President Donald Trump’s “Liberation Day Tariffs” have created a rare buying opportunity in Los Cabos that forward-thinking investors shouldn’t miss. These tariffs on imported materials, particularly steel and aluminum, have fundamentally changed the construction landscape in Mexico, triggering a sequence of market conditions that historically favor early movers.

What makes this moment especially valuable? As developers adjust timelines and reconsider project scopes due to rising costs, we’re seeing the classic supply constraint pattern emerging—fewer new properties entering the market while demand remains strong. This imbalance has historically been a reliable precursor to property appreciation.

The numbers say it all. According to Investor’s Business Daily, while some materials like lumber and gypsum have been exempted, overall building costs have nearly doubled. This dramatic increase means properties secured at today’s prices will likely be significantly undervalued compared to their future replacement costs.

For strategic buyers, this creates a clear time-sensitive advantage: properties available today represent substantially better value than what will be available in the coming years. As these construction cost increases are gradually reflected in market prices, those who acted early will already be positioned to benefit from the appreciation.

Both existing properties and pre-construction opportunities offer exceptional value in this environment. Existing homes provide immediate use at price points that will become increasingly attractive as replacement costs rise, while pre-construction properties allow investors to lock in today’s prices before the full impact of these economic shifts is reflected in the market.

This combination of rising construction costs, supply constraints, and current pricing creates a perfect storm of opportunity for those who recognize the pattern and act before these market forces fully materialize in property values.

Get More for Your Investment With a Pre-Construction Home

Despite the rise in construction material costs, pre-construction properties in Los Cabos still offer competitive pricing compared to ready-built homes. Buyers who commit early in a development phase often benefit from introductory pricing that is still below market value per square meter.

Leading Mexican developers, like those at Tortuga Bay Cabo and Larena, have maintained solid timelines and quality standards despite economic fluctuations. Buyers working with knowledgeable real estate partners gain access to these top-tier builders and benefit from both better pricing and higher-quality construction.

While construction expenses have increased, developers are often willing to absorb some of those costs to meet sales targets, especially during early presale phases. In contrast, resale homes—particularly in high-demand areas—typically carry premiums for being move-in ready and may reflect higher prices due to recent appreciation, furnishings, or rental income history.

This dynamic makes pre-construction particularly attractive to investors and second-home buyers seeking long-term value. Not only can you lock in a lower price point, but you also stand to benefit from future equity gains as the development nears completion and the surrounding infrastructure matures.

If you’re planning to hold the property for rental income or future resale, this upfront value can translate into stronger long-term returns.

For more information, see our complete guide on buying a pre-construction home in Los Cabos.

Strong Rental Income Potential After Delivery

Los Cabos boasts one of Mexico’s best Airbnb markets, offering excellent income potential for property owners. Average nightly rates currently sit at $372.55 USD in Cabo San Lucas and $402.25 USD in San José del Cabo, making it one of the most lucrative regions for vacation rentals.

Tourism continues to grow steadily, particularly among international travelers, remote workers, and digital nomads, despite broader economic fluctuations elsewhere. Demand for high-quality rental accommodations remains strong year-round, with seasonal peaks commanding even higher nightly rates. For investors seeking a property that can generate consistent cash flow after delivery, Los Cabos could be your ticket.

Keep in mind that properties in prime locations near beaches or within resort developments command the highest rental rates and maintain high occupancy levels throughout the year. The region’s established property management ecosystem makes this opportunity even more accessible—professional management companies handle everything from marketing to maintenance, allowing for hands-off ownership while maximizing returns.

For investors, this creates an attractive scenario: secure properties at today’s favorable pricing while gaining access to a rental market that has consistently demonstrated its resilience and growth potential. This combination of current value and future income opportunity makes Los Cabos an especially attractive market in 2025.