Why I'm More Bullish Than Ever on Cabo

In this episode of Notes From the Field, Ronan McMahon checks in from Cabo with a broad market update after two weeks back at his base in Baja California Sur.

From surging rental demand and tightening inventory to delayed but increasingly compelling deal flow, Ronan explains why he’s more bullish than ever on Los Cabos—and why the wider region, including Todos Santos and La Paz, continues to gain strength.

Episode Description

Broadcasting from Cabo as the sun rises over the Pacific, Ronan uses this dispatch to reflect on what he’s seeing on the ground in one of the most dynamic markets on his beat.

His first takeaway is clear: rental demand is exploding. Both short-term and long-term inventory are under pressure as Cabo attracts a new wave of residents and visitors—remote workers, younger families, extended-stay renters, and lifestyle buyers rethinking where and how they want to live. What began as a tourism recovery story has evolved into something broader: a structural shift in demand for well-located, well-designed homes in one of North America’s most appealing sun-and-sea destinations.

Ronan also explains how the market itself is changing. At the lower and middle end of Cabo’s typical price spectrum, the shortage of quality condos has become especially acute. The sweet spot—two- and three-bedroom homes with views, strong amenities, and access to town and beaches—is exactly where demand is strongest. In his view, that reinforces the long-term value of the same type of inventory he has consistently targeted for RETA deals.

He also shares an update on delayed Cabo opportunities that remain in the pipeline. Though permitting and water issues have repeatedly slowed launches, Ronan says the underlying economics have only improved. Comparable inventory has moved higher, market demand has strengthened, and the price points he is targeting still look extremely attractive by Cabo standards.

Beyond Cabo San Lucas and San José del Cabo, Ronan turns to the broader Baja story. In Todos Santos, he sees a maturing boutique market increasingly reminiscent of early Tulum—high-end, design-driven, and deeply appealing to sophisticated travelers. In La Paz, he sees a quieter but increasingly attractive waterfront city benefiting from better security, stronger public spaces, and growing long-term potential.

For Ronan, the message is simple: Cabo and the broader Baja market are not cooling off—they are gaining momentum. And despite ongoing infrastructure constraints, the combination of weather, proximity, lifestyle appeal, and relative value continues to create one of the strongest long-term stories anywhere on his global beat.

In This Episode

Ronan covers:

• Why rental demand in Cabo feels stronger than ever
• The shift from older vacationers to remote workers, families, and long-stay renters
• How long-term rentals are reducing short-term inventory
• Why the sweet spot in Cabo remains quality two- and three-bedroom condos with views
• How values have moved higher in communities like Copala and Mavila
• Why delayed deal launches may now be even more compelling than before
• The role of private aviation, resort growth, and flight connectivity in supporting demand
• Why Cabo still offers strong value relative to California and major North American markets
• The growing appeal of Todos Santos as a boutique luxury destination
• Why La Paz is becoming an increasingly attractive weekend and second-home market
• How infrastructure and water constraints may slow growth—but also support scarcity and pricing

Key Takeaway

Cabo is no longer just a vacation market. It is becoming a deeper, more durable lifestyle market driven by relocation, longer stays, remote work, and persistent inventory shortages. For the right kind of property, that creates a very powerful setup for both renta

