El Tezal is the most active condo-development corridor in Cabo San Lucas right now. With sub-$500K entry pricing, elevated ocean views, and 17+ projects under construction, it is producing the highest projected 2026 appreciation (7-10%) and the strongest cash-on-cash yields in Los Cabos.
Key Takeaways
- ✓ El Tezal entry pricing: studios from $185K, 2BR from $271K-$380K, premium 3BR to $500K+
- ✓ 17+ active condo developments — the largest concentration of new-build inventory in Cabo
- ✓ Projected 7-10% price appreciation in 2026 — the highest in Cabo San Lucas
- ✓ Gross rental yields of 9-13% versus 4-6% in Pedregal and Palmilla
- ✓ 5-10 minutes from Costco, Home Depot, Walmart, the Marina, and the Tourist Corridor
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Schedule a Free Consultation1. Where El Tezal Actually Sits on the Map
El Tezal is the hillside zone between downtown Cabo San Lucas and the Tourist Corridor. It runs north of the Libramiento (the bypass highway around Cabo) and east of the Cabo Marina, climbing the foothills that face the Sea of Cortez. Most lots sit at elevations of 100 to 400 feet, which is why nearly every project markets ocean views.
The practical geography matters more than the marketing. From an El Tezal condo, the drive to Costco, Home Depot, Walmart, and Soriana is 5 to 10 minutes. The Marina district is 8 to 12 minutes. The San Jose del Cabo airport (SJD) is 25 to 35 minutes. Medano Beach is 10 minutes. That logistical math — proximity to Cabo's daily-life anchors — is what makes El Tezal attractive to both owner-occupants and short-term-rental investors. Guests don't want to be 40 minutes from a margarita.
2. Why El Tezal Is the 2026 Growth Story
El Tezal is producing the highest projected price appreciation in Cabo San Lucas for 2026 — 7 to 10 percent according to TheLatinvestor's 2026 Cabo San Lucas Price Forecast. The reason is simple supply-and-demand math.
Cabo's overall buyer demand has stayed strong through 2025 and into 2026, but the legacy luxury zones (Pedregal, Palmilla, Querencia) have effectively no developable land left. New-build inventory has shifted to the only place in Cabo San Lucas where developers can still acquire entitled hillside parcels at scale: El Tezal. The result is that 30 to 40 percent of all active condo listings in Cabo San Lucas are now new-build, and a disproportionate share of them are in El Tezal.
3. The 17+ Active Developments Right Now
Below is the working list of El Tezal projects currently in pre-sale or active construction as of mid-2026. Pricing is starting price for the smallest unit in each project; expect a 15 to 35 percent premium for ocean-facing or upper-floor units.
| Development | Status | Starting Price | Unit Type |
|---|---|---|---|
| Solaria (Kaab) | Pre-sale | ~$295K | 1-3BR condos |
| Cuatrovientos | Construction, 4 towers | $200K-$515K | Studio to 3BR |
| Tramonti Paradiso | Pre-sale | ~$310K | 2-3BR condos |
| Casa Adobe | Construction | ~$285K | 2BR boutique |
| Rivieri Pueblo Mediterraneo | Construction | ~$340K | 2-3BR Mediterranean |
| Cumbre del Tezal | Delivered phases / new phase | ~$265K | 1-2BR condos |
| Vistas del Tezal | Active | ~$280K | 2-3BR condos |
| Nahara | Pre-sale | ~$320K | 2BR ocean view |
| CIAN El Tezal | Construction | ~$310K | 2-3BR condos |
| Lumaria El Tezal | Pre-sale | ~$295K | 1-2BR condos |
| Damiana Residences | Pre-sale | ~$330K | 2BR condos |
| Monte Rocella | Construction | ~$345K | 2-3BR condos |
| Marazul El Tezal | Pre-sale | ~$305K | 2BR condos |
| Dream Tezal | Pre-sale | ~$275K | 1-2BR boutique |
| Oceana Wellness | Pre-sale | ~$365K | 2-3BR wellness-themed |
| Cabo del Mar (Ventanas Phase 4) | Construction | ~$385K | 2-3BR condos |
| Ventanas Residential Phases 1-3 | Delivered / resale | ~$260K resale | 1-3BR condos |
This is the most active condo-development corridor in all of Los Cabos right now. Compare it to the Corridor (Palmilla, Chileno Bay, Querencia), which currently has fewer than half as many projects under active construction at this price tier.
