Affordable Cabo, By Carol S. Billups, Los Cabos Magazine – Issue #13 – Summer 2007.
If you thumb through any real estate guide serving Baja, you will quickly discover that the area has become a world-class resort, complete with world-class housing, being sold at world-class prices. Has Los Cabos become an elite barrio catering only to the super-rich? The answer is no. Certainly we’ve got more than our share of high end and ultra high-end residences, but there is still plenty of Cabo left for the rest of us. You just need to know where to look. In this issue we’re going to show you where you can find a high-quality home at a very affordable price. Let’s take a look at some of the more interesting options, all with prices under $500,000 U.S.
High-end developments pride themselves on their menu of amenities: concierges, sports facilities, security and more. Although many of the more affordable communities skip everything but the most basic services, you can still find areas that offer some very pleasing amenities.
In San Jose del Cabo you can find all the elements of the good life and a spacious view condominium. The Alegranza condos offer superior construction, excellent views and amenities such as concierge and restaurants. These condominiums start at $400,000 U.S. and have excellent potential as a residence or vacation home to rent while you’re away. Plans for the resort include an on-site rental manager who will ensure your vacation home is both profitable and carefree.
Nearby, where the airport toll road meets Mexico Route 1, you’ll find work underway on the very large Club Campestre San Jose project. This is a significant undertaking by Grupo Questro, who also developed Cabo Real and Puerto Los Cabos. Located on 550 acres just west of downtown, Club Campestre is bringing country club living to San Jose del Cabo. The centerpiece of the resort community is an 18-hole Jack Nicklaus designed golf course, but shopping, restaurants and a beach club are also planned. Private schools, community centers and sports facilities are expected to make this new community a self-contained village for the residents. Home-sites are currently being offered, with town homes and condominiums to be offered shortly, within the six planned communities. At press time, prices on the available lots range from $275-400 U.S. dollars per square meter, or an average of about $165,000 U.S. for a one-eighth acre building site.
The Corridor, the area between San Jose del Cabo and Cabo San Lucas, is home to some of the most exclusive residential areas in the area. Luckily, it’s also home to some affordable high quality housing projects. These are on the ‘up’ side of the highway, where the view is often spectacular. These developments cater largely to Cabo’s burgeoning middle class, but have also become popular with snowbirds and vacationers looking for a more reasonable investment in Los Cabos.
Ventanas Residencial Los Cabos is under construction on over 18 acres of view property on the corridor. The master plan calls for community gardens, a clubhouse, as well as swimming pools. The larger floor plan units have optional private pools. Houses here start in the mid-$200,000 U.S. range for a three-bedroom, 1,400 square-foot home, which features marble floors, marble countertops and alderwood cabinetry. Four floor plans are offered and completed homes were being delivered this spring. Some of these homes offer excellent views of the ocean, and all offer an attention to detail frequently seen in higher priced developments.
High on the hills overlooking the Bay of San Lucas, La Vista Residences and Spa are under construction. The Grupo IBC, who built La Vista, offers both condominiums and freestanding villas. The 38 villas feature patios and roof-top palapas, upgraded finishes, and appliances. Located only a few miles from the center of Cabo San Lucas, this is a highly accessible location. The Villas, which start in the low $400,000s U.S., are offered in four floor plans with two and three bedrooms. The 96 condominiums also are provided with either two or three bedroom options, as well as a penthouse unit with three bedrooms, three baths and view terraces. The condominiums are priced starting from around $300,000 U.S. The project will be gated and provide 24 hour security upon completion.
Also on the Cabo side of the corridor, you’ll find the very affordable La Cima project, where you can find a two bedroom, 1,000 square-foot home for prices starting at $149,000 U.S. The 80 Santa Fe-styled residences all have spectacular views from the roof-top terrace and assigned parking. The homes are arranged in forty house clusters; with each cluster surrounding a swimming pool and social area. Underground utilities and 24 hour security are also provided in this nearly-completed project. Two floor plans (Arena and Mar) are offered, and either can be purchased with bedrooms on the first or second story, creating four options to choose from. U.S. financing is available for homes in all of the subdivisions included in the article. In the case of La Cima, this means that you can own your own arch view home for only $30,000 down and monthly payments of about $900. Now THAT’s affordable!
Just down the street, the same developer, Los Cabos Patrimonio, is completing the last 32 homes in Las Villas del Tezal. Slightly larger than the La Cima models, these homes offer upscale features such as granite flooring, marble countertops, full kitchens and stunning views of the arch from the roof-top terrace. With three-bedroom homes starting at $244,000 U.S., these are a value in the Los Cabos market. The average floor plan at Villa del Tezal offers 1,500 square feet of air-conditioned space and another 225 of balcony. These homes also enjoy community pools, social areas and 24 hour security.
