As a real estate agent in Cabo, most of my clients are expats from either the United States or Canada, and they’re looking to buy a second home here. Recently, I’ve been working with more people who want to build instead of buy. What are some of the key factors to consider when buying versus building a home in Los Cabos?
Four Key Reasons to Buy a New Home in Cabo
1. More immediacy/convenience. This one is fairly obvious. When you buy versus build, the home is ready for you to move in as soon as you close, unless you are planning to do a major renovation. Many expats prefer this option as they want to start enjoying their new Cabo home as soon as possible, or if they’re planning to rent it, they want to start generating income yesterday.
2. Time. Building in Cabo can take 12 – 18 months or more from the date the architect’s plans are finalized and a construction contract is signed. And you must also factor in the time to find and purchase and close on the perfect lot.
3. Less Stressful. When you buy an existing home, you have fewer decisions to make and a lot less stress. When you build, you start with a blank canvas and have a number of decisions that have to be made. To fill in that canvas can be endless.
4. Potentially far less costly. Most likely, you will spend far less buying an existing home versus building a new home. The costs to build have increased in recent years. A recent article in the local Gringo Gazette by Cindy Stanford (a fellow real estate agent here), reported that there was a recent comparison done that showed the price of an existing home in excellent condition with great views was 30 percent lower than purchasing a lot and building a comparable home. I also have another listing where my partner did a replacement value analysis on the house. It was built in 2006 and is in great condition, albeit a little dated. It’s currently listed at U.S.$1,125,000. To build a comparable home, they estimated it would take U.S. $2,400,000 today.
On top of these considerations, you are building in a foreign country where things are often done differently. How do you plan to oversee this project? Are you working with someone you fully trust? Do you plan to come down often to check on progress? How much money will you spend renting a home during the construction period?
I have friends who have done it both ways. One couple rented a home literally two doors down from their new build. They were able to oversee everything on a day-to-day basis and this made them feel infinitely more comfortable. I have other friends who are not going to be here during construction (or so they say now). They have just finished the excavation on their lot but haven’t started the actual build. I am guessing they will start visiting a lot more often! So, with these factors in mind, why would you want to build versus buy?
Four key reasons to build a new home in Cabo
1. Customization. You get to design every detail to be exactly as you’ve always dreamed. Whether it’s the type of kitchen cabinets you want or the layout of your master bathroom or the shape of your pool or multiple other decisions, you get to make it yours down to every single detail.
2. Potentially lower operating costs. When you build today, you can have the option of building a more energy efficient home, which can help keep your operating costs down. For example, new models of air conditioners are far more efficient and can help you save on your electricity bill, which can be one of your bigger monthly expenses if you are running the A/C 24 hours a day in every room.
3. No compromises. When you build, you get to pick the location, the view, the size, the placement of every room, fixture, etc. When you buy, I often hear people saying, “Well, this isn’t perfect, but I love it so we’ll compromise a bit.” Ultimately, clients who decide to build say, “I don’t want to have to ‘give’ on anything so that’s why we’re building.”
So, the bottom line is no one can make the decision to buy or build but you. And whatever your decision, once you’re settled in to your new home, I believe you will find Los Cabos to be a pretty special slice of paradise.