Transcript

SPEAKER_00 0:16

Hi, Ronan here. Welcome to your notes from the field. This is where I bring you my latest boots on the ground research, research, observations, and intelligence, all that flows into opportunities for for you and for us to to profit from. And I'm here at the Cabo Sun is rising above a flat Pacific. There's a a lovely hint of coolness to the air. So last week we last week the weather warmed up. I had to crank up the air conditioning a couple of afternoons. And that felt that signaled to me that it was time to move east and head to Europe for the the remainder of the spring and the summer. But this morning and this week again, the weather is just perfect for me. It's that mid to high 70s in the middle of the day. Mornings and evenings are cool. The weather here is just perfect for me for a good six to nine months of the year. And you know, that's one of the big things that makes it such a compelling vacation and second home destination. And one of the things that feeds into feeds into our opportunity here is that you know for for me for nine months of the year, the weather here is is as close to perfect as as as I can get, and that's important to me. So on Monday the 26th, I fly to the Riviera Maya. I love boots on the ground in Tulume and Playa del Carmen, putting the finishing touches to our next opportunities there. And on the 1st of May, all going well, I jump on a direct flight from Cancun to Lisbon. And then for May, I'll be at my base north of Lisbon, my Silver Coast base. So this is a very fitting moment to reflect on on Cabo, to reflect on our opportunity in Los Cabos and also in the surrounding areas like Todos Santos and La Paz. So I guess first of all, where's the market at right now? So right now I'm seeing I'm seeing two things. I'm seeing an explosion in in rental demand, both short term and long term. So when when when COVID and when the pandemic hit, that significantly slowed the travel of older older second home and vacationers, those were replaced with a new breed of younger remote remote worker type. So you know, I guess after the initial, you know, lockdown period when things opened up, um and when and when I got back here late October since then, it's it's largely been pretty busy, but with a different type of visitor and customer. So the the example I've been using a lot is that you know, 14 months ago here in Kopala, if I were to go to a cocktail party, the the age profile would have been, you know, that typical kind of retiree age profile. Now, today, um, as I'm recording this, it's 7 a.m. and the gym is packed, the gym here is packed with 20 and 30 something year olds. Um, there are families here with with young kids. There are people who move down because their business was forced to close and they need to write it out. There are people who move down here because they're remote workers and they can work anywhere. Um, there are people down here because really they this whole thing has just kind of shone a light on the unnecessary and futility of so much of their costs and energy draining time and traffic and and commuting. So there's this big sense of there's another way, there's a better way, is palpable and and people are actioning it. And now in in the last few weeks, and I guess this is particularly acute given that we've just had the the Easter holidays here, so we've had spring break and Easter holidays, but it just feels full, rentals just feel full. Um I'm not fully clear yet in terms of what the kind of the hotel occupancy numbers are are running at. Um but from a long-term and short-term rental perspective, um here it's it's just full. And it's really, really interesting just to kind of observe at a micro level, even within our community here, how things have changed. For example, one owner here who who's got a portfolio of rentals here here in the community, this person has started reaching out looking to rent homes from other people that they would then make available for short-term rentals. So, you know, this is the kind of the typical type of thing you you you see in a strong market. So you have someone with their own um robust rental portfolio, and now they've more customers than than inventory, so they're trying to trying to get more more inventory. We've seen this big influx of of long-term renters. So, I mean, long-term renters do two things. They they push up demand for long-term renters and pushing up the prices, and also they take inventory from from short-term rentals. So we we we're seeing this, it's almost like a pop moment where a number of things are happening at the same time. Those things mean more customers um and less inventory, less inventory on the short-term front. Um, I've decided to rent my condo long-term for the for the next six months. Um the the market rate for a long-term rental for a two-bed, two-bath here is in the region of 2,400 to maybe as high as 2,700. Um, I'm renting for $1,800 a month just because a friend of a friend was looking for a rental, and I'm always happy to go below market when renting within that kind of more friendly circle, just because at this stage in my life, I don't have the the time to be to be actively managing. You know, ultimately, um, and I guess this is just kind of noteworthy in terms of a strategy that you know, many of us build our portfolio um while we're working and while we're busy, but ultimately this portfolio will then become an income stream and a business down the line. So, you know, how I operate my rental portfolio today is very different to how I'll operate it down the line, because when I don't have you know all these commitments of um of of work and and travel, then I'd be fully engaged with you know maximizing the return from the