It’s always wise to engage a reputable agency, and Last Rock Real Estate is a great example of a firm that will “anchor” you throughout your Los Cabos property journey.
International real estate platforms are also shining a spotlight on Los Cabos. For instance, Brevitas – a global marketplace for commercial and luxury real estate – has numerous active listings in Los Cabos that showcase the diversity of opportunities. Browsing Brevitas, you can find everything from a single-level modern home in Quivira (Cabo San Lucas) listed around $3.9M, to a penthouse condo in Cabo Bello with panoramic golf course views, to multi-million dollar development lands. Brevitas also connects you with active brokers on the ground in Baja. For example, Zulma Ramirez of Baja Bay Realty is a Brevitas member broker who has over 15 years of experience covering Los Cabos, Todos Santos, and La Paz – leveraging such platforms can link you to professionals like her who are deeply familiar with the market. Exploring online listings on Brevitas gives you a taste of what’s available: you’ll see high-end resort residences, boutique hotel properties for sale, and investment plots ripe for development. It’s an excellent resource to complement working with local agents, ensuring you don’t miss out on any opportunity.
How to Get Started: Steps for Buying Property in Los Cabos
- Engage a Trusted Real Estate Agent and Attorney: Start by finding a reputable local real estate agent (many speak English and specialize in foreign buyers) and a real estate attorney or closing coordinator. Your agent will help you identify properties that meet your criteria and provide market insights, while your attorney will ensure the legal process is handled correctly. In Los Cabos, the real estate industry is fairly well-organized (look for agents who are members of AMPI, the Mexican real estate association). A good agent will guide you on neighborhoods, fair pricing, and making an offer, and a legal expert will review contracts, set up the fideicomiso or corporation, and coordinate with the notary (Notario) who formalizes the sale.
- Secure Financing or Funds: Determine how you will finance the purchase. Many buyers pay cash for Mexico real estate, often by tapping home equity or savings from their home country. Local financing for foreigners was once rare, but by 2025 there are more options – a few Mexican banks and international lenders offer mortgages to foreign buyers in Los Cabos, and some developers offer financing plans for new construction. If you plan to get a loan, get pre-qualified so you know your budget. Otherwise, prepare to transfer funds for an escrow deposit (usually 5-10% of purchase price) when you find the right property. Keep in mind, doing international wire transfers can take time and you may need to coordinate with a U.S. escrow service or Mexican bank trust account as applicable.
- Find the Right Property and Make an Offer: House-hunting in Cabo is the fun part – visit properties with your agent, explore different communities, and once you find “the one,” you’ll submit an offer in writing. Offers in Mexico are often made via a Letter of Intent or an offer to purchase contract, outlining the price, terms, and any contingencies (like an inspection or due diligence period). Be prepared to negotiate; in 2025 the market in Los Cabos is active but there may be some room between list and sale price depending on the property. Once you and the seller agree on terms, a formal Purchase/Sale Agreement is signed and a deposit is paid (typically into escrow or a trust account). This effectively takes the property off the market and kicks off the closing process.
- Due Diligence and Setting Up the Trust/Corporation: After signing the contract, there is usually a 30-60 day closing period. During this time, your attorney and Notario will do due diligence: verifying the title is clear, checking for liens, reviewing permits (especially if you’re buying land or a home that was recently built), and ensuring all paperwork is in order. If you’re buying through a fideicomiso (trust), the bank will be engaged to set up or transfer the trust to your name (or a new trust if you’re the first foreign owner). If you’re using a corporation, it will be formed and ready to hold the property. You might also conduct inspections or appraisals during this time as needed. It’s crucial to have an expert review the property’s escritura (deed) and any condo bylaws or HOA rules in case of condos. Once due diligence checks out, you move to closing.
- Closing and Title Transfer: Closing in Mexico is formalized in the office of a Notario Público, a specialized attorney who has authority to register property transactions. On closing day, you (or your Power of Attorney if you cannot attend) and the seller will sign the deed transfer paperwork. The Notario will incorporate the fideicomiso bank trust details or the corporate ownership into the deed. You’ll pay the remaining balance of the purchase price, plus closing costs and taxes. Closing costs for buyers in Los Cabos typically include a transfer tax (around 2% of the purchase price), Notario fees, trust setup fees (if applicable), and other administrative costs – usually totaling between 4-7% of the price. Once signed and funds disbursed, the Notario will record the new deed with the Public Registry. Congratulations – you’re now the owner of a piece of paradise! It’s advisable to keep all your closing documents, and you’ll receive either a trust certificate or corporate shares along with the recorded deed as proof of ownership.
By following these steps with the help of professionals, buying property in Los Cabos can be a smooth and rewarding process. Many foreigners are surprised at how straightforward it actually is – and once you have the keys, you can begin enjoying your Cabo home or investment right away.
Conclusion: Los Cabos – A Top Real Estate Market in 2025
From its sun-kissed beaches and world-class golf courses to its modern infrastructure and pro-investment policies, Los Cabos stands out as one of the best real estate markets in 2025. The region offers a rare combination of lifestyle and investment benefits: you can bask in a vacation-like atmosphere every day and still enjoy strong property value appreciation and rental income potential. Los Cabos continues to evolve with new developments, better connectivity (both digital and physical), and a burgeoning community of international residents. This momentum suggests that property buyers today stand to benefit for years to come as the area grows. Whether you’re looking for a retirement haven, a remote work base, or simply a smart addition to your real estate portfolio, Los Cabos is a prime candidate. As always, do your homework, leverage local expertise like Last Rock Real Estate or the listings on Brevitas, and take the plunge wisely. You might soon find yourself watching whales breaching from your patio or earning income from a high-demand rental – all while being part of the exciting Cabo success story. Bienvenido a Los Cabos, and happy house hunting!
