As we head into the second half of 2021, inflation is the top economic concern on many people’s minds. You’ve undoubtedly noticed that the prices you’ve paid for seemingly everything from utilities to groceries have gone up this year. If you have a bit of money to invest, you’ve probably wondered where you can put that money to give it the best chance of growing – rather than having its purchasing power eroded – over time.
Investing in real estate has long been considered one of the best ways to hedge against inflation. If you buy property in a strong market, the property’s value should keep pace with the purchasing power of the currency – and if you’re not living in the property, you can earn income by renting it out. If the real estate market in the area is strong, you should have no trouble increasing the rent as time goes by.
So, here’s the question: Should you be looking at homes for sale in Cabo? Is Cabo real estate an investment that you should pursue? The answer to that question is an unqualified “yes.” Cabo is easily one of the world’s top real estate markets, and you’re about to learn why.
The Cabo Real Estate Market Is Growing Rapidly
Since 1990, the population of Cabo San Lucas has grown year over year at a rate of about 4-8 percent. Cabo is one of Mexico’s top tourist destinations. It’s a gorgeous waterfront city at the tip of the Baja Peninsula. Given the fact that there’s no way to duplicate such an amazing setting elsewhere, there’s no reason to believe that people will stop wanting to go to Cabo. That’s especially true considering how reasonable the cost of living is in Cabo – a subject we’ll touch on shortly.
As we hopefully approach the end of the COVID-19 pandemic, the economy of Cabo has remained strong – and the recovery is only beginning to pick up steam. At the time of writing, non-essential travel between the United States and Mexico by car is not allowed, and cruise ships are not stopping at the Port of Los Cabos. There are no flight restrictions, however, between the United States and Los Cabos. To ensure that people can feel safe traveling there, COVID-19 testing is available at virtually all hotels and other transient accommodations in Cabo. The excellent COVID-19 response in Los Cabos will help to ensure that the region is among the first to benefit when cruise, car and rail traffic to the area resume.
You Can Enjoy a Higher Standard of Living in Cabo
When talking about Cabo real estate as investment, we’ve discussed the fact that a home in one of the world’s most famous tourist areas can be an excellent source of supplemental income by way of rent payments. Let’s shift gears, though, and discuss what it’s like to buy a home in Cabo from an economic standpoint if you actually want to live there. If you’re an American and earn your income in dollars, you might be reading this article because you’re already aware of the dollar’s strength against the peso. The dollar has done incredibly well against the peso over the past several decades, but what you might not know is that even in a tourist paradise like Cabo, your money will still go further than it does at home. For a few practical examples, look at these cost-of-living comparisons between Cabo San Lucas and a few major American cities.
- A monthly income of $2,784 in Cabo gives you the same standard of living as $8,000 in Seattle.
- A monthly income of $3,457 in Cabo gives you the same standard of living as $8,000 in Denver.
- A monthly income of $2,707 in Cabo gives you the same standard of living as $8,000 in Boston.
Wherever you live in the United States, your money will go dramatically further in Cabo – and the higher the costs of living are where you currently live, the greater your buying power will become. If you moved to Cabo from New York City and maintained your current income, for example, your standard of living would essentially quadruple.
Cabo Has an Excellent Economic Outlook
The vast majority of Cabo’s revenue comes from the tourism industry, so businesses such as resorts, hotels, restaurants and travel companies generate the majority of the area’s revenue. Unless you work from home, there’s a good chance that you’ll work in the hospitality industry if you move to Cabo – and as we approach the end of the COVID-19 pandemic, Cabo’s economy is thundering back in a big way. That’s the way things always are in the best resort cities. When you live in an area delivering an experience that’s impossible to duplicate elsewhere, people will always want to come, and the hospitality industry will always be hiring.
For evidence of Cabo’s projected economic growth in 2021 and beyond, look no further than the lengthy list of luxury housing and resort developments slated for completion within the next several months. Here are just a couple of highlights.
- The Four Seasons has a massive property currently under construction in Cabo. The expansive 50-acre resort will feature the standard array of guest rooms and suites along with private residences and villas starting at $4.8 million. When owners aren’t living in their residences, they can rent them out through Four Seasons.
- The St. Regis Los Cabos is a second community in development at the time of writing. The community’s planned 74 residences will include several oceanfront villas along with condominiums boasting dramatic ocean views. The community will also include a high-end luxury hotel, and it’s built around the Jack Nicklaus-designed Quivira Golf Club. Condominiums start at $2.8 million.
When you want to know what the future outlook for a region’s real estate market is like, nothing could possibly be a more bullish sign than massive institutional spending amounting to hundreds of millions of dollars. It’s a sure sign that organizations with big money are expecting people to continue flocking to Cabo as they always have, and that above all else should give you plenty of confidence that Cabo real estate is an ideal investment.
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