Real Estate in Cabo San Lucas or San Jose del Cabo?
By: Fletcher Wheaton
San Jose del Cabo or Cabo San Lucas? That is the question. In this article, I will break down both markets so we can finally get a clear answer to this question. San Jose del Cabo has more sales on the MLS than any other market in Baja California Sur, but Cabo San Lucas is close behind in second place. These two sister cities make up Los Cabos, which has a population of 351,000 as of the 2020 census. Let’s jump in and identify which market can better meet your needs.
Cabo San Lucas is at the southern tip of the Baja Peninsula, where the Pacific Ocean meets the Sea of Cortez. Many people mistakenly consider Cabo as “party central.” While this is true of the downtown area, there are many tranquil locations in San Lucas that are great for raising a family. There is also more inventory due to the amount of land in Cabo. Many developers are coming to Cabo to take advantage of the hot market, and I myself am very excited about a few projects coming through the pipeline, so feel free to reach out if you are looking for investment options in Cabo San Lucas. Cabo also offers many areas like Tezal, where ocean views are plentiful and new projects are popping up more often than San Jose.
San Jose del Cabo is a lovely beach town on the Sea of Cortez that is about a 25-minute drive from San Lucas. The downtown area is one of my favorite places in Baja. Here you will find great restaurants, art galleries, bike paths, and historic architecture in the city square. There is less construction happening in San Jose del Cabo, but there are a few new projects worth looking at. San Jose can always get pricey quickly since it is known as a vacation and retirement hotspot. SJ is known as a more laid-back environment for living while most investors tend to look at San Lucas due to more inventory and better pricing.
Which of these cities has a better rental market? This is a tough question because it all depends on the neighborhood and type of property, but I am going to give the nod to San Jose del Cabo. It is very tough to find long-term rentals in both markets. Most people that buy houses or condos for investment purposes tend to rent them out short term. In theory, this will make them more money than long-term arrangements and they can also block out certain dates to use the unit if they want to stay there. Long-term rentals are also hard to find in Cabo San Lucas, but I think it is easier to find a long-term rental in Cabo than it is in San Jose. Also, areas like the Sunset neighborhood in Cabo San Lucas are becoming known as a place to buy “investment” condos. As these condos get built out, you have more and more competition to compete with. The good news is that Los Cabos has, by far, the most expensive average daily rate (ADR) for hotels so short term rental pricing can be set higher than many other destinations in Mexico.
I currently live in Cabo San Lucas and love it here. There are great schools in the area and I have access to some incredible hiking and biking trails just outside of my HOA community. Many foreigners incorrectly categorize Cabo San Lucas as “Cabo San Locos” with a party scene. While that is certainly present, Cabo offers many great neighborhoods to live quietly or raise a family.
San Jose del Cabo offers a more authentic Mexican experience. I much prefer downtown San Jose to Cabo San Lucas. The artwalk on Thursday nights is a wonderful way to enjoy the art galleries, restaurants and family atmosphere of San Jose del Cabo. Most of the buyers that I talk to want to live in San Jose del Cabo over Cabo San Lucas and it’s hard to argue against that. There are many more new developments happening in San Lucas, so the price point tends to be a little cheaper than San Jose, depending on what type of real estate you are looking at.
Cabo San Lucas or San Jose del Cabo? It’s a win-win. You can’t go wrong. Both locations offer a little bit of Mexico mixed in with a Southern California personality. If you’re interested in buying or investing in real estate in Los Cabos, contact Fletcher Wheaton at firstname.lastname@example.org