How expensive is real estate in Los Cabos Mexico?

What does $1 million USD get you in Los Cabos? Cabo has proven to be a resilient market through 2020, and it shows no signs of slowing down anytime soon. For anyone looking to buy real estate in the area, I’ve narrowed it down to five options for you, ranging from luxury ocean-front houses to commercial real estate. Whether you are looking to spend $100,000 or $1,000,000 this article will give you a good idea of the market. For any US investors with money sitting on the sidelines, purchasing real estate in Mexico priced in USD makes for a very compelling investment option.

Let’s first start off with a mansion on the beach. There are many areas in Baja California Sur where you can buy beachfront property for less than a million dollars. But there are also several ocean-front subdivisions where a cool million won’t even get you through the front gates. But in Los Cabos, for $1 million you can buy a gorgeous ocean-front home, and there is a strong market here for this exact type of buyer and property. You must keep in mind there also is a market for houses selling for $5 million to $10 million. Ocean-front property can get crazy-high prices real quick, but there are definitely a lot of options in the $1 million range that will get you an incredible beach-front home in paradise.

Option number two would be buying condos for rental properties. This would be my preferred route, especially if you’re an investor. For $1 million, you could buy four really nice condos, depending on location. This is one of the markets I focus on; you could diversify within different developments, get rental yield, and there are many pre-construction options. You could even buy older units to renovate or look at cheaper condos. There are plenty of options for you to buy rental properties here in Cabo. You also have the option of renting these condos on a short term or long term basis.

For option number three, you could buy land. This game gets a little tricky because you get into permitting at both the local and federal levels, depending on the size of the project. You have a lot of options as far as available land in Los Cabos. A lot of the land that I have looked at for developing 20 to 40-unit properties can be overpriced if it is located next to a known development. So the first question you have to ask is, “Is this in an up-and-coming neighborhood or is this a location where there is already a lot of established developments?” If you buy in high-demand areas, you will be paying a premium. It tends to be overpriced and you have a lot more risk as well. Permitting can also be exhausting here in Cabo, as we have some of the strictest building codes in the country. The Federal MIA permit is the hardest to obtain from the Mexican government and can be a cumbersome process.

Fourth on the list, you could buy two nice houses as a buy-and-hold strategy. You could easily stretch this to three houses if you drop down to cheaper subdivisions. But I think you are entering a solid resale market if you get into the $500,000 level. You have many solid pre-construction options for this type of housing, which would increase the potential for an appreciation in price. You can also mix it up and buy two houses in different communities throughout Los Cabos for further diversification.

And finally, you have some solid options here for commercial properties. I think for $1 million dollars, you could buy a 10-unit multi-family apartment building. That would be a great option to take advantage of the long-term rental market. There is also value in renovating older apartment buildings and then renting out the units. You could also look at strip malls or retail stores that have been beaten up a bit after the drop in visitor traffic from coronavirus. If you are looking to invest in commercial real estate abroad, make sure you have competent people at your side who understand the market.

There you have five compelling options on what you would be able to do with $1 million for real estate investment in Los Cabos. I believe Cabo is a great market for purchasing real estate for rental income and diversification. For investors in the US that don’t want the headaches of stock market volatility, buying property in Los Cabos is a great idea. If you have any interest in buying real estate or investing in Los Cabos, please reach out to me.