The Space for Expatriates
The cost of living in Los Cabos is the most frequently searched topic on the blog and someone recently suggested that I revisit and update those posts. And they’re probably right that things have changed since we last talked about how affordable it is to live in Cabo. So here we go. There is no way this will all fit in one blog so I’ll spread it out over several, grouping by topic (cost of groceries, cost of medical care, etc). And I’m going to start with keeping a roof over your head.
No doubt about it, housing is going to be your largest expense whether you rent or buy. The very obvious but worth mentioning difference is that when you buy it is a one-time expense. Right now both selling prices and rents are at an all-time low. There is no doubt that when the world economic crisis eases up both will rise. This is *NOT* a sales pitch, but if there is any possible way you can buy right now, do it. Not every owner is anxious to sell, but there are enough of them willing to take a loss that it’s the opportunity of a lifetime. Good example: the Mañanas condos just outside of town have a lovely pool area and most have wonderful views of the bay and arch. These are one bedroom condos that would be perfectly fine for a single or couple (as long as they’re a compatible couple). Right now there are a couple of them on the market in the low $50,000 USD range. Heck, they were going for more than that when I started in this business! Just a few years ago they were going for $90K and in some cases even more. If they work for you, locking them in at today’s prices only makes sense. There are similar bargains scattered around Los Cabos. Not every seller believes the recession has affected Cabo; it will take a great deal of effort on your part and that of your real estate agent to locate and negotiate a smokin’ hot deal. But in my mind it’s worth the effort to lock in a forever low cost of living. Remember that yearly costs are usually pretty minimal (for example property tax) so once in your living expenses will be just utilities, transportation and food.
If you need to rent, try to wrangle the longest possible term. Mexican law allows leases up to ten years duration, so let that be your goal. I just checked out the classifieds in the paper; a one bedroom furnished condo on the corridor near Costco is asking $500 plus electricity. A two-bedroom very close to the beach in Cabo Bello (also just a few minutes out of town) is being offered for $800. I’m not an expert in rentals, but both seem below market to me. Obviously your landlord will resist a long term lease, but it’s worth trying for one.
Back to property tax: it’s nothing. For example, the annual tax on a three-bedroom home in the upscale neighborhood of Pedregal was a whopping $135 USD this year. If you pay early a discount applies, this year as I recall they reduced your tax by 15% if paid in January. And if you’ve achieved a certain age you can apply for a discount card that reduces your taxes by half. Water is very inexpensive, again the home in Pedregal that includes a pool and large garden was paying $35 US for water and sewer before going on desal.
That leaves electricity. Ahem. Highway robbery or extortion would be the most apt descriptions of my electric bill, but in other parts of town the bills are more affordable. Wherever you are, though, this will be your largest monthly expense. And, of course, there’s not a dang thing you can do about it. When someone finally imports attractive solar panels (my neighbors primary view is right over my roof and I don’t want to start a feud) I will so be their first customer! Internet and phone (landline) are often bundled and there are a variety of packages available. Cell phones also come in a variety of plans including a pre-pay-as-you-go that is very affordable, you can get an Android phone with unlimited internet for about $40 US a month. You’ll also want to bring down a VoIP box to make free long distance calls over the internet; Vonage or Magic Jack seem to be the most popular plans.
Home-owners dues vary from being very affordable to outrageous depending on the community you choose; if you will be here full time there are also very nice neighborhoods with no HOA dues. The only reason most buy in a gated community is that they need someone to keep an eye on their homes when they are back in the States or Canada. For someone relocating here full time that is not a concern. Cabo is totally safe so a gated community may be overkill for a full time residence. When I’m working with clients who will be moving here full time we pay a great deal of attention to the HOA dues, and analyze that cost versus the amenities and your lifestyle.
About the only other monthly cost I can think of is potentially mail. If you want to receive mail in the States Mail Boxes Cabo is a very cost-effective alternative. For $28 US a month you’ll have an address in Laguna Beach, California; they ship the mail by air to Cabo two or three times a week. MexPost, the Mexican post office is much better than most people give them credit for but it will be slower than Mail Boxes Cabo and you’ll pay a surcharge on your magazine subscriptions.
So that’s the first batch of cost of living parameters. Next up: food and drink. Stay tuned. Your dream can be a reality, and I’m going to convince you that is true!
Carol Billups is Broker/Owner of Cabo Realty Pros. She has enjoyed working with both buyers and sellers for over eleven years and still thinks hers is the best job on earth. She is also the real estate columnist for Los Cabos Magazine. You can read more of her articles on the website blog www.caborealtypros.com. You can reach her from the U.S. or Canada at 1-760-481-7694, or in Cabo at 044-624-147-7541. You can listen to our 24/7 broadcast on http://www.livecabo.net for a mix of happy music, weather reports and local information.
© 2012 Carol S. Billups