With its year-round sunshine, luxury resorts, and beachfront lifestyle, Cabo San Lucas has become one of the most desirable destinations for second homes and investment properties in North America. However, while the idea of owning a home in paradise is appealing, the buying process in Mexico differs from what many international buyers are used to.
If you're exploring Cabo San Lucas real estate, it's important to understand how the market works—and how to approach it with confidence.
Why Cabo San Lucas?
Located at the southern tip of Mexico’s Baja California Peninsula, Cabo San Lucas offers a rare blend of natural beauty, modern amenities, and a laid-back lifestyle. The town is known for its dramatic desert-meets-ocean landscapes, world-class sportfishing, luxury marinas, and vibrant culinary scene. It also happens to be one of the most foreigner-friendly real estate markets in Mexico.
In recent years, Cabo has seen steady demand from U.S. and Canadian buyers seeking vacation homes, rental investments, or a retirement destination with warm weather and strong infrastructure. The region has a well-established network of international schools, private healthcare providers, and property management services, making it even more accessible for long-term stays or full-time living.
Can Foreigners Buy Property in Mexico?
Yes, foreigners can legally purchase property in Cabo San Lucas, including beachfront homes. However, because of Mexico’s constitutional restrictions on foreign ownership within the “restricted zone,” which includes all land within 50 kilometers of the coast and 100 kilometers of international borders, international buyers must use a specialized ownership structure to acquire property in these areas.
The most common and secure method is through a fideicomiso, or bank trust. Here’s how it works:
- A Mexican bank is designated as the trustee, holding legal title to the property on behalf of the foreign buyer.
- The foreign buyer becomes the beneficiary of the trust, with full rights to use, lease, improve, sell, or bequeath the property.
- The fideicomiso is valid for 50 years, is renewable, and can be transferred to heirs or another buyer.
Alternatively, foreign buyers—especially investors purchasing multiple or income-generating properties—may choose to establish a Mexican corporation, which can directly own property outside the fideicomiso structure. This approach involves different legal and tax considerations and should always be evaluated with local legal counsel.
While the fideicomiso structure may seem unfamiliar to first-time buyers, it’s a well-established, government-regulated system that thousands of foreigners use each year to purchase property safely in places like Cabo San Lucas.
What Types of Properties Are Available?
The Cabo San Lucas real estate market offers a wide variety of property types—from modern ocean-view condos and gated villas to hillside estates and beachfront residences.
Popular Options Include:
- Condominiums: Ideal for part-time residents or investors, many condos come with resort-style amenities, ocean views, and on-site property management.
- Gated Communities: Neighborhoods like Pedregal, Cabo Bello, and Hacienda Beach Club offer privacy, security, and luxury amenities within walking distance of downtown or the beach.
- Custom Homes and Villas: Whether you're looking for a modern architectural gem or a traditional Mexican-style retreat, Cabo has high-end inventory with expansive views and custom finishes.
- Investment Properties: With a robust vacation rental market, many buyers seek income-generating properties close to the marina, Medano Beach, or downtown nightlife.
With clear title options and strong rental demand, Cabo San Lucas is increasingly appealing to lifestyle buyers and investors alike.
Understanding Costs and Fees
Property values in Cabo vary widely depending on location, size, and proximity to the water. As of 2025, entry-level condos may start around $300,000 USD, while oceanfront homes in exclusive communities often exceed $2 million USD.
In addition to the purchase price, buyers should budget for:
- Closing costs: Typically 4–6% of the purchase price, which includes notary fees, trust setup, legal fees, and taxes.
- Annual fideicomiso fee: Roughly $500–$1,000 USD, depending on the bank.
- HOA or maintenance fees: Vary depending on the development or community.
- Property taxes: Significantly lower than in the U.S. or Canada, often less than 0.2% of assessed value annually.
How the Buying Process Works
Buying a home in Cabo San Lucas is a smooth and well-regulated process, especially when you’re working with local professionals who specialize in helping international buyers. While the steps differ slightly from those in the U.S. or Canada, the process is transparent and buyer-friendly. Here’s what you can expect from start to finish:
1. Partner with a Licensed Real Estate Agent
Start by selecting a reputable, licensed real estate agent who is active in the Cabo market and well-versed in working with foreign clients. Joe Taylor will help you find the right property and connect you with trusted attorneys, notaries, banks, and property managers.
2. Search for Properties That Match Your Goals
Your agent will present listings based on your criteria—whether that’s a vacation home, rental property, or full-time residence. During this phase, you’ll review details like HOA fees, property taxes, potential rental income, and any community rules. If you're buying in a gated community or condo development, understanding management quality and long-term maintenance is critical.
3. Make an Offer and Sign the Sales Agreement
Once you’ve found the right property, your agent will help you submit a formal offer. After negotiation, you’ll sign a promissory agreement (Contrato de Promesa de Compraventa), which outlines the terms and conditions of the sale. A deposit—usually 5% to 10% of the purchase price—is placed in escrow to secure the property.
4. Set Up the Fideicomiso or Mexican Corporation
For properties within the restricted zone (which includes all of Cabo), foreign buyers must purchase through a fideicomiso (bank trust) or, in some cases, a Mexican corporation. Your attorney will coordinate with a Mexican bank to establish the trust, which grants you full ownership rights and is renewable every 50 years. If you’re purchasing a commercial or income-producing property, forming a Mexican corporation may be a better fit.
5. Legal Review and Due Diligence
This is a critical stage. Your attorney and notario (a specialized legal official who oversees real estate transactions in Mexico) will conduct title searches, confirm property boundaries, review construction permits, and ensure there are no liens or encumbrances on the property. They’ll also ensure that the seller has a clear title and the legal authority to sell.
6. Final Closing and Title Transfer
Once due diligence is complete and your fideicomiso (or corporation) is in place, the final purchase agreement is signed at the notary’s office. Closing costs and the remaining purchase balance are paid at this time. After all documents are executed and recorded, you’ll receive a notarized deed, and ownership is officially transferred. At this point, you receive your keys and can take possession of the property.
How Long Does It Take?
The full process typically takes 45 to 60 days, depending on the property and how quickly the trust setup or due diligence is completed. For cash buyers purchasing resale properties, the process may be on the shorter end of that range. For new developments or more complex ownership situations, it can take longer.
Throughout, having an agent and attorney who understand the nuances of Cabo San Lucas real estate ensures the transaction stays on track and fully compliant with local regulations.
Ready to Explore Homes for Sale in Cabo San Lucas?
Buying a home in Cabo is an exciting step, but it requires local knowledge and trusted guidance. Whether you're seeking a vacation retreat, a rental investment, or a full-time residence, Joe Taylor is here to help you navigate the process from start to finish. With deep expertise in Cabo San Lucas real estate, Joe can help you find the right property, structure the deal, and settle into your new home in paradise with confidence.