maximizing the income from my portfolio, but now I'm focused on the the acquisition side of the equation. So I'm very happy to take a bit below market if it means a low hassle situation. Also, the the market here in Calabo is extremely is is is extremely strong. Um you know there's been some degree of flux again because you know there are people who bought homes here and because of because of because of COVID and because of the crisis, and you know, there's quite a few people who just decided that they're not coming back, or it just kind of marked a change in their plans, in particular for for older people. So there was some level of flux where there was inventory coming on the market because people's um people's life changed, or people's life is changing, and that that inventory was largely slapped up pretty fast. I was looking around, looking for bargains, I found pretty much no bargains, that there was always buyers for for good stuff. And also another kind of interesting observation, again, just about here in Copala, that before I left, um so I left here last June, and before I left, I was looking at some of the nicer homes in the community that had golf and ocean views. Those were listed at those were listed for just pushing a million. A million was kind of the ceiling within the within the community. Um I was getting ready to do some lowballing. Um none of my advances about lowballing were in any way being entertained. I said I'd let it play out, and by the time I came back here, that ceiling had risen to 1.2 million. So now there's an active, or there's at the top end of the market within Kopala is is above a million. So again, that's just an interesting observation that you know things things can take, things can take twists and turns in all sorts of directions. Um across Cabo, there is across Cabo San Lucas, there's there's a shortage of inventory in what would be the kind of the lower price point for Cabo. So Cabo is a significantly higher price point to the Riviera Maya. Um condos tend to be bigger here and also more expensive on a per square foot basis. So the kind of the the entry mid kind of part of the market is in that kind of three, 300, 350 grand to you know, pushing 800 to a million, and that portion of of the market has been extremely hot with extreme extreme inventory pressure. Um so just just not enough, not enough condos that kind of tick those boxes of two bed, two-bath, maybe three bed, ideally three bed, three beds, you know, growing in popularity now because of the need for for home office. Um two-bed, two-bath, ocean view, nice community near town. Um there's a a real shortage in that in that sweet spot, which I guess is is is comforting and reassuring because that's the the sweet spot that that I've been targeting for for our Rita deals. Um unfortunately the the two or three Rita member only deals that you know where we're going to have those attributes, we're gonna have that two-bed, two-bath condo with great great ocean views, and we're gonna be getting in at a price point, in one case under 200,000, in another case under 250,000. Um those deals that that I've been working on just have been excruciatingly slow to get over the line. And again, this this is this is interesting because when once once those deals or one of those deals do get over the line, all the other projects still have to deal with this very, very difficult permitting and and and water environment. But we're we're I I I feel like I keep saying this, and and I am, and I feel like we get closer, and then we're we're we're we're nearly there, and then there's something else that pushes it back in another month or so. But we're really getting very, very close to um to our first cabo deal in in about 18 months, and it's going to be right into that kind of that that sweet spot of two bed, two bath, great views. We'll be buying at Rita member only prices starting in you know just under 200 or low mid-200s, and we'll have condos then that you know the kind of the comps on the the retail market are are are north of north of 350. So I'm very excited with the way those projects are progressing. I'm frustrated and disappointed that we haven't been able to launch it yet. Um, but I'm more optimistic than ever that they're they're going to be stronger than I even originally anticipated by the time they come to market, which I hope will be in the will be in the in the next couple of in the next couple of months. You know, the the track record here continues to be extremely strong. You know, Rita members who bought homes here in Kopala are sitting on gains of as much as $300,000 plus Armavila opportunity from from I guess two years, two or two or three years ago now, Rita members could get in there from about $258,000. Now the entry, now the equivalent entry point is you know into the mid-high 300, so pushing, pushing 400,000. And again, what why I like these plays, and I think this is a very important observation that's that's transferable to all our Rita beats, is that here we can get the appreciation from say $258,000 to $380,000, and still at $380,000, it's a pretty good deal. You know, you're you're you're not getting to the point where where that feels very, very frothy, like uh uh one of those spacious, comfortable Mavila condos for $380,000 that's on the market today is is a good deal by cabo standards, and and I understand they're they're they're selling well. Um again, just another interesting observation from right here, right in front of me. There's a new St. Regis Hotel and Residences flying up. There's going to be condos there starting at about 2.9 million and homes in the 9 to 12 million dollar range. Excuse me. So one thing's for sure, you know, the the the rich aren't hurting