So, do you want to buy a property here in Los Cabos as a foreigner, but you don’t know how? Stick around because on this video, I’m going to show you all of the steps you need to know about owning a property here.
Welcome! Today we are going to touch on some important points that you need to know before purchasing a property here in Los Cabos.
First, you need to know that Los Cabos is located in a “restricted zone”. This means any land or property within 50 kilometers of the coastline or 100 kilometers from a border falls into this category. But don’t worry, there’s a way for foreigners to own property here.
The most common way is through a bank trust, or fideicomiso. This is a workaround that works perfectly here. Basically, you make a bank trust where the bank holds the title for you, but you are the sole beneficiary of the property. This means you can sell it, rent it, or pass it to your kids—whatever you want to do with it. The trust lasts for 50 years and is renewable. Setting up a fideicomiso will cost you between $2,000 to $3,000, depending on the bank or company you choose. To maintain it, you’ll pay an annual fee of around $500 to $800.
A second option is to own a Mexican corporation. This is not for everyone; it’s really for people who want to invest and own multiple properties here in Los Cabos or elsewhere in Mexico. Keep in mind that with this option, you will need to pay extra in taxes and for accounting to own the company.
So, here are the steps you need to follow when you’re ready to purchase a property:
1. Find a reputable and licensed realtor. You need to find someone you trust because this person will guide you from the beginning to the end, taking you to the right zone and finding the right property for your needs.
2. Once you find your property, you’ll write an offer to purchase.
3. Next, you’ll set up a due diligence period, which is usually 10 or 15 days. This is your time to do a title search, conduct inspections, and check for correct zoning.
4. Then you need to set up the bank trust (fideicomiso), but don’t worry, the closing attorneys will take care of this for you. They will check for any records or issues before creating the trust.
5. When everything is ready, you’ll sign the deed.
6. After you sign, you pay the balance, and then you get your keys! That’s basically everything.
Now, let’s talk about closing costs, which are around 4% to 9% of the property value. It’s important to mention that if you are using financing, the closing costs might be a little higher, depending on the property’s price and the company you’re working with.
The good news is that property taxes in Mexico are way cheaper than in the United States or Canada. It’s about 0.1% of the assessed value, and you pay it annually. For example, if you buy a $600,000 house, your taxes will be around $600 per year—maybe a little more, maybe a little less. Your accountant or property manager can handle this for you.
Here are my final tips for you:
• First, find a licensed and certified real estate agent.
• Second, always use an escrow account to keep your money safe.
• Third, I highly recommend using lawyers and attorneys that are bilingual. If you don’t understand Spanish perfectly, some words on the titles might not be familiar. A bilingual attorney will help you with all the translations during the transaction.
Here at “be in cabo,” all of our agents are licensed and certified, and we are bilingual. We also work with bilingual attorneys and use escrow accounts to help you translate all the important documents. I know it can be very scary buying a property in a different country, especially with a different language, so we understand. If you have any doubts, please, please, please contact us. We are more than happy to support you.
For more details or any questions you have, please contact us. We can set up a Zoom call and give you all the information you need about the process from beginning to end.
Thank you very much for watching this video, and I hope to see you in the next one!
