Allow me to explain the answer based on my (close to 30 years of) full time residency here. Those of us whom purchased properties back in the late 80’s, early 90’s, we wish would have purchased more! Although there have been some normal market adjustments over the years and the economic drop in 2008, depending on when you bought and where, we are all looking pretty good. What has changed the most over the years are the popularity, quantity and quality of beautiful, gated residential developments. These were few and far between 30 years ago, however now you have a spectacular supply of options from the $100K’s to well into the millions. From beachfront to the wonderful outer area (boonies) on the East Cape. There is literally something for everyone!
WHY NOW? Well, if you have seen the Corridor or Pacific Side lately from the Ocean you would be quite impressed with the amount of investment and building currently taking place. These multinational investors all have one very important thing in common; they only take calculated risks. Do they know something we don’t, maybe? What we do know is that Mexico and specifically Los Cabos is booming these days. More hotel rooms and flights - mean more visitors. And more visitors mean more real estate sales. More sales means values will increase. Now is the time to buy while it is still a buyer’s market. This will change.
Can I rent my place if I am a part time resident? Most buyers buy with the intention of full or part time residency here in Los Cabos. Other buyers strictly invest with no intentions of residing in the property. Rental properties are either vacation rentals which you can control for personal use, usually advertised on a web site like VRBO; or they are long term 6‐12 month leases. Either way, taxes are due on that income received by the owner. Regardless of the price of your Condo or Home, if it is priced to rent correctly, you can find a qualified tenant. Right now we have a deficit of rental properties available for qualified tenants. For this reason alone, investing in Los Cabos now can earn you income immediately. But, be sure to find a good property manager and be sure to pay your taxes.
How do I get my foot in the door as a property owner? Currently our local MLS has over 400 members and close to 100 brokerages in Baja Sur. Best way to find your real estate agent or property manager is on the internet or from a referral from a friend who has done business here. You can be sure they will have an opinion of their agent. Long before most buyers even arrive to Los Cabos they have searched high and low on the web, began dialogue with an agent and know what properties they will view before they arrive. This is by far the most efficient use of your time if you are looking to buy while on vacation. This also allows you to view dozens of properties in advance of arriving, from the comfort of your home. If you do your homework you will be glad you did. But always use an MLS BCS agent!
Are all purchases cash deals or is financing available? The vast majority of property purchases in Los Cabos are cash. The cash can be obtained sometimes from a line of credit from the USA or Canada, as lenders from those countries will not allow foreign properties to be held as collateral. Currently we have a few existing Banks and Mortgage Brokers that lend in pesos with a large % as a down payment and some interest rates above double digits. However, for 2017 there is a new Mortgage Lender coming on line here that will be much more flexible with rates and qualifications, you can contact me for details of this Lender. Another option becoming more and more common is seller financing. Historically it is easier to qualify with a seller than with a Bank or Mortgage Broker, the down payment can sometimes be less and the terms are normally more attractive. This is because title is usually held in the name of the seller until final payment.
Do I actually own my property I just bought in Mexico? This is a very common misconception; most all foreigners who own property here use what we call a fideicomiso or in English a Mexican Bank Trust. This mechanism is tried and true since 1973 and there is a very long story on how it came about, but be aware this is in the Mexican Constitution! To you this means that a chosen National Bank will hold your title for you, for a fee of around $500 per year. The newer trusts are valid for 50 years and renewable, you also have all of the rights to rent, will, sell, build on or sub‐divide in some cases your property. Mexican citizens and or Mexican corporations can forego this Bank Trust and hold the title with no more or less rights than a foreigner, minus the yearly bank fee.
Terry Gray Curtis is a veteran Century 21 Paradise Properties agent and Property Manager, he operates www.caboresortproperties.com & www.cabosecrets.com & a blog at http://blog.caboresortproperties.com Drop him a note to receive his very informative, bi‐weekly Newsletter. His e‐marketing program can give you incredible exposure if you are a Seller. Terry can be reached at firstname.lastname@example.org or USA Tel 310.272.9500 Mex Cel (011‐521) 624.151.5530