Many American and Canadian would-be buyers of real estate in Los Cabos have decided to put off buying property in Los Cabos and investing in the purchase of a home or just general investment in the real estate market in Cabo San Lucas, Mexico, because of possible perceived risks to the safety of their investment in Mexico.

There are a plethora of smart savvy ambassadors doing their best to help bring back tourism to Los Cabos and Mexico in general, one such high-profile individual happens to be the renowned Anthony Bourdain, who loves Mexico and has done more than his share to dispel the ridiculous over-sensationalized media barrage on Mexico and it’s security. The Simple fact remains that Mexico is a very large country, and even under normal circumstances in any Large Country including the U.S. and Canada, you will find trouble if you look for it or are doing something beyond the law or are hanging around people who are.

buying property in Cabo
Owning property in Cabo

Many American and Canadian would-be buyers of real estate in Los Cabos have decided to put off purchasing a home or investing in the real estate market in Cabo San Lucas, Mexico, because of possible perceived risks to the safety of their investment in Mexico. But I can assure you that this is not the case when buying property in Los Cabos.

There are a plethora of smart savvy ambassadors doing their best to help bring back tourism to Los Cabos and Mexico in general, one such high-profile individual happens to be the renowned Anthony Bourdain, who loves Mexico and has done more than his share to dispel the ridiculous over-sensationalized media barrage on Mexico and it’s security. The Simple fact remains that Mexico is a very large country, and even under normal circumstances in any Large Country including the U.S. and Canada, you will find trouble if you look for it or are doing something beyond the law or are hanging around people who are.

I personally feel safer in Baja than in any large or even mid sized city in the United States. I have been buying property in Los Cabos for almost 10 years and have been liquidating our rental properties in the U.S. to continue investing in Cabo.

Most recently, the importance of foreign investment Mexico and it’s economy has increased since Congress has made a number of changes including some bold structural changes. Even to the point of allowing foreign investment in energy and infrastructure, as can be seen most recently in the new Gas stations opening with familiar names to Americans not just Pemex anymore.. Even commercial investors are buying property in Los Cabos.

With these changes come opportunity in today’s Mexico. Foreigners have more opportunities than ever to purchase homes or invest in other forms of Mexican real estate. If you are looking at the inland portion of Mexico, the purchase of real estate by escritura(deed) by foreigners is very similar to a purchase in the United States. As you may or may not be aware, the Mexican Constitution of 1917, specifically prohibited the foreign ownership of residential homes and real property within approximately 50 kilometers of any ocean or coastline and within 100 kilometers of Mexico’s natural borders. Nearly the entire Peninsula of Baja California North and South is considered a “restricted zone.” Starting in 1971 (and further expanded in July, 1989 and then in 1993) provisions were made that would allow for a mechanism that would let foreigners own property in this “restricted zone.” By this means a foreigner would purchase the beneficial interest in a home or other real property through a bank trust known as a “fideicomiso.” In said bank trust, the specific buyer of said property, would be designated as the “fideicomisario” or as the beneficiary of this trust.

When buying property in Los Cabos the Legal title is still being held by the bank, (specifically as the trustee of the trust or as the “fiduciario”) the trustee must then hold the title in strict accordance with the instructions of said buyer (the person who is  beneficiary of this trust). It should also be noted that the property or  entrusted property is not an asset of said bank and that the trustee is duly obligated to follow and exercise every lawful instruction given by said beneficiary to perform all legal actions as dictated by beneficiary, i.e. lease it, make improvements, sell or encumber it, etc.

A Fideicomiso or Bank Trust is also considered a very effective tool in the process of Estate Planning because, as similar to any other trust, the purchaser designates the person or persons that will be the beneficiaries in the event of death. Thus, as the beneficiary of said trust, the purchaser will have substitute beneficiaries who would then assume the beneficiary status upon the death of the purchaser without the usual need for probate hearings.

New trusts are established for a time period of 50 years, with the irrevocable option to renew these trusts for another 50 years. This allows a foreign owner of a property in said restricted zone to exercise the same rights as a Mexican national citizen with regard to the use of said property but they must do so through the Trustee or Fiduciario.

I hear over and over that you cannot own land in Mexico, “It is only a lease” THIS IS FALSE! It is a common unfounded Fallacy that you are not able to own land in Mexico. Make no mistake, and contrary to common unfounded hearsay, When buying property Los Cabos, Mexico it is not a lease or anything similar to it. 

In conclusion, almost all property in Los Cabos, Mexico is available for purchase by Americans and Canadians. Please keep in mind that the bank trust known as a fideicomiso, is the most common instrument when acquiring real estate within said restricted zone. unless the buyer chooses to create a Mexican corporation or Mexican LLC to hold title to the property as an asset.

 A Mexican real estate professional such as the Licensed agent at Own In Cabo real estate can help you further understand the purchase system here in Cabo and the surrounding areas. They can help you with buying property in Los Cabos and all the questions you might have?