The Q&A, Real Estate – LCM 46 Spring 2017

The Q&A

Everything you never knew you needed to know about
Los Cabos real estate
By Carol S. Billups

The Q&A, Real Estate - LCM 46 Spring 2017As a realtor here in Los Cabos, I’m frequently answering questions, and that’s a very good thing. Before you can make an intelligent and safe decision about buying a property in México—or anywhere, for that matter—you need to educate yourself about the differences in real estate laws and practices.

Here are answers to some of the most frequent questions my colleagues and I hear.

Can I own property in Los Cabos?
Because Los Cabos is within 50 kilometers of the ocean, it falls within what is called the “restricted zone.” This means that as a foreigner, you can own property but that the title must be held in trust by a Mexican bank. The permission to open the trust is granted by the Mexican congress and guarantees the foreigner all the rights, privileges, and benefits of a Mexican citizen as pertain to the property. In return, you promise you will respect México as a sovereign state and obey its laws regarding the property. It is a very safe way to hold title, and it has some very important estate-planning advantages. There are costs involved, both in setting up the trust as well an annual fee of about $500 U.S. that must be paid to the bank holding the trust.

What are the costs?

In addition to creating the trust, there is a 2 percent federal acquisition tax. The transaction is presided over by a notario público (a government-appointed attorney very much like a magistrate). It is customary to be represented by your own real estate lawyer, and there are various appraisals and certificates of no liens to be obtained through the municipal government. The third-party escrow company also charges a fee for its services. For an average property, the buyer’s closing costs will total about 5 to 7 percent of the purchase price. For very small transactions, the percentage will be higher, and for high-end properties the fees will be less. The closing costs are paid in cash, usually one half when your offer is accepted and the balance at closing. Your real estate agent can provide you with an estimated closing cost statement.

Can I rent out my condo when I’m not in Cabo? Who takes care of that?

Your trust will specify whether you may participate in the lucrative vacation rental business; some specifically forbid short-term rentals. If this activity is not specifically forbidden, you may rent your house or condo out. Many people find this is an excellent way to offset maintenance costs. And it may even have certain tax advantages in your home country. Some homeowners associations have rental programs in place, and there are a number of companies that will market your house or condo to vacationers. These programs offer ultimate convenience: You simply tell them when your property will be available, and they do the rest. They charge a portion of the rental income for this service. You might also elect to market the property yourself using online services such as FlipKey.

How do I pay bills or get work done on my home?

Most part-time residents rely on a property manager or person responsible for the home. With some properties, this service is included in the owner’s dues. But for most, you will need to make your own arrangements. The property manager will pay the bills, and inspect the home periodically to be sure all the systems are functioning properly. If he finds any problems, he will have personnel who will make the repairs. Property managers can provide maid services and, in some circumstances, will pre-stock your kitchen and pantry. If you are renting your property, the property manager may provide a “meet-and-greet” service to pass the key to your renters and even act as a concierge during their stay. Of course, the greater the offering of services, the higher the monthly cost. A good property manager can make owning a home in Los Cabos completely effortless.

What about telephones, internet, and TV?

If you have a property manager, he will help you establish an account for phone and internet. The most common internet provider is TelMex, which is also the landline provider. Many packages of phone plus internet are available at reasonable fees. Much of Los Cabos is on high-speed fiber-optic service but not all areas. If you plan to work from your Los Cabos home via internet, be sure to check the type of internet service available prior to making an offer.

As for television?
Ahem. While not specifically legal, many people bring a receiver box from the United States (Dish TV) or Canada (Shaw). There is a thriving cottage industry of technicians who are adept at setting up the foreign boxes and providing the proper satellite dish. If you don’t have access to an account at home, some of the technicians have receivers as well. There is a local provider, SKY, however the majority of its programming is in Spanish and it generally does not have the same sports programs that American and Canadian viewers enjoy. Streaming services such as Netflix also work in México.
These are only a few of the topics you’ll want to explore when considering a purchase in Los Cabos, whether you’re planning to move here full time, have a vacation home, or purchasing an investment property.

Unlike the rest of México in Los Cabos, we have a U.S.-style multiple listing service that also regulates our real estate practice. Working with an MLS-member agent assures that you will have a safe investment with the proper procedures in place. And then you’ll only have that one last question: “Why didn’t I do this sooner?
Carol Billups is broker-owner of Cabo Realty Pros, a full-service real estate agency in Cabo San Lucas and has been helping clients find their dream properties in Cabo for more than 16 years. She can be reached through her website,, by email at, or via telephone at (624) 147-7541 or (760) 481-7694 from the United States or Canada.