5 Reasons to Invest in Los Cabos

One of my favorite things about real estate here in Los Cabos is that there is a good mix of buyers. Americans, Canadians, and Mexicans each represent large groups of owners and investors. Los Cabos remains an attractive destination for real estate investment for many reasons. If you are an investor tired of stock market turmoil, investing in a dollar denominated market like Los Cabos is a great idea. Below I will list my top 5 reasons to invest in the area.

1. Most of the properties bought or sold in Los Cabos are made in US dollars (USD). Additionally, most of the rental income in Los Cabos is also collected in dollars. Other USD-denominated markets in Mexico include Puerto Vallarta, San Miguel de Allende, Tulum, Playa del Carmen and Cancun. Los Cabos workers also enjoy some of the highest wages in Mexico and can afford to pay higher rents. The fact that rent in USD can be accepted along with higher wages makes owning rental properties in Los Cabos very compelling.

2. You can't beat the lifestyle in Los Cabos. It's sunny here 350 days a year and the outdoor activities are endless. Los Cabos is so unique that it will always be a high and mid-range vacation destination. Not only can you own an income-producing property in a growing real estate market, you can do it in paradise. This also gives the owner the ability to rent the property for income or live in it and enjoy the Baja California lifestyle.

3. Los Cabos has a strong and growing real estate market. It is also a less mature market than other areas of Mexico, as Los Cabos did not become a vacation destination until the last 10 to 15 years. For this reason, there is still a great opportunity for organic growth through strong demographics. The MLS system has been in operation for decades and accounts for the majority of real estate transactions in the area. In 2019, Cabo real estate sales grew 40% for every MLS issue. There is a growing demand for affordable rental options as the local population continues to grow. Buying real estate here offers the investor an opportunity not only to receive rental income,

4. Los Cabos airport continues to add direct flights, as well as having continuous year-over-year growth in flight traffic (before the coronavirus, Cabo was experiencing an 8% growth in flight traffic per year). Many people don't realize it, but it is much easier to get to Los Cabos than many cities in the United States. Flights from California and Texas account for nearly half of the traffic arriving at Los Cabos International Airport (SJD). The airport here is modern and has just undergone a $ 50 million expansion that was completed in late 2019 as the demand for flights here continues to rise.

5. If you are an accredited investor in the US looking to diversify out of the volatility of the stock market, owning a property in a USD denominated destination in Mexico like Los Cabos is a great idea. The reason I ended up in Los Cabos is because I came on an exploration trip with someone looking to shop in the area. This buyer had most of his wealth in the stock market and was seeking diversification away from Wall Street. This is quite common in Los Cabos and other vacation destinations within Mexico. That said, the majority of buyers here in Los Cabos are retirees looking to enjoy the perks of owning in paradise. Another group of buyers to watch out for are wealthy and wealthy Mexicans who shop in Los Cabos for assets in the USD.

The Coronavirus may have dampened momentum, but the Los Cabos real estate market is resilient and will continue to grow. Real estate still has a long way to go when you look at all the positives in the area. Also, I think Cabo is a much stronger market than other places in Mexico due to the factors mentioned above. Anyone with a long-term vision will do well as Cabo has been positioned to continue to flourish as a world-class destination.