Within Cabo San Lucas proper there are numerous new condominium projects being started, most are offering pre-construction sales or reservations. Two examples are the just-announced Las Cascadas and Plaza San Lucas, both in the upscale community of Pedregal. Plaza San Lucas offers two and three bedroom units, with prices starting at $260,000 U.S. Las Cascadas will offer 100 two- and three-bedroom condominiums, with prices starting at about $300,000 U.S. Both offer walk-to-town convenience and a prestigious address. A number of other, smaller condominium projects are scattered from Old Town Cabo San Lucas to Sunset Beach; San Jose del Cabo also has an abundant number of smaller complexes that offer superior value.
Opportunities Abound in Pre-owned Homes
So far the developments we’ve highlighted have been all newly developed units. You can also find very affordable housing as re-sales in a variety of developments such as Casa Mexicana, Cabo Bello and the Costa Azul area of San Jose. In fact, affordable resale homes can be found in almost every part of Los Cabos. Sometimes these units need a bit of ‘sweat equity’ to bring them up to as-new condition, but the values can be outstanding, as is the return on investment. A professional realtor can help you locate such diamonds in the rough. Professional help is essential in a market as large and varied as Los Cabos. Remember that if it sounds too good to be true, it almost certainly is. There are lots of really good deals available right now, but also some questionable deals. A realtor with membership in the Multiple Listing Society and AMPI and/or an attorney can help you decide if this is a real treasure or a real nightmare.
The All-Important Matter of Trust
One caveat about the more affordable housing is critically important. Many of these developments are sold in what is called the pre-construction phase. Certainly pre-construction prices are attractive. You may, as part of your due diligence, have done research on the Fideicomiso (Trust) required for non-Mexicans to own property within 50 kilometers of the ocean. However, one point is rarely addressed in the published literature. A Fideicomiso can be issued for a building lot with completed infrastructure or a finished home or condo.
For houses or condos under construction however, you will initially sign a contract known as a Promise to Trust. This is patently not the same as taking title. You are essentially signing a private contract with an individual which states that, when the time is right, they will sign over the property to your trust. Make no mistake about it, there is risk involved. There are no completion bonds required in Mexico, nor are escrow accounts involved in these transactions. You will be giving your money directly to a developer on his promise to complete the property and then legally relinquish it to you. Most of the time this is very safe, as our developers have their reputations to protect. Promise to Trust contracts with developers with a strong local background and a reputation to deliver what they promised are literally as good as gold. Your realtor or attorney will be able to advise you about those risks as a neutral third party.
Most first time buyers prefer to have the help of a local real estate agent when choosing a vacation home in Los Cabos. Many of the more affordable properties, however, are marketed directly to the consumer by the developer. Before you enter into any contractual agreement regarding real estate, it is recommended that you have a realtor help with the purchase by entering into a Buyers Representation Agreement or contract with a local real estate attorney to review all documents.
Financing Your Mexican Dream
Only a few years ago, cash was the only way to buy property in Mexico. Although many clients still find it better to find their own financing by leveraging their primary residence, there are a number of companies now offering U.S. mortgages for Mexican property. Recently, these loans have become available to Canadian citizens, as well. With rates approaching those offered in the United States, the availability of these loans means that owning your own home here in Los Cabos is within reach of many more individuals than ever before. If you are planning on financing your purchase, it would be wise to contact the mortgage lender and become pre-qualified before you begin looking at property. Most can pre-qualify you over the Internet or by telephone within 24 hours. You may be amazed to find out you can afford more than you had originally estimated.
Keep in mind that U.S.-based mortgage companies will only loan on completed construction. If you are considering purchasing a property in one of the new developments under construction, you will need to provide your own financing or finance through the developer. Typically, the interest rates and terms offered by our developers have not been as favorable as in your home country. Interest rates of ten or even twelve percent are common. Take into account that the rates and terms of developer financing are typically not negotiable. Once construction is complete, it is possible to convert developer financing to a U.S.-type mortgage through one of the many companies now operating in Baja. While doing your research, be sure to do the math, as a more expensive home with U.S. financing may actually be cheaper in the long run than paying for a lower-priced unit financed by the developer.
So, is Cabo really just a rich person’s playground? Certainly not! As these examples prove, you can afford a luxury home here in Los Cabos that meets or exceeds your expectations. No matter what your lifestyle or your budget. there is an option available here for you. You just have to look for it. Happy Hunting!
Article by Carol S. Billups
