Frequently Asked Questions
1. What are the benefits of investing in real estate in Los Cabos?
Investing in Los Cabos offers significant benefits due to the region’s steady growth and popularity as a tourist destination. Properties here experience high appreciation, ensuring a good return on investment. Additionally, the strong vacation rental market allows you to generate additional income.
2. How safe is it to invest in Los Cabos?
Los Cabos is one of the safest areas in Mexico for real estate investment, with a growing property market and transaction oversight by notaries and banks. The market is strong, attracting both tourists and investors worldwide.
3. Can I buy property in Los Cabos as a foreigner without residing in Mexico?
Yes, you do not need to be a resident of Mexico to buy property. As a foreigner, you can acquire property within the restricted zone (near beaches and borders) through a bank trust (fideicomiso), which grants you property rights similar to those of a Mexican citizen.
4. What is the foreigner bank trust (fideicomiso) and how long does it last?
The fideicomiso is a contract through a Mexican bank that allows foreigners to own property within the restricted zone. It initially lasts for 50 years and is renewable indefinitely. During this time, the foreign owner has full rights to use, sell, and inherit the property.
5. Can I apply for a mortgage loan to buy property in Los Cabos?
Yes, it is possible to get a mortgage loan to purchase property in Los Cabos. Several Mexican banks offer financing options with competitive terms and interest rates. Additionally, some real estate developments offer direct financing options.
6. Can I use my Infonavit credit to buy a house in Los Cabos?
Yes, if you are an employee in Mexico and are affiliated with Infonavit, you can use your credit to buy a property in Los Cabos. Infonavit offers financing options for purchasing new or used homes, and it is also possible to combine your Infonavit credit with a bank loan to increase your purchasing power.
7. What documents do I need to sell my property in Mexico?
To sell a property in Mexico, you need to have the property title, up-to-date property tax payments, proof of no outstanding water and electricity bills, and a current appraisal. Working with a notary and a real estate agent is advisable to ensure all documentation is in order.
8. What is the process for purchasing property in Los Cabos as a foreigner?
The process involves selecting the property, negotiating the price, and setting up a bank trust (fideicomiso) if the property is in the restricted zone. A notary will handle the property transfer and ensure all documents are in order for the purchase.
9. What additional costs are associated with buying property in Los Cabos?
In addition to the purchase price, there are additional costs such as notary fees, acquisition tax, bank trust fees (for foreign buyers), appraisals, a lien-free certificate, and the opening of an escrow account. On average, these additional costs can range between 5% and 8% of the property price.
10. What is an Escrow account and how does it work in a real estate transaction in Mexico?
An Escrow account is a trust account managed by a neutral third party that holds funds during a real estate transaction. In Mexico, it is commonly used in real estate deals to provide security for both the buyer and the seller. The third party (Escrow) holds the buyer’s funds until all sale conditions are met, including signing legal documents and handing over the property. Once both parties have fulfilled their obligations, the funds are released to the seller. This process protects both parties and ensures a transparent transaction.
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