in this crisis, and going through the the Los Cabos airport, it's just been incredible just to see the explosion of the private jet's parking area. So when you fly into Los Cabos, you know, many of you have done it, you'll always see there is a an extensive and impressive collection of private jets. This private jet's car parking lot literally started spilling out onto the main runway. So during during the the past six months when when I've been here on several occasions, because there also I guess because there have been less commercial flights, the areas where the big commercial jets usually pull up where you might where you might see a line of air Alaska flight. Now they were literally just parking private jets because they needed needed space for for for the private jets. So um the top end of of that market again, this has been just another another accelerator. Um so macro story um I'm more bullish, significantly more bullish than ever, um, about the prospects for lost cabos. Um so just before just before um COVID hit, there was this surge of new flights being added. Um I hear those flights that were taken off are going to be reinstated in the near future. The the word is very positive about about air connectivity. Another thing happened during during COVID, and that is that there was a concentration of of flights into the major tourist and sun hubs. So this meant that airlines had a had a preference to, for example, run a direct flight from New York to Los Cabos rather than connecting New York and through a hub in Atlanta and from there on to a myriad of destinations. The market wanted more point-to-point rather than rather than flying through the major hubs, just for obvious reasons, everyone is a lot more comfortable with a point-to-point flight. So, what this meant was that what flights were happening became much more concentrated into a small number of destinations like Cancun, Los Cabos, Puerto Vallarta, and um this feels like the the the word is that that this is also here to stay, that this extra connectivity, and in particular with the with the likes of New York, will will will stay. So, you know, the the big barriers to to Los Cabos really exploding and really taking off, you know, continue to be the the water situation, um, and also general general infrastructure is is behind where where where you'd expect, certainly around Cabo San Lucas, and then as you go go along to to to to Todo Santos. Um so the the water is a big issue, there's plans. for another D sal plant, but this is going to be a game of guacamole. Water isn't keeping up with with the development needs in in Los Calabos. I mean it would be it would be fabulous if they could figure out some kind of long-term solution but there probably isn't the the capacity or the the the will to do that. So I suspect we'll continue to see a kind of a game of whack a mole of there being a water crunch and more D sal added. So that that that is a challenge but the the core the like the the core kind of value proposition of what what here has is incredible. It's got such easy and proximate flight access to the the major population centers of of of North America. It's got that amazing weather nine months of the year and it's just got incredibly just this incredible natural beauty that's you know that's that's very very different to very different to to pretty much well to to anywhere I've been certainly where you've got these fields and steep slopes of of cactus rolling down to white sand beaches on the Sea of Cortez side you've got that pristine glass flat blue water kind of shades of shades of the Greek islands and then just to come to the the Pacific side of the arch where where I am here and while this morning the Pacific is is flat it's it's usually wild and and loud. So you just have incredible variety and you've got the the the the all the the the infrastructure for that five star plus resort experience you know there's dozens or a dozen plus super high end resorts where you've got you know all your excellent and high end golf experience and that the the full resort experience and then you've got you know you've got the the boutique hotels and you've got the farm to table hotel and vacation experience in in the areas where there's water like like around Acre and Flora's Farm just behind um just behind Puerto Los Cabos and also along the coast in Pescadero and and and todo santos so you've got the kind of the foodie boutique market is growing you've got the surfer market you've got the people looking for sun you've got people looking for hiking and adventure so there's so this part of Mexico you know has in in in my opinion it's got the the the ingredients to rival the you know Cancun and the Riviera Maya in terms of tourism numbers and and destinations and ultimately that will will will happen over time. It'll just take a bit slower primarily because of the infrastructure and and water deficit but when we look at what that does to to to to real estate values it's really really very powerful and compelling because you know you can still get those ocean views. So you know now is the time when you can still get into Cabo and and get those ocean views at those types of price points that we're talking about in retail like in these upcoming deals with price points in the range of 200 to $25000 you can get a fabulous comfortable condo with your terrace in your bedroom overlooking you know those Sea of Cortez views and where you can have your community pool area that has like just just these these these stunning stunning views so you can still get in and get that you can still get those killer cabo ocean views at let's call it that that ordinary price point and as the market grows and as that takes off you know that