Case - Condo as personal use and vacational rental

Investment Case: Vanessa & Jorge in Los Cabos

Situation

In 2023, Vanessa and I, residents of Mexico City, started considering purchasing a property in Los Cabos. A friend had mentioned the area's rapid growth and strong investment potential, which sparked our interest. Initially, we weren't sure if the purchase would be for personal use or as a business opportunity. After evaluating the market, we decided that the ideal scenario would be to acquire a property with high appreciation potential that could also generate income through vacation rentals.

One of our biggest initial challenges was uncertainty about the best location to invest. Los Cabos offers a wide variety of areas, from highly developed tourist hubs to more remote locations where infrastructure is still catching up. We had many questions: which area would provide the best return on investment? Would the property have reliable access to essential services like potable water? Would the market value increase over time? These are the kinds of insights only someone with deep local expertise could provide, making professional guidance crucial.

Tasks

Our goal was to find a well-located condo with strong rental potential and easy access for tourists. While we already had an estimated budget, we were open to adjusting it if we found a property that ensured profitability and long-term appreciation.

Before making a decision, we conducted a detailed financial analysis to project our return on investment. We researched rental market trends on Airbnb, Booking, and other platforms, comparing rates, occupancy levels, and operational costs. This financial modeling was a crucial step, providing us with the confidence needed to move forward with our investment.

Actions

We began our search online and, once in Los Cabos, worked with several brokers to explore different areas. After evaluating eight to ten properties, we found one that perfectly matched our criteria. Interestingly, it wasn't a broker who sold us the idea; we identified the property's potential on our own and made the decision to buy.

However, the process wasn't without obstacles. Being unfamiliar with the area and the real estate process in Baja made us feel uncertain, so we hired a lawyer to review the legal documentation. This turned out to be a critical step, as the lawyer discovered a legal issue: the property was being sold even though the owner had passed away, and the documents had not yet been fully updated. Thanks to the legal team, we were able to resolve the issue and finalize the purchase safely by using an escrow account to secure the funds until everything was legally cleared.

Result

From day one, we listed the property on Airbnb, achieving high occupancy rates. Managing it hasn't been easy; it requires constant attention to guest service, communication, and property upkeep to maintain high ratings and attract more bookings. However, the efforts have paid off: the condo generates consistent income while also serving as a personal getaway, which we use about once a month.

A year later, we remain convinced that we made the right choice. The property's value has appreciated, and its location has been a key factor in its rental success. However, we realized that the process would have been much smoother if we had access to a comprehensive service that could assist with every step of the purchase—from market research and financial analysis to legal reviews and administrative processes. That’s why we are here. After two years of exploring multiple investment opportunities, getting to know several real estate professionals, and formally becoming certified in real estate, we are now ready to continue growing our investments and helping others, always keeping in mind that the buyer is our top priority throughout the transaction.

Key Takeaway

This case highlights that while buying property in Los Cabos can be a great investment, it also comes with unexpected challenges. From legal hurdles to location uncertainty, having expert guidance from the beginning can save time, money, and stress. For those considering investing in the area, working with experienced professionals can make the difference between a smooth transaction and a complicated experience.