So You Want to Own a Slice of Paradise?. Los Cabos Magazine Issue #30 Fall 2012.
The nuts and bolts of Los Cabos real estate.
Purchasing property is one of the most important things you will ever do. Chances are, it will also be one of the most taxing when it comes to your patience and finances. That’s true whether the property is in the United States, Canada, or México, or is for a permanent residence, vacation getaway, or rental property.
Fortunately, there is a network of qualified professionals who can provide a gentle guiding hand to the growing number of foreigners who have fallen in love and decided to make the move to Los Cabos. “Essentially, the comment we like to make to our customers is ‘Yes, buying [property] in México is different from in the United States or Canada. It’s not easier, it’s not more difficult, it’s just different,’” says Mike Schaible, owner of Baja Properties in Los Cabos.
Twenty-seven years ago, Schaible was selling time-shares in Vail, Colorado. “I wanted to move to the beach,” he says, “so my boss bought me a ticket to San José del Cabo. He said if we really liked it, he would build a time-share here and we could work it. We spent one day here, went home, got in the car, and came back. At the end of one week, we opened the first real estate company here. We left the time-share business and opened Baja Properties.”
Schaible says he understands the concerns of those who wish to buy property here, especially those who are making their first purchase in a foreign country. “We always recommend that you do your purchasing with a member of the formal real estate community,” he says. “Here we call it AMPI, the Asociación Mexicana de Profesionales Inmobilarios. It’s the same as the [Canadian Real Estate Association in Canada] and [National Association of Realtors] in the United States. It’s an organization of 300 members in Los Cabos, and we are all bound by a code of ethics. We are self-policing, we have an honor-and-justice commission, and we do not tolerate any nonsense. In México, we’re not licensed like in Canada and the United States, so this organization helps the customer avoid the coyotes, the street vendors.”
Vanessa Fukunaga, majority owner of Snell Realty, agrees. “We don’t do things on a promise or handshake, we have rules to abide by,” she says. “That’s why it is important to have the right people in place. It’s why Snell has partnered with the right people, because you do need to make sure that everything is being taken care of properly. Even if you are buying in the United States, you are entrusting the needs and wants of you and your family to somebody who you hope will match you with the right home. All of that same kind of thing happens here.”
So, what are the basics of purchasing property?
Foreigners are allowed to purchase property in México, will it to their heirs, rent it to vacationers, sell it for a profit, finance their purchase, and obtain title insurance just as they would in the United States and Canada. The outright purchase of property along the Baja Peninsula is a little more complicated because of a Mexican regulation (the fideícomiso law) that requires extra steps for properties within 50 kilometers of the beach or 100 kilometers of the border.
“Constitutionally, foreigners are restricted from simple title ownership in the restricted zone,” Baja Properties’ Schaible says. “You can go to the mainland and as long as you are more than 50 kilometers from the beach or more than 100 kilometers from the border, you can get simple title to your property. Here, the entire peninsula is in the restricted zone, so you must have a bank trust.
“The law was put in in 1917. I think it was for sovereignty, that they were afraid the United States would purchase property and put in naval bases. Besides, back then, nobody down here knew what a tourist was. Then the ’50s and ’60s came along with Desi Arnaz and the big boys coming down, and all the hype created an interest in México. To get around its own constitution, in 1970 there was the creation of the 30-year bank trust, which was later extended to a 50-year bank trust. What that essentially means is the title to the property is held in the bank of your choosing, and you are the beneficiary of that trust. As such, you are entitled to all uses and benefits of real property.
“We can enjoy the property, rent the property, resell the property—for a gain, hopefully—and we can will the property to our heirs, which is a nontaxable event. [The government] brought this instrument into the marketplace to satisfy those people who wanted to own villas in México but who had to put them in the names of the local fishing captain who then moved in when the property owner wasn’t there.”
The rules apply whether the property is a freestanding house or condominium. Foreigners can purchase property for commercial or industrial purposes outright if they first form a Mexican company; this requires only two people, both of whom can be foreign born.
Fukunaga, of Snell Reality, hails from Park City, Utah, where she worked in product development for more than 15 years before acquiring majority ownership in Snell last March. She says the bank trust isn’t the only development implemented to invite foreigners. “They have taken great steps here to ease purchasing and the closing process,” she says. “You can now get title insurance and use the third-party U.S. escrow process.”
What’s the purchasing process like?
It begins with finding a suitable property, of course, and making an offer. That process begins, with selecting one of Los Cabos’ longstanding real estate companies, such as Snell, Baja Properties, or Cabo Realty Pros (owned by Los Cabos Magazine real estate expert Carol S. Billups). At that point, a notary public is used to ensure there are no liens, lawsuits, or judgments against the property and that all property taxes are paid and current. Title insurance is purchased, and, once that is accomplished, the property must undergo an appraisal. If necessary, a lending company is brought in to finance the purchase.