will become that will continue to become a scarcer and and scarcer commodity and will just become more valuable. Another thing about the prospects for the the cabo market is that it's so it's a market that's so strong in extremely high price real estate market. So it's a it's a market that connects very well with um the the big cities in in Texas and California and the west coast of Canada. So again you've got people your market is in a place where a million dollars gets you a shoebox of a of a condo so that's really powerful in terms of the anchoring and the the value proposition you know when when I golf with visitors here from who are coming from from San Francisco are people who who who have come down here and are remote workers and you know I tell them you can buy a a two-bed condo here for $5500 for them that's a a really really low sticker price they they actually find it quite shocking. So that's a an important piece of the the the dynamic too is that the market that we're targeting whether it be both for for rental or resale the price points that that the the that we're buying at you know even these retail price points are are are are silly cheap. So I'm extremely bullish about about about Cabo I'm excited about those deals and to to to broaden it out you know just along the coast so just Todo Santos is but you know it's literally just 45 minutes from where I'm sitting here we've got a new back entrance to the community that takes me out onto the the highway and I can be in Todo Santos in maybe 50 minutes pescadero in in in 40 minutes and out there what's happening is is is is really interesting. Flora's farm was the the pioneer in this regard and Flora's farm is a farm to table restaurant just outside um outside San Jose del Cabo just behind Puerto Los Cabos and they've been hugely successful at attracting celebrities and the and the jet set and their their product I guess is being replicated and I I really feel in many cases kind of improved upon in these areas around Pescadero and and and and Todo Santos so you see you know Todo Santos is almost like what Tulume was to the Riviera Maya you know three four five five years ago it was um a bit you know ahead of things um a bit kind of niche but also very very high-end niche you know that to Todo Santos attracts a very kind of sophisticated type of type type of type of clientele and we see that in the in the kind of the continued development of of boutique hotels and um and just kind of general tourism experiences. I'm looking for a for a rental you know I've been I'm I'm hoping to or I'm planning to spend next weekend just before just before I leave for um for for for Cancun um with family in a house on the beach in either Toto Santos or La Paz area and I just can't find anything just everything is booked and if you can find anything you know for for a home that's beachfront but not fancy um so you've got a a home that was maybe built 30 40 years ago it's it's not fancy but it's right on the beach or a short stroll to the beach and these tend to run now you know kind of $800 per night up to any number. So that you know they're they're they're extremely heavily booked and extremely high high high nightly rates. So that opportunity still exists in in in Todo Santos to get a piece of land that's that's relatively close to the beach that's got that's got great views and walking accessibility to the beach and build a home that's got four or five bedrooms plus a pool and the type of home that will work for a group of friends are are or a family group coming and those those homes are just a scar a scarce commodity and you know I figure I figure some of the some of the homes I've seen along there you know are kind of our grossing you know $1500 a year comfortable and again the the again don't get me wrong the these are not your super luxury Cabo homes. I mean there are there are homes in Cabo that rent for $2000 per night plus I'm not talking about that level of home I'm talking about a comfortable home for for a weekend at the the the the the the the beach somewhere with an okay pool where you can sit out and and look at the ocean so you can get really really high rental rates from something that isn't isn't isn't super luxury if you can accommodate that kind of group which is typically a family group and but it can also be a be be a group of friends and also these are growing in in popularity again with you know with with when when people can just up and leave you know I'm just seeing this trend more and more people people can take a week's vacation but they come for a month or they come for six weeks and they take their week's vacation and then they work from home in the in the house on the beach for for for the remainder. So all these things that we've been talking about so much all these these accelerators are are are just visible and you know that's before this like this grey tsunami this before the the the throngs that have been been you know have been waiting until they can get vaccinated to travel. So once those floodgates open when when we open the floodgates of of older people who are now vaccinated and pent up demand on travel and we add that layer that on top of the accelerator of everything else that's happening in the world it's you know it's it's really quite you know it's it it's going to be bedlam out there. And then the other thing that I think is going to really feed into our opportunity is that my expectation is that a lot of people will vacation at home in the US and Canada this year and they will have a really bad experience because it's going to be so busy and it's going to be so expensive and that's going to be another push factor that's going to drive people to to to look for look for alternatives. And