For many individuals, owning property is a big life achievement. For other property owners and real estate investors, owning property in other areas of the world is yet another investment or retirement goal.
Especially as the housing market in North America continues to see price increases and inflation boosts the cost of living, many people are looking elsewhere for home ownership. One of the popular destinations for these real estate properties lies in Mexico.
Recently, home buyers and investors have seen the opportunities that lie in foreign countries, particularly Cabo San Lucas in Mexico. If this is something you are looking at doing in the next few years, here are three benefits of purchasing property in Los Cabos.
One of the most attractive reasons for purchasing property in other countries is the affordable home prices. In Cabo San Lucas, the average two-bedroom, two-bathroom sits at about $250,00. For a place closer to the ocean, you'll find a single-family home for around $400,000. If a luxury condo in a gated community sounds more up your alley, you'll likely have to spend a few million dollars.
This is extremely different from the housing market in Canada where the average price of homes sold in 2022 was over $600,000 and in Ontario where the average price of a two-bedroom home can cost over $800,000 depending on the location and other amenities. If you're hoping for a Toronto condo, the average price on the market is sitting at just over $650,000. As well, in California, condos near the ocean will also cost you a few million to own.
The affordability of properties in Mexico is just one of the benefits of investing in Cabo San Lucas.
Canadian winters can be extremely harsh and cold. If you're sick of the cold and are looking for a vacation home somewhere warm and sunny, Mexico might be the place for you.
In January, the average high temperature sits at around 27 degrees Celsius and a low of 16 degrees. This is much warmer than the below 0 temperatures that plague Ontario in the winter.
Cabo San Lucas is also known for its natural beauty that makes it feel like paradise on earth. With beautiful sandy beaches just a walking distance away, you'll feel like you're on vacation every day you're there.
As well, you're close enough to other popular destinations and just a quick flight away from California and Texas.
Another great benefit of purchasing property in Cabo San Lucas is the investment opportunity that comes with it. Not only is land ownership a safe investment because of the paradise living and high tourism industry, but it is also an opportunity to make rental income.
If you buy property in Mexico and don't plan on living there full time, you can always lease out the house and make some income off the rent.
As an owner, you will be responsible for finding tenants, abiding by any tenant or land laws, and managing the maintenance. But, if you're hoping to make some money while also enjoying the lifestyle in the Los Cabos area, renting is a great opportunity.
You may also decide to sell the property down the road. If you decide to do so, you may be looking at making a decent profit as the house value in Cabo San Lucas increases.
While there are benefits to owning Los Cabos real estate, there are also some mistakes that you should avoid before you purchase properties in another country like Mexico.
With any investment, it's important to do research and pay attention to any trends or news items that could affect its value. When you purchase property in another city, you will have to understand that specific region before finalizing the deal.
The short answer is to refrain from moving too quickly. Take your time to fully understand the pros and cons of the houses and developments you are hoping to invest in.
You should also understand and define the type of lifestyle you want to have when purchasing Cabo real estate. Are you planning on renting out the property when you're not there? Do you want to be by the ocean? What interests and hobbies would you hope to pursue? How often could you travel down to your vacation home?
Defining your goals when you buy property in Cabo San Lucas will help you avoid mistakes along the way.
One of the best strategies you can employ to avoid mistakes is using a real estate agent. Real estate professionals can help you find properties or villas that match your budget and criteria. As well, local agents can offer insight into the community and lifestyle that a specific neighbourhood offers.
Depending on the availability, you may work with an agent in the city you are hoping to move to, or you could work with a local agent who specializes in out-of-country homes or investment properties.
Finally, as with any move, you need to understand the legal implications of buying property in Cabo San Lucas. While you are protected under Mexican law as a foreign buyer, you need to abide by zoning laws that may restrict some areas. As well, Mexican law prevents citizens from other countries from purchasing land within 100 kilometres of the land borders. This is the same law that prevents citizens from buying land within 50km of the ocean borders. There is also a restricted zone in Cabo San Lucas called Baja California Sur where you are not allowed to purchase a property.
Another thing to keep in mind is whether you require a temporary resident visa when you visit Mexico.
Understanding the different foreign laws that the Mexican government has set in place will help you avoid legal troubles and make the process of purchasing property in Cabo San Lucas that much smoother.
Cabo San Lucas and the surrounding Los Cabos area in Mexico can be a great area full of investment properties. There are many different benefits of owning a home in Mexico including the affordable prices, lifestyle, and investment opportunities. However, it's important to plan ahead and work with professionals in order to avoid making mistakes.
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