Luxury homes can be a great investment, especially in destination locations where inventory is low. East Cape, a small region at the southern end of Baja, is experiencing just that. Everyone from wealthy billionaires to red-carpet celebrities are vying for a piece of real estate in the area, but limited inventory is creating a competitive East Cape real estate market.
Investing in luxury homes can be financially rewarding, but buyers have to make the right decisions. For buyers looking to invest in foreign luxury homes, East Cape real estate presents a worthy opportunity.
Why buy a luxury home in East Cape?
Between the ocean views, sandy beaches, yacht clubs, and renowned cuisine, it’s not hard to see why so many people are looking to invest in East Cape real estate.
East Cape, which is located east of Cabo, is a newly developed area of Baja. The area is home to beautiful residences that sit along a swimmable beachfront on the Sea of Cortez, overlooking the Sierra de la Laguna mountains.
While scenery is attractive to buyers, the investment potential of a luxury home is just as appealing.
Many luxury real estate experts, including James Harris, who is also the co-host of Bravo’s Million Dollar Listing Los Angeles, say high-end homes have become a safer investment than the stock market.
“Luxury real estate investments provide higher yields than the stock market without as much volatility,” he says. “Real estate investors in top-performing markets enjoy quick windfalls,” Harris told U.S. News.
Patrick van den Bossche, president of Realty Executives International, agrees.
“One significant benefit of owning real estate is that it will never be at zero value, even in a dismal market, while stocks can plummet to such a level,” Bossche said.
Aside from real estate being less volatile than stocks, Bossche, who also spoke with U.S. News, says high-end property rebounds quickly as well. Since luxury homes are unique, they tend to hold their value even when the market dips.
Tips to buy a luxury home in Baja’s East Cape
Investors looking to buy a property in East Cape will find a small selection of high-end new homes. The high-end market started to flourish a few years ago after the area made significant infrastructure improvements. These include paving roads, remodeling the airport, and accommodating private jet arrival and departures with ease.
Existing inventory might be low, but there are also a number of luxury developments that are offering first-class homes accompanied by amazing amenities that are also of interest to buyers.
To help aid your search, here are a few tips to find the right piece of East Cape real estate to invest in:
Have a goal in mind
How will you use a luxury home in East Cape? Do you plan to buy a mansion, fix it up, and flip it for cash? Do you plan to use the home as a vacation home and rent it out when you’re not using it?
If you’re looking at luxury housing as an investment, rather than a home, there should be a clear goal in mind.
The goal will guide your decision-making process. Buying a fixer-upper is different than a buying vacation home. Know what you want out of the property before you start looking.
Avoid online searches
Buying a luxury home is different than buying a typical home. A growing number of luxury homes aren’t advertised online. Homeowners of this caliber value their privacy and are more likely to employ a real estate agent to spread the word. To make an investment, you’ll need the right contacts as many of the best homes are sold privately.
Get a referral for a high-end real estate agent in the location you’re interested in.
A qualified real estate agent will also know about upcoming developments or residences that are part of a resort family. As an investor, you want to know all of your options.
Research the market
Luxury property can be hot in one area and ice cold in another. In New York City, for example, a glut of high-end condos built along ‘Billionaire’s Row’ are vacant. These vacant condos are softening the luxury market in the city. Meanwhile, in places like East Cape, demand is soaring and there isn’t enough inventory to keep up.
New developments like Four Seasons Residences give luxury buyers the chance to design and build their own seaside retreat along the Sea of Cortez; an intriguing offer for East Cape real estate hunters who value originality and customization.
A qualified real estate agent can provide more details about East Cape’s luxury home market.
Examine local tourism
If you plan to rent out your luxury home or only plan to keep it for a few years, exploring properties in exotic, tourist-heavy locations, like Baja’s East Cape, could be a wise move. Luxury homes located in cities with high tourism rates are easier to rent, and easier to sell when it’s time unload the property.
Buying a home in a tourist area doesn’t mean the home has to be in the center of the action, but it should be close. Offering a respite from city life is attractive to renters and buyers who want the convenience of downtown, but don’t want a never-ending party.
For example, Costa Palmas, an East Cape real estate development, is near the hustle-and-bustle of Cabo, but far enough away to offer a peaceful retreat.
Have detailed financial records ready
To buy a luxury home anywhere, you have to prove that it’s in your budget. Be prepared to show detailed financial records to support an offer made on East Cape real estate.
Gathering the right paperwork can take time, especially since many affluent people make efforts to shelter their money. Speak with your wealth advisor early in the process to make sure financial records are in order.
Investing in luxury properties can enhance an investor’s portfolio, but finding the right home in another country can be a challenge. East Cape real estate is an alluring deal for investors as the location is currently in highly demand. Learn more about East Cape and the homes available on the Costa Palmas website.