it sounds like it's an absolute it's it's an absolute bloodbath from a marketer's perspective because there's so many people bidding for that traffic for those travel search terms the prices are going through the roof. So you know there is I I expect we're just going to see this huge spike in in in rental rates shortages of of of availability and the other thing too playing into this in in Cabo is that there have been projects that have been hotel and residential projects that have been stalled during this this COVID period those are springing back now that means they're gonna be bringing in all those golf pros, semeliers, IT people, accountants, professionals all these people need schools for their kids, doctors and dentists so we'll just see this this this overall uplift of that kind of that professional class here who also want to live in live in live in these in these same places and then to to to end our kind of our our our journey um la Paz has really la Paz which is the state capital which is on the the Sea of Cortez side about two hours from here so Toro Santos is about halfway between me here and um and and La Paz. La Paz had had pretty significant security problems which have dramatically improved over the past three years and this improvement has also happened at a time when there've been big improvements to the city and to the public spaces and to the MalaCon and it is just an absolutely charming quaint quiet waterfront town now it really is it really is one of my favorite places to to go for a weekend so one of the great things about about living here in Los Cabos and in Cabo San Lucas is that you know in an hour I can go to Todo Santos and go there for the for the weekend and on this period I had I guess two or three weekends in in in Todo Santos. La Paz is two hours away and La Paz is a whole different experience it's the this the flat sea of Cortez and it's absolutely beautiful and I've had two weekends there as as well so you know when you're here you've got that kind of travel experience options on your doorstep as well and you know that's that's great for for me personally in terms of my choice of of base but again I'm always thinking and you should be too what this means for for for our investments and this means again this all feeds into the into the the the opportunity but La Paz has you know just come on no end it's just a a fabulous place to visit I'm on the lookout for the for the right opportunity there too um the and I I see a very strong and bright future for La Paz again once the security situation stays stays stays quiet as it is but you know we're gonna see we're we're gonna just see development and tourism and everything just just move around the the the Baja because to a large extent you know the Los Cabos of San Jose del Cabo and and and Cabo San Lucas you know Cabo San Lucas is you know I mean it's in many ways the the the the the town certainly isn't the most attractive thing in in Baja California sewer you know it roads are bad it's noisy it's a party town um you know it it it it is what it is it's where we're where I've chosen to to call base but it's not like that's all that that the area has to offer you know to some extent I think again the kind of the Riviera Maya comparison is is is is is very apt in that you know you've got Cancun and Cancun is what it is and then you've got Acumal and you've Tulum and you've Solomon Bay you've got all these different things and as word gets out again like the the Riviera Maya the kind of the the gateway experience in in Baja California Sur in Los Calabos will be these big resorts which do an incredible job of giving that high-end resort experience and and they're beautiful but we know people will will will want more you know we know that that's your dipping your toe experience and then you'll realize how beautiful it is and then on your first trip you'll take a day trip and you know before you know it you're renting an Airbnb. So it's it's just these big resorts do an do a really really strong job of creating leads for us in the in the the the rentals and investment side of things and it's exactly what we've we've we've we've seen on the on the on on the on the Riviera Maya. So there there you have it and I'm more bullish than ever about the the the overall market here and you know I just saw I've just seen a couple of brokers post on their social media in the last couple of days how their how their Q1 sales are off the charts and our market our niche you know that sweet spot you know I've I've I've I've held firm um waiting for those projects that fit those criteria which is we can buy get really great two bed two bath condos with those with those views in that 200 to 250 grand price point and these condos would retail easily now in the in the three 350 grand up bracket so that that that's our niche that's our market um knock on wood and water and final pieces of paper this will be will be will be will be coming at you you you imminently um you know it's been it's been disappointing for for for all of us i you know one of these deals is now 18 months behind where you know when when I hoped it would be the reason for that was a change in the rule around permitting which meant a whole process had to start again these things happen. Think that the most important thing from our point of view as investors is that we we stick to our guns and stick to our strategy. And for me, it's to buy this type of inventory in this type of price point. And you know, if it means it takes a bit longer for the right deal to come, then so be it. I'd prefer to wait rather than rather than move my criteria or lower the bar for a Rita members only deal. So thank you. So thanks again. Take care and happy scouting.