The purchaser then works with the notary public to select a local financial institution to set up the bank trust to create the trust deed. The money is exchanged, and the purchaser is ready to move in. Closing usually occurs 45 to 60 days after an offer is accepted.
Why is now such a great time to buy?
A weak U.S. economy has led to a recent dip in Los Cabos housing prices. Fukunaga says the battering México’s image has taken in the North American media has not helped, but the decision to hold the G20 meetings here should.
“Unfortunately, the biggest challenge these days is around the safety aspect,” she says. “There has been too much heightened intensity about the safety issue with people not realizing that the State Department travel advisory is really a non-advisory as far as this area is concerned. We’ve been trying to make connections with the various tourism boards and PR firms to help in this area.”
Schaible says the current state of the economy makes it a good market for buyers. “This is a great time to be a commissioned agent because we’re doing it with yesterday’s prices in today’s Los Cabos,” he says. “Los Cabos has never been more beautiful or well positioned in the North American market as we are today.”
He points to the new convention center built to host the G20 Summit meetings, as well as improvements in infrastructure, including upgrades at the airport and along the main highway.
“We have a 6,000-seat convention center now,” he says. “We can hold conventions we never could before. That means we are in a position to steal conventions and meetings from Las Vegas, Orlando, Hawaii. It’s a complete game changer. That means there are that many more hamburgers, T-shirts, pieces of real estate to sell.”
Best Buys
The hottest properties on the market right now
The real estate in Los Cabos is finally back on track, so we wanted to highlight some of the best buys available now. Here are some new communities that offer good value at realistic prices in every price range. They represent a variety of styles, prices, and amenities. Although these are only a few of the gated communities in the Los Cabos area, they provide a good overview of the types of ownership opportunities available here.
One new development on the Tourist Corridor—the section of highway that connects Cabo San Lucas to San José del Cabo—is Maraluna Residencial. These three- and four-bedroom houses feature top-end finishes (marble, granite, crown molding, travertine floors) and are fully automated so that owners can turn appliances and lights on and off with a swipe of their iPad. The rooftop gardens offer views on the Sea of Cortés; optional fire pits, barbecues, and hot tubs are available. The location, only minutes from downtown Cabo San Lucas, makes this development perfect for full-time residence as well as vacationing. Prices range from $299,000 U.S. to $425,000 U.S.
Ventanas Residences is probably the best-selling development in Los Cabos—and for good reason. Developed by the PORTUS Mexico group, the homes are stylish, well built, and reasonably priced. There are three phases to the development; the newest is called Ventanas de Cabo. These homes are higher on the hill than the previous phases, and their rooftop terraces offer 360-degree views of the Cabo San Lucas Bay, Land’s End, and the mountains. If the previous phases are any indication, the Club House here, still in development at press time, will no doubt be spectacular and amenities normally found only in very high-end developments. Some of those include pools, hot tubs, fire pits, a business center, a restaurant, a market, a bar, and a daycare center. Ownership in Ventanas comes with big perks. Although the homeowner chooses her landscaping, the on-site gardeners maintain it. Maid service can also be arranged, and the homeowners association will assist with rentals of units or pre-stocking pantries. Homes that are purchased prior to construction can also be customized. Prices come in a large range of prices. Delivery of homes in Ventanas de Cabo is expected to begin this summer.
México’s largest residential builder is HOMEX, and it is completing three developments in Los Cabos. The three projects span a range of locations and prices. The most enviable location would be Las Villas de Mexico in the master-planned community of Club Campestre in San José del Cabo. Club Campestre offers all the amenities you would expect from a five-star resort, including a Nicklaus-designed golf course, private beach club, tennis, and concierge services. The spacious condominiums are low density and clustered around recreational areas, which boast pool, hot tub, and barbecue areas. Homes in Las Villas start at about $350,000 U.S. Homex is also offering Las Villas de Mexico projects in Loreto and Cancún.
Nearer to Cabo San Lucas, you’ll find Cumbre del Tezal and Luna del Tezal. Both are located on the Tourist Corridor and just minutes from the city center. Cumbre del Tezal offers sophisticated residences with views of the bay and Land’s End that start at about $150,000 U.S. The gated community is made up of three-bedroom, four-bath homes; amenities include pools, a gym, and barbecue areas.
Nearby Luna del Tezal has two-bedroom, ocean-view condos starting at about $115,000 U.S. This gated community features three large pools, 24-hour security, and tropical landscaping.
A great buy doesn’t have to mean the least-expensive option. The ultraposh Hacienda Beach Club and Residences has introduced its “First Steps to the Beach” program in which a single residence is featured at a very special price every month. At press time, the offering was a three-bedroom home that had been priced at $1.62 million U.S. available for a short time for $1.095 million U.S. This deal included a $100,000 U.S. furniture package.