4. The Rental ROI Math That Beats Pedregal
The investment thesis for El Tezal lives or dies on cash-on-cash yield. Here is the working math for a $350,000 2BR El Tezal condo versus a $1,500,000 Corridor luxury property, using realistic 2026 inputs from AirDNA's Cabo San Lucas market data.
| Metric | El Tezal 2BR Condo | Corridor Luxury Villa |
|---|---|---|
| Purchase price | $350,000 | $1,500,000 |
| Avg nightly rate (ADR) | $220 | $680 |
| Annual occupancy | 62% | 48% |
| Gross annual revenue | ~$49,800 | ~$119,000 |
| Operating expenses (40%) | -$19,920 | -$47,600 |
| Net operating income | $29,880 | $71,400 |
| Cash-on-cash yield | 8.5% | 4.8% |
| Gross yield | 14.2% | 7.9% |
| 2026 projected appreciation | 7-10% | 3-5% |
On an absolute-dollar basis, the Corridor villa wins — it produces more income. But on the metric that actually matters to investors deploying capital efficiently — return per dollar invested — El Tezal nearly doubles the Corridor's yield, and with materially higher projected appreciation.
A few honest caveats on these numbers. First, the Corridor's ADR is partly suppressed by larger property size and longer minimum stays; per-bedroom revenue is closer than top-line numbers suggest. Second, El Tezal occupancy depends heavily on professional management — DIY hosting will produce 10 to 15 percent lower occupancy. Third, the cited AirDNA-style numbers represent a 44% market-wide Cabo San Lucas annual average; well-managed, well-photographed properties consistently outperform.
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El Tezal, Pedregal, and Palmilla each appeal to a different investor profile. The mistake is comparing them apples-to-apples — they are not interchangeable products.
Pedregal de Cabo San Lucas is the legacy luxury address: cliffside estates, $1.5M to $15M, established short-term-rental management infrastructure, brand prestige. The upside is stability and absolute-dollar appreciation. The downside is yield compression — at $5M, the property simply can't rent for enough to produce double-digit cash-on-cash returns.
Palmilla (and the broader Corridor) is the resort-residence play: Auberge, One&Only, Montage branded residences, $1M to $29M. Buyers are paying for the brand, the golf, and the resort amenity access. Rental yields are similar to Pedregal — 4 to 6 percent — and the buyer is typically not solving for yield.
El Tezal is the value-and-yield play. Investors here are typically deploying $300K to $500K of equity (often via U.S. cross-border financing or 1031-equivalent strategies) and care about IRR, not branding. The category as a whole is producing the largest pre-sale velocity in Cabo right now. As TheLatinvestor's 2026 Cabo San Lucas Market Analysis notes, new-build represents 30 to 40 percent of active condo listings in Cabo San Lucas — and El Tezal is the epicenter of that supply.
6. How El Tezal Pre-Sale Contracts Actually Work
If you've never bought a pre-construction condo in Mexico, the contract mechanics are different from a U.S. pre-sale and worth understanding before you wire deposits.
- Reservation deposit: Typically $5,000 to $10,000 USD to hold the unit while the formal purchase contract is drafted. Refundable if you walk before contract signing.
- Initial deposit: 20 to 30 percent at contract signing (the contrato de promesa de compraventa). This is usually held in an escrow account at a Mexican bank or U.S. title company.
- Construction draws: Some projects collect another 20 to 30 percent in scheduled milestone payments during construction. Others collect the full balance at closing.
- Closing balance: 40 to 60 percent due at delivery, payable via fideicomiso (the Mexican bank trust required for foreign buyers in the restricted zone).
- Discount for cash buyers: Most El Tezal developers offer 5 to 12 percent off list for buyers who pay 100 percent at signing. The discount is meaningful enough that it often beats financing math.
What can go wrong: construction delays of 6 to 18 months are common in Cabo. Build your underwriting around a delayed delivery. Verify the developer's track record on prior projects, confirm the land title is clean before signing, and use a Mexican real estate attorney — not just the developer's notario — to review the purchase contract. AMPI-affiliated agents are required to maintain ethics and disclosure standards.
7. Who Should Buy in El Tezal (and Who Shouldn't)
El Tezal is the right call if you are a yield-focused investor deploying $300K to $600K of equity, a snowbird who wants a Cabo base without paying Corridor prices, or a buyer building a 1031-style exchange portfolio of cash-flowing short-term rentals. The proximity to Costco and the Marina, the new-build construction quality, and the 7-10% appreciation outlook make this the highest-IRR play in Cabo right now.
El Tezal is the wrong call if you want walkable beach access (El Medano and the Marina are 8 to 12 minutes by car, not walking distance), if you want brand-name resort residences with concierge and on-site spa, or if you need the social scene of Pedregal or Palmilla. Buyers solving for prestige rather than IRR should look at Pedregal or Palmilla.
8. The Risks Nobody Mentions in the Sales Office
Sales offices will not volunteer the downside scenarios. Here they are:
- Short-term rental regulation: Baja California Sur has tightened STR registration and tax compliance enforcement through 2025. Hotel tax (3%) and IVA (16%) must be collected and remitted. Non-compliance fines have increased.
