Is it safe to buy real estate in Cabo San Lucas?

Buying real estate in Cabo San Lucas is one of the safest and most profitable investments in Mexico, especially if you follow the proper steps and have the support of experienced professionals. Foreigners can purchase properties through a bank trust (fideicomiso), which grants them full rights to the property. As Warren Buffett famously said, "Risk comes from not knowing what you're doing," so being well-informed is key to making a secure purchase.

How many foreigners live in Los Cabos?

Los Cabos, which includes Cabo San Lucas and San José del Cabo, has seen a significant increase in its foreign population. It is estimated that more than 15,000 foreigners now reside in the region, primarily from the United States and Canada. The international community has grown due to the high quality of life, pleasant climate, and abundant real estate investment opportunities.

What is the average value of properties in Los Cabos?

Property prices in Los Cabos vary depending on location and property type. The average property value is around $500,000 USD, but you can also find two-bedroom condos starting at $200,000 USD. At the high end of the market, luxury properties can reach up to $50 million, offering exclusive amenities like ocean views, private pools, and beachfront access.

How much does the bank trust (fideicomiso) for my property cost?

The bank trust (fideicomiso) is the legal mechanism that allows foreigners to buy properties in restricted areas of Mexico, such as Los Cabos. Establishing a fideicomiso can cost between $2,000 and $4,000 USD, with an annual maintenance fee ranging from $500 to $1,000 USD. This trust grants you full rights to the property, including the right to sell or transfer it to your heirs.

Closing costs for foreigners

When purchasing a property in Los Cabos, foreigners should consider closing costs, which are approximately 7% of the property’s value. For example, if you purchase a property for $1,000,000 USD, the closing costs would be around $70,000 USD. These fees cover taxes, notary fees, and public registry charges.

Example purchase: Property worth $1,000,000 USD

Let’s imagine you purchase a luxury property in Cabo San Lucas for $1,000,000 USD. Here’s a breakdown of the associated costs:

• Property cost: $1,000,000 USD
• Bank trust (fideicomiso): $4,000 USD (approximate)
• Closing costs: $70,000 USD (7% of the property value)
• Annual trust maintenance: $1,000 USD

The total initial cost would be $1,075,000 USD, including the fideicomiso and closing costs.

Real estate buying process in Cabo San Lucas

The buying process in Cabo San Lucas is straightforward when you work with a trusted real estate agent. Here's a step-by-step guide:

1. Contact a real estate agent: All legally registered real estate agencies in Los Cabos share a common property inventory through platforms like FlexMLS, which allows buyers to quickly access the best available properties.

2. Properties at your fingertips: Answer a few key questions, and you’ll receive a full list of properties tailored to your needs, sent directly to your WhatsApp.

3. Visits and evaluation: Your agent will coordinate property visits based on your selections. It is always recommended to request a property inspection to ensure the physical condition is satisfactory before proceeding with the purchase.

4. Escrow account for deposits: Make sure that all deposits are made into an escrow account. This ensures your funds are secure until all the legal steps in the purchase process are completed.

5. Bank trust (fideicomiso): If you’re a foreigner, you’ll need to set up a fideicomiso to buy the property. This gives you full ownership rights, although the bank holds the title in trust.

6. Closing the purchase: Once everything is in order, the final step is signing the deed before a notary public, ensuring that the property is legally registered in your name.

Conclusion: Alex Sepúlveda and his team, your allies in Cabo San Lucas

Investing in real estate in Cabo San Lucas is a smart and secure decision, especially when supported by experienced professionals. Alex Sepúlveda and his team are known for their deep knowledge of the local market and their commitment to client success.

We always recommend making all deposits through an escrow account and requesting a property inspection before finalizing any purchase. With the help of Alex Sepúlveda and his team, you can ensure the buying process is safe, transparent, and successful. Contact them today to explore the best properties in Los Cabos.