Buying a Home in Cabo San Lucas
Many people are purchasing homes in popular vacation areas such as Cabo San Lucas, Mexico. The coronavirus pandemic has got people in the “live life to the fullest” mind frame. “Carpe diem,” meaning “seize the day,” is a popular saying nowadays. Homes in Cabo San Lucas are flying off the market as the influx of buyers are scooping them up.
Who are the Buyers?
More people are working remotely from home due to the pandemic. Children are attending school in online classrooms. People are thinking that they can work and their children can go to school from anywhere. So they are moving or living part of the year in places like Cabo San Lucas. The pandemic has got many people who were close to retirement, retiring early. These retirees are heading south to warm places where they can lead active lifestyles year-round. Investors are buying homes in Cabo San Lucas as well. They make great investment properties, as they are easy to rent as vacation homes.
The housing market in Cabo San Lucas was on pause in April of 2020. The market was slow everywhere at that time, as the world was told to “stay home” because of the coronavirus pandemic. In the second half of 2020, especially in the fourth quarter, buyers started coming out in droves in places such as Cabo San Lucas. At this time, the pandemic is a leading factor in the real estate market there. According to Cabo Real Estate Services, in the fourth quarter of 2020 real estate sales actually tripled over the last quarter of 2019.
How it Works
If you wish to purchase a home in Cabo San Lucas, you have to go through Fideicomiso. According to Coastal Properties of Cabo, Fideicomiso is a “renewable Mexican Property trust that covers lands that are 100 kilometers from the border or 50 kilometers from the coast.” Most of Cabo San Lucas is within this zone. A property owner actually becomes a beneficiary of the trust for 50 years, instead of holding legal title to the property. After 50 years, if you still want to hold the trust for the property, you just renew the trust permit.
Work With a Knowledgeable Real Estate Agent
If you are not familiar with real estate in Cabo San Lucas or the process involved in purchasing a property there, it’s imperative to hire a knowledgeable real estate agent. Your agent will help you find the best property that meets your wants and needs. He will help you negotiate the best price for the property. Your agent will put you in touch with the right real estate purchase-related professionals. He will also help facilitate your financing and the entire property transfer process.
How Property Taxes Work
Property taxes work a bit differently in Cabo San Lucas. When you purchase the property, you simply pay the same property taxes that the seller used to pay. If you make improvements to increase your home’s value, you can contact the municipal authority to update your home’s value. In turn, the update will affect the amount of taxes you pay at the end of that year.
Financing Your Home
It’s easiest to pay cash for your Cabo San Lucas home. If you plan on getting financing in Mexico, be prepared to pay high interest rates. The process is more involved and takes time. They use independent escrow companies in Mexico. These companies handle your finances during the transaction, whether you are paying cash or obtaining financing. Once the financing is in order, it will be time to sign the paperwork, or “close” on the home purchase. After all the paperwork is signed, a closing agent will transfer the agreed-upon sales price amount to the seller.
All in all, purchasing a property in Cabo San Lucas can be a positive, life-changing experience. The process may be a little different than purchasing a property in the United States. However, the end result is that you have a vacation-like property to live in and call your own. Imagine long walks on the beach, boating, and other water activities. Enjoy spectacular sunrises and sunsets. Have fun exploring the town, shopping, and enjoying the Mexican-culture food. Cabo San Lucas is also known for its vibrant nightlife. Be sure to visit Land’s End where you’ll find Lover’s Beach and The Arch of Cabo San Lucas.