In 2014, the sale of vacation homes rose by 57% in the US. Over 1 million vacation properties were sold on that year alone.
One of the most popular tourist destinations for vacation rentals in the world, Los Cabos is an excellent spot to purchase a second home. With options for beach bums and alternatives alike, there’s something for everyone in Los Cabos.
If you’re thinking of purchasing a home in Los Cabos, you need The Ultimate Los Cabos Homebuyer Guide. This will help you navigate the waters of purchasing a home in another country. It will tell you what you need to keep in mind when buying your next home.
Keep reading for everything you need to know before buying a home in Los Cabos.
Los Cabos Homebuyer Guide
If you live in a cold climate or you’re one that experiences all four seasons, the thought of escaping during low temperatures is tempting. Buying a vacation home in Los Cabos can offer you the summer getaway all year round.
Some people choose to retire in Los Cabos while others see purchasing a home here as a great investment. Not only does it give them their escape from winter, but it also provides rental income when they’re not occupying it.
Los Cabos offers villas in gated communities, waterfront condominiums, and vacation homes of all shapes, sizes, and budgets. In a city with crystal clear waters and golden beaches, the beach bum can spend hours soaking up in the rays. For those with a more active lifestyle, Los Cabos also offers kayaking, diving, horseback riding, surfing, and golfing.
Homes in Los Cabos are available at any budget. Whether you’re looking for simplicity or luxury, there are multiple homes to match your preferences.
In the following Los Cabos homebuyer guide, we’ll list a few things you should know before making your purchase.
Ease of Purchasing in Mexico
If the thought of purchasing a home in another country scares you, it shouldn’t. While buying a home in Mexico seems complicated, it’s actually quite a simple process.
Buying a home in Mexico involves a number of parties, and these include:
- The buyer (or the legal representative of the buyer)
- The seller (or the legal representative of the seller)
- The real estate agent or company
- The closing agent
- The escrow agent
- The notary public
Also involved in the process is the bank, appraisers, land offices, and public registry offices. When purchasing a home, the process is as follows:
- Making an offer
- Deciding on a contract
- Third Party escrow
- Fideicomiso (the bank trust)
The bank trust/fideicomiso is an important element of purchasing a home in Mexico. This law allows foreigners to buy a property in restricted areas in Mexico.
Any land within 50 km of either coast or 100 km of the border is considered restricted land. The fideicomiso is not a lease, right to use, or concession. Instead, you become the beneficiary of a trust that’s valid for 50 years.
With this law, people have been buying homes in Mexico for decades. They own their property legally under Mexican law.
Choosing a Location
If the purpose of purchasing a second home is to rent it out when it’s not in use, you need to choose the right location. Rental income is a big benefit of owning a vacation property. But to realize the full advantages, you need to choose a spot that has a long high season.
As an example, purchasing a vacation home on a ski hill only gives you the ability to rent your home during a certain season. By contrast, purchasing in Los Cabos gives you a year-round rental opportunity.
The winter is considered the high season in Los Cabos. But with excellent golf, fishing, and high temperatures year-round, demand for rental properties will always be present.
It means that deciding where to buy in Los Cabos comes down to what activities you plan on doing and what you want to give your guests an access to. If your primary joy is fishing and sunbathing on the beach, you’ll look in areas that offer access to that.
Affording Your Home
You don’t have to be rich to afford a vacation home. The median household income for those who purchased a vacation home in 2016 was only $89,900.
What’s more, you can offset the cost of your purchase by renting out your home. Finding renters for the times you aren’t using your vacation property provides a significant supplemental income. This can be used to help pay your mortgage.
It’s also a great time to purchase a second home as the markets tips toward a buyers market. You can take advantage of the low housing costs and interest rates by making a purchase now.
Purchasing a Fixer-Upper
It’s entirely possible to purchase a vacation home on a budget. Consider buying a fixer-upper to fit your budget. This allows you to save money and create your dream home from the bottom up.
Choosing a Real Estate Agent
Making a home purchase is a huge decision. You want to be sure you have the right real estate agent on your side.
Research about the real estate agent that you’re working with and make sure their credentials are in good standing. You’ll want to be sure the agent is a member of the Los Cabos MLS. That means they have at least five years of experience selling real estate in Mexico.
Paying Property Taxes
A committee consisting of local government, civil association, appraisers, architects, and developers will determine the value of your property. Their assessment includes the size, zone, and type of property it is.
When you purchase a home in Los Cabos, you’re responsible for paying property taxes. You pay the same amount of taxes as the seller did.
You can update the official value through the committee and municipal authority. Updates should be made as you build, remodel, and renovate.
Real Estate Services in Los Cabos
Now that you’re armed with the knowledge of The Ultimate Los Cabos Homebuyer Guide, you’re ready to start searching for your dream home. Whether you’re an avid adventurer or you prefer relaxing on the beach, Los Cabos has a property for you. And the process of buying in Mexico isn’t as complicated as you may have thought.
For more information on buying in Los Cabos, contact us.