Commercial Real Estate in Los Cabos, Mexico
A strong U.S. dollar, a robust housing market, and easy living are just a few of the attractions for foreign investors.
Cabo Life Real Estate can help you find any type of commercial property, including office space, multi-family homes, and industrial, retail, and hospitality realty. Our small team of seasoned realtors has resided and owned property in Cabo for more than a decade. We know the local market, our communities, and what it takes to sell and buy property in accordance with Mexico’s laws and regulations.
Our agents are skilled negotiators with deep local knowledge that will prove invaluable during realty transactions, and we know how to close deals. In just a few months, you can own commercial property in Mexico. And you don’t even need to be a citizen.
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Why Invest in Commercial Real Estate in Los Cabos?
In addition to good real estate prices, natural beauty, proximity to the United States, and development growth in one of the safest municipalities in Baja California Sur, there’s the following to consider:
Strength of U.S. Dollar in Mexico
Both U.S. and Canadian dollars are strong in terms of the Mexican peso, which means that foreign investors can grab some great bargains. Compared to some other popular vacation destinations, Mexico offers some very attractive values, from the cost of real estate to the cost of living. By early 2021, the exchange rate was one U.S. dollar to about 21 pesos.
Robust Housing Market
Despite Mexico’s weakened economy made even weaker by the pandemic, the country’s housing market is robust. According to the Sociedad Hipotecaria Federal, the nationwide house price index rose 5.8 percent during the second quarter of 2020. During the latest quarter, house prices rose by 1.2 percent. Since the Mexican housing market is currently healthy — and tightly regulated by the government, allowing no room for speculation — house prices are expected to keep rising.
Rising Foreign Demand
Given the strong U.S. dollar, low oil prices, and natural beauty of the area, it’s no wonder that American real estate buyers have been flocking to Los Cabos. The U.S. State Department estimates that about 1.5 million Americans are living in the country.
A Great Way for Low-Cash Investors to Get Started
What’s great about investing in real estate in Mexico is that you can do it on your own terms and at your own pace. Mortgage payments can last up to 30 years, and you can adjust your monthly payments according to your ability to cover them. Down payment rates, the payment schedule, and the number of monthly payments can all be adjusted. You can also pay up front if you are in a position to cover the debt quickly.
Not only is Los Cabos real estate less expensive than comparable properties in the United States, it’s also less expensive to maintain property in Cabo. And considering all that Los Cabos has to offer , you will benefit from a consistent rental calendar while enjoying low annual costs.
Easy Access and Modern Infrastructure
Los Cabos has undergone remarkable growth with new construction and the arrival of businesses. Although the area’s small seaside town charm remains, you’ll also find some major U.S. chains like Walmart, Home Depot, Toyota, Mercedes, and others. More than a dozen airlines provide direct flights from many major U.S. cities to the Los Cabos International Airport (SJD), and the scenic 1,059-mile drive along the Baja Peninsula leads from Los Cabos to the U.S.-Mexico border in Tijuana.
Most communities in and around Los Cabos have tight security, and you will have access to legal services, modern medical facilities, high-speed Internet, well-maintained highways, international schools, the arts and music scenes, nightlife, and many recreational activities. Local malls have major brand-name retail outlets, artisan markets, and world-class dining at various prices.
Bilingual areas tend to attract more business investments, which results in faster economic growth. And that’s what Los Cabos offers you, even if you don’t speak a word of Spanish. Mexico has a huge expatriate population, with millions of U.S. visitors coming back year after year. In Los Cabos, most locals speak English, from tour guides and taxi drivers to retail workers and restaurant workers. You can also easily find English-speaking lawyers, doctors, and dentists. Los Cabos is a tapestry of international flavors.
Rising Return on Investment
When you invest in real estate in Mexico, your return on investment (ROI) can be very attractive. The ROI is calculated based on the conditions of purchase, the capital gains, and the income the property brings after you have bought it. The ROI is also tied to the amount of time it takes to recoup a percentage of the investment. We can help you calculate it. But the ROI is basically the number you get when you divide the down payment on the property by the monthly net profit generated by its use.
Capital gains are another important factor to consider when you invest in real estate in Mexico. The capital gain is the value that your property acquires over time. It depends on location, the local economy and real estate market, and the prices of comparable properties in the area, as well as the condition of your property and the cost of maintaining it.
Frequently Asked Questions About Buying Commercial Property in Cabo
Here are some of the questions we are often asked about purchasing commercial real estate in Los Cabos.
Foreign investors can own property outside the restricted zone if they obtain a permit from the Ministry of Foreign Affairs. The restricted zone in Baja California includes Los Cabos and extends 60 miles from the national border and 30 miles from the coastline. To buy property within the restricted zone, foreign investors must secure a trust called a fideicomiso that is renewable every 50 years. A Mexican bank of your choice will act as a trustee, and the buyer will be the beneficiary with the right to use and sell the property. Mexican companies that are wholly owned by foreign buyers can also buy nonresidential properties located within the restricted zone.
Yes. Although there is no specific guarantee of title from the state, title insurance is available to both buyers and lenders. Mexican title insurance companies are regulated under the Insurance Companies Law, and their clients are mostly U.S. companies and their Mexican subsidiaries.
These warranties usually include a warranty of title to the property; that ownership is legitimate; that there are no liens, ownership reserves, limitation, or claims affecting the property; that there are no tax arrears or environmental liabilities; that zoning is adequate; and, when applicable, that there is no agrarian background.
Ready to invest in commercial real estate in Cabo? Contact our realtors to discuss your investment goals and get the process started.