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Rosarito Real Estate

Rosarito’s ideal location as a coastal city, together with its bustling beaches, exuberant shopping districts, and active nightlife, has made it a prime spot for a booming real estate industry. Its proximity to the Puerto Nuevo lobster village and the Fox Studios in Baja didn’t hurt either. The city has also become a popular retirement paradise for foreigners, particularly Americans. US citizens currently own around 70 percent of beachfront properties and comprise about one-fourth of the local population. There is a continuing proliferation of the so-called “gated American communities”within the city and in surrounding areas.

Low taxes and favorable conditions for financial investments are some of the factors which encouraged the growth of real estate opportunities in the city. The prices of residential properties are also much cheaper compared with the houses in the suburbs of California. A spot on the Rosarito coast could cost less than US$100,000 while a beachfront property in southern California could fetch a price of up to several million dollars. In Rosarito, two-bedroom condominium units range from US$125,000 to US$300,000. Luxury homes could cost well under a million dollars.

Foreigners who want to invest in real estate in Rosarito must first familiarize themselves with Mexican law. The Mexican Constitution specifies a restricted zone which is 100 kilometers inland from the borders or within 50 kilometers inland from the coasts. This includes most of the Baja California region (Rosarito, Ensenada, and Cabo San Lucas). Within this zone, foreigners are prohibited from buying and owning real estate. However, the government still provides ways for foreigners to hold property in Mexico such as bank trust, land lease, and commercial property.

Under the bank trust or Fideicomiso, an authorized Mexican bank acts as a trustee and purchases a piece of property on behalf of the beneficiary (foreign investor). The bank is not considered as the owner of the property but merely acts as a trustee and is subject to the instructions given by the actual purchaser or beneficiary. The purchaser still holds all the rights pertaining to the ownership of the property. The initial term of the bank trust is 50 years but this can be renewed for additional 50-year periods indefinitely.

In a land lease, Mexican law only allows a lease for a maximum period of 9 years and 11 months. Renewing the contract after the ten-year period is disadvantageous for foreign investors since the landowners can choose to forfeit the second lease and it is perfectly within legal bounds for them to do so. Land lease rents can range from US$160 to US$600.

Foreigners can own land sans a Mexican body as a trustee if they are to use the property for commercial purposes such as hotels, stores, restaurants, and other types of businesses. The businesses must also provide jobs for the Mexican people.

Before investing in real estate, make sure that you hire a reputable broker who can adequately handle the transactions and who will fully explain to you the intricacies of property ownership in Mexico.

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