Rise of Cabo Tourism & Short-Term Rental Investments

Los Cabos, a gem on Mexico's Baja California Peninsula, has been witnessing a tremendous surge in tourism. With its sun-drenched beaches, vibrant nightlife, and world-class amenities, it's no surprise that Cabo is a favorite among travelers worldwide. According to the latest reports, Los Cabos welcomed more than 3 million visitors in 2022, a substantial increase from the previous years. The escalating visitor count doesn't show any signs of slowing down. The Los Cabos Tourism Board anticipates a record-breaking 7 million tourists by the end of 2023. This remarkable growth in tourism is not only a testament to Cabo's allure but also an exciting opportunity for real estate investors.

Amid this tourism boom, the Average Daily Rate (ADR) for hotels in Cabo has seen a steady increase. Recent data suggests that the ADR for hotels in Cabo was approximately $300 in 2022, significantly higher than the global average. This high ADR, coupled with the increasing demand for accommodations, presents a lucrative opportunity for short-term rental investments.

Investing in short-term rentals in Cabo can offer several benefits:

High Demand: The continuously rising visitor count translates into a high demand for accommodations. As tourists seek alternatives to expensive hotels, the demand for short-term rentals is expected to soar.

Profitable Returns: With the ADR for short-term rentals being competitive, investors can expect profitable returns. For instance, a well-located property in Cabo can generate an annual gross rental yield of up to 10%.

Growing Market: The growth of Cabo's tourism industry is showing no signs of slowing down. The Los Cabos Tourism Board projects a 20% growth year-over-year in visitor numbers for 2023, indicating a promising future for the short-term rental market.

Diverse Visitor Base: Cabo's diverse visitor base, which includes tourists from the United States, Canada, Europe, and other parts of the world, ensures a broad customer base for short-term rentals.

The thriving tourism industry in Cabo, coupled with the high ADR and growing demand for accommodations, makes the short-term rental market an attractive investment opportunity. If you're considering investing in real estate, now might be the perfect time to explore the potential of Cabo's short-term rental market. Fortunately, Mexico's laws are quite foreigner-friendly, allowing non-Mexican citizens to invest in real estate with relative ease.

Historically, Mexico's Constitution prohibited foreigners from owning property within the "restricted zone," which is any land within 50 kilometers of the coast or 100 kilometers of the country's borders. However, this changed with the introduction of the Fideicomiso system, a trust agreement established through a Mexican bank, permitting foreigners to indirectly own property in these areas.

While this process may seem daunting, companies like MoXi are here to simplify it. MoXi specializes in helping U.S. citizens secure financing for properties in Mexico. We offer transparent, fully amortized mortgages with no balloon payments, no FX risk, and $USD originated and serviced with term lengths up to 30 years. This means that the mortgage interest is reported in the U.S., providing investors with financial transparency and security.

MoXi's experienced team guides investors through the entire process, from pre-qualification to closing. With our deep understanding of cross-border financing complexities, we ensure a seamless and straightforward experience.

The rise in tourism coupled with the potential for profitable returns makes investing in short-term rentals in Cabo an attractive opportunity. With the support of companies like MoXi, securing financing for your dream property in Mexico has never been easier.

Whether you're looking to invest in a rental property or secure a vacation home in the sun, Mexico's real estate market is well worth considering. With Cabo's visitor count on the rise and MoXi's expertise in cross-border financing, now might be the perfect time to make your move.

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Footnotes

1. Visit Los Cabos ↩
2. The Cabo Sun ↩
3. STR Global Report ↩
4. Global Property Guide ↩
5. Forbes ↩