Step-by-Step Guide to Buying Property in Los Cabos, Mexico as a Foreigner

Step 1: Understanding Property Ownership in Mexico

Mexico’s constitution restricts direct foreign ownership of property within 50 kilometers (31 miles) of the coastline or 100 kilometers (62 miles) from international borders. However, foreigners can still purchase property in Los Cabos through two legal mechanisms:

Fideicomiso (Bank Trust)

A fideicomiso is a bank-held trust that allows foreigners to purchase property in restricted zones. Here’s how it works:

• A Mexican bank holds the title on behalf of the foreign buyer.
• The buyer retains full control and ownership rights.
• The trust is valid for 50 years and can be renewed indefinitely.
• The buyer can sell, rent, or pass the property to heirs.

Mexican Corporation

For those interested in purchasing property for commercial purposes, setting up a Mexican corporation may be an option. This structure allows foreign investors to own land directly without a fideicomiso. However, it requires business operations and compliance with Mexican corporate regulations.

Step 2: Define Your Investment Goals

Before diving into the buying process, it’s important to define your investment objectives:

• Vacation Home: Looking for a second home or seasonal getaway?
• Rental Property: Seeking passive income through short-term or long-term rentals?
• Retirement Destination: Planning to retire in Los Cabos and become part of the thriving expat community?
• Business Investment: Interested in commercial real estate opportunities?

Clarifying your goals will help you select the right property and location to maximize your investment.

Step 3: Choose the Right Location in Los Cabos



Los Cabos consists of two main towns: Cabo San Lucas and San José del Cabo, each offering distinct lifestyle options.

• Cabo San Lucas: Known for its vibrant nightlife, luxury resorts, and deep-sea fishing.
• San José del Cabo: A more tranquil, artsy town with high-end residential communities and a relaxed atmosphere.
• The Tourist Corridor: A 20-mile stretch between the two towns, home to exclusive beachfront properties and golf course communities.
• Pacific Side: Emerging as a top investment destination with lower prices and incredible ocean views.

Step 4: Find a Reputable Real Estate Agent

Partnering with a knowledgeable, bilingual real estate agent who specializes in Los Cabos is crucial. An experienced agent will:

• Provide market insights and help negotiate the best deal.
• Guide you through the legalities of foreign property ownership.
• Connect you with reputable lawyers, notaries, and financial institutions.

Look for agents affiliated with the Los Cabos MLS (Multiple Listing Service) and recognized real estate organizations such as AMPI (Mexican Association of Real Estate Professionals).

Step 5: Secure Financing (If Needed)

While many foreign buyers pay in cash, financing options exist:

• Mexican Banks: Some banks offer mortgages to foreigners with strict requirements.
• U.S. or Canadian Lenders: Certain international lenders provide financing for property purchases in Mexico.
• Developer Financing: Some new developments offer direct financing with flexible terms.

Be sure to compare interest rates and loan terms to determine the best option for your investment.

Step 6: Make an Offer and Sign a Purchase Agreement

Once you’ve found the perfect property, your agent will help you submit an offer. If accepted, a purchase agreement (Contrato de Compraventa) will be signed, detailing:

• Purchase price and payment terms
• Closing date
• Deposit amount (typically 5-10%)
• Any contingencies or special conditions

Step 7: Establish the Fideicomiso (Bank Trust)



Your lawyer will work with a Mexican bank to establish the fideicomiso. The process includes:

• Choosing a Mexican bank to hold the trust.
• Submitting legal documents (passport, proof of funds, purchase agreement).
• Paying a setup fee (approx. $2,000 USD) and annual trust fees (~$500 USD).

Step 8: Conduct Due Diligence and Secure Legal Assistance

Hiring a real estate attorney ensures all legal aspects of the purchase are clear. Key tasks include:

• Verifying the property has a clean title (free of liens or debts).
• Checking that permits and zoning regulations are in order.
• Reviewing the Escritura Pública (official deed).

Step 9: Closing Process



Once all documents are verified, the closing process involves:

• Finalizing the fideicomiso with the bank.
• Signing the Escritura Pública before a Mexican notary.
• Paying closing costs (approx. 5-7% of the purchase price).
• Receiving the official property title and registering it with the Public Registry of Property.

Step 10: Enjoy Your New Property!

Congratulations! You now own property in Los Cabos. Whether it’s a vacation retreat, rental investment, or full-time residence, your new home offers an exceptional lifestyle in one of Mexico’s most desirable destinations.

Why Work with Baja Investments?



Navigating the real estate market in Los Cabos requires expertise and local knowledge. Baja Investments specializes in helping foreign buyers find the perfect property while ensuring a smooth, secure transaction. Contact us today to explore exclusive listings and begin your journey to owning a dream home in Los Cabos!