Have you been thinking about the fabulous prospect of buying real estate in Cabo San Lucas, Mexico? If you have, below we have provided some tips that you should consider before you buy any real estate in Mexico
Things to bear in mind before buying real estate in Cabo San Lucas
The Closing Process for Cabo Real Estate
The full closing process when buying real estate in Cabo San Lucas will take approximately one to two months. Your real estate office and the local public notary will coordinate all the paperwork and escrow payments. The buyer is responsible for paying the closing costs and the seller is responsible for paying any capital gains tax and the real estate fees on real estate in Cabo San Lucas. The two parties do not have to be present during the closing if you offer power of attorney to a local lawyer to represent you.
The Taxes in real estate in Mexico
The property taxes in Cabo San Lucas are low and they are known as “Predial”. The rate is around 0.08% of the assessed value of the property, to be determined at the time of closing.
If you are purchasing a condominium in Cabo San Lucas, then the Condominium Owners Association is responsible for maintaining the common areas as each condominium building pays for the maintenance of monthly fees. If you are an owner and you will be away from your property for a lengthy time, then a property management company can be hired for you.
Types of Insurance
Property damage, liability, and earthquake insurance are just a few of the types of insurance that can be purchased for your property when buying real estate in Cabo San Lucas, It is worth mentioning that insurance is very affordable in Mexico. All of the variety types of insurance policies can be written that if there is any claims the payout should be done in US currency.
Financing for Real Estate in Cabo San Lucas
Most of the real estate purchases that occur in Mexico are done with cash, but lately, mortgage options are becoming more available for permanent residents even though the interest rates are high. As a foreign buyer, you will need to do your own financing and you can do that with an equity loan, a personal loan, or a second mortgage on your home.
There is a big demand for rental homes and condos in Cabo San Lucas. You can expect a seventy to eighty percent of a natural occupancy if you purchase property that is in a demand area and you rent that property out at a price that is competitive.
Equity Profit on Real Estate in Cabo San Lucas
Most people buy real estate in Cabo San Lucas to be able to enjoy the property as a second home for vacations or for when they retire. The idea of property speculation is still in its infancy. Nevertheless, the real estate market in Mexico’s top vacation destinations is very stable and you will surely make a profit over time, especially if you purchase this year.