Your real estate agent will be glad to provide more details on these projects as well as provide re-sale properties that are priced under market value. With prices reduced and inventory high there has never been a better time to invest in the Cabo lifestyle.
Carol Billups is broker-owner of Cabo Realty Pros (www.caborealtypros.com) and is Los Cabos Magazine’s real estate expert.
The Tear Sheet
A quick, clippable breakdown of properties highlighted in this issue
Prospective buyers, beware. The diverse, luxe real estate offerings that dot the Southern Baja Peninsula can overwhelm. Not only do these haute properties stun—the architecture! the landscaping! the amenities!—but they come in a variety of forms and prices. Contact Los Cabos Magazine’s real estate expert Carol S. Billups if you have specific questions or are in need of guidance (her e-mail is cbillups@caborealty pros.com), or read on for Ed Kociela’s helpful “So You Want to Own a Slice of Paradise?” page 24, which breaks down the nuts and bolts of Los Cabos real estate.
In this section, we give you a quick glimpse of some of our favorite properties and the amenities they offer.
Property: Cumbre del Tezal
Where: Cabo San Lucas
Developer: Homex is one of the nation’s largest homebuilders, and its focus is on entry-level and middle-income housing.
Best Features: You’re five minutes from the beach at this exclusive Cabo San Lucas gated community, which also boasts pretty ocean views, tropical gardens, and outdoor grilling areas complete with palapas. You’ve got the sensational Baja setting and the amenities you’ve grown to love back home: gym, three large swimming pools, 24-hour security. Plus: The properties, which come direct from the developer, can be purchased with U.S. or Mexican financing.
Floor Plans: Three bedrooms, four bathrooms
Cost: Units start at 150,000 U.S.
Contact: www.homex.com.mx
Property: Maraluna Residencial
Where: Tourist Corridor, between Cabo San Lucas and San José del Cabo
Best Features: The views from these Tourist Corridor homes are picture perfect. To one side is the bountiful Sea of Cortés; to the other, mountains. Take it all in from your rooftop garden. Or relax down at one of the swimming pools. There’s also a sports bar, snack bar, business center, and more. Plus: All homes are automated by iPads.
Floor Plans: There are 140 single-family homes; contact for details
Cost: $490,000 U.S.–$690,000 U.S.
Contact: www.maralunahomes.com
Property: Luna del Tezal
Where: Cabo San Lucas
Developer: Homex
Best Features: Good luck finding a two-bedroom unit with 24-hour security, gym, three pools, ocean views, and lush tropical gardens just five minutes from the beach for $100,000 U.S. in Los Angeles! But that’s exactly what you’ll get with this property from Homex. The units come directly from the developer, and U.S. and Mexican financing is available.
Floor Plans: Two bedrooms (two models available)
Cost: Units start at 100,000 U.S.
Contact: www.homex.com.mx
Property: Ventanas Residences
Where: Tourist Corridor, between Cabo San Lucas and San José del Cabo
Developer: PORTUS is well respected within the Los Cabos real estate community for its ability to meet deadlines and fair pricing. It earned praise for rethinking its strategy at the start of the recession to focus on affordable luxury, and that decision has paid dividends. Many properties have sold out quickly.
Best Features: There are various phases, or properties within the larger Ventanas Residences banner, but for our purposes, we’ll describe the adjoining phases as one. The units are gorgeous, and so are the views of the Sea of Cortés. This is easy living at its finest. While located just a few minutes from downtown Cabo San Lucas, there’s little reason to leave the property. Here you’ll find on-site restaurants, a deli and market, a spa, swimming pool, fitness center, kid’s club, pets park, even a chapel.
Floor Plans: Villas, townhomes, and condos
Cost: Ventanas del Cortés condos from $145,000 U.S. (sold out), houses from $245,000 U.S.; Ventanas del Mar condos from $155,000 U.S., houses from $265,000 U.S.; Ventanas del Mar Privada houses from $209,000 U.S.; Ventanas del Cabo condos from $175,000 U.S., houses from $285,000 U.S.
Contact: www.ventanasresidences.com
Property: Las Villas de Mexico
Where: San José del Cabo
Developer: Homex
Best Features: Homex knows how to do resort-style living. Its popular Las Villas de Mexico has proved a hit in Los Cabos and Loreto, and soon you can expect to learn about a new Cancún property. Here, you’ll find all the best resort amenities—world-class service, tennis, pools, hot tubs, an 18-hole Nicklaus-designed golf course—plus the privacy and luxury of your own home. The views ain’t bad, either: Las Villas de Mexico is located along a San José del Cabo beach, in the foothills of the Sierra de la Laguna Mountains.
Floor Plans: Townhouses, villas, and condos
Cost: Starting at $350,000 U.S.
Contact: (877) 527-8455 (from United States), www.lasvillasdemexico.com