- HOA fee creep: New-build HOAs often understate fees in the first 12-18 months to make pre-sale economics look better. Build a 30-50% HOA increase into year 3 underwriting.
- Supply absorption risk: With 17+ projects delivering between 2026 and 2028, the El Tezal condo market will absorb roughly 1,500-2,200 new units. Demand has stayed ahead so far, but a soft 2027 tourism season could pressure ADR.
- Developer financial risk: A few El Tezal projects in past cycles have stalled mid-construction when developers ran out of pre-sale capital. Verify developer track record and pre-sale absorption rate before signing.
- Currency risk: Mexican peso volatility cuts both ways. Your USD-denominated rental income is stable, but Mexican peso construction-cost inflation can pressure HOA fees and operating costs.
None of these kill the thesis. They just need to be priced into your underwriting.
9. Financing the Deal: Cash vs Cross-Border
Roughly 80 percent of Los Cabos foreign-buyer transactions close in cash, but the financing options for El Tezal pre-sales have improved meaningfully in the 2024-2026 cycle. Here are the three main paths.
Cash. The dominant path. Best for buyers who already have liquidity and want to capture the 5-12% cash-buyer discount most El Tezal developers offer. The discount alone often beats financing math on a five-year hold. Cash buyers also close 2-4 weeks faster, which can matter on competitive pre-sale releases.
U.S. cross-border lenders. Specialty lenders like Global Mortgage, CrossBorder Capital, and a handful of U.S.-based private lenders now finance Mexican coastal real estate at 50-65% LTV with rates of 8-11%. The underwriting is faster than Mexican bank mortgages and the lender understands the fideicomiso structure. Closing costs run 3-5% of the loan amount.
Mexican bank mortgages. Scotiabank, BBVA, and Santander offer mortgages to foreign buyers at 50-70% LTV with rates of 10-13% and longer underwriting timelines. Best for buyers who already have a Mexican banking relationship. Not typically the fastest or cheapest path for pre-sale purchases.
One financing-adjacent strategy worth knowing: developer financing. Several El Tezal projects offer in-house payment plans — 30% down at signing, scheduled milestone payments during construction, and the balance at closing — with no interest charged on the construction draws. This isn't a mortgage; it's a payment schedule. But for buyers who can't or don't want to deploy 100% cash up front, it's effectively zero-cost short-term financing.
10. Property Management, Taxes, and the Real Operating Math
Underwriting cash-on-cash yield on paper is one thing. Hitting the numbers requires operating discipline. Here's what actually shows up in the P&L on an El Tezal short-term rental.
- Property management: 20-30% of gross rental revenue for full-service vacation rental management (listing optimization, guest communications, cleaning coordination, maintenance dispatch). The good Cabo managers — Casago, El Cap, Vista Cabo, Cabo Platinum — are worth the spread.
- Cleaning: $60-$120 per turnover, typically passed through to guests as a cleaning fee but worth tracking.
- HOA fees: $250-$650/month for typical El Tezal projects. Pool, security, gym, sometimes water and trash. Verify what's included before signing.
- Property tax (predial): Mexico's predial is famously low — typically 0.05-0.15% of assessed value, so $300-$800/year on a $350K condo.
- Fideicomiso annual fee: $550-$1,000/year to the trustee bank.
- Utilities (when vacant): $80-$200/month for electricity, water, internet.
- Hotel tax + IVA: 3% state hotel tax plus 16% IVA on rental income, collected from guests and remitted to Mexico's tax authority (SAT). Most platforms (Airbnb, Vrbo) now collect and remit automatically, but you'll want a Mexican accountant to confirm.
- U.S. tax reporting: Mexican rental income is reportable on your U.S. return (Schedule E), with foreign tax credits available for Mexican taxes paid. Budget $500-$1,500/year for cross-border tax prep.
Bake all of this into your model before you wire the reservation deposit, not after.
11. What to Do Next
If El Tezal fits your investment thesis, the next steps are concrete. First, get the actual pre-sale price sheets and unit availability — what's published on developer websites is often six months stale. Second, build your underwriting around realistic, not aspirational, occupancy and ADR. Third, line up your fideicomiso and Mexican attorney before you find the unit, not after.
For context on the broader Cabo investment picture, read Is Cabo Real Estate a Good Investment in 2026? and The Realistic Cabo Vacation Rental Income Math. For the broader region overview, see our Cabo San Lucas Developments Index.
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Contact Us TodayFrequently Asked Questions
Where is El Tezal in Cabo San Lucas?+
El Tezal is a hillside neighborhood on the eastern edge of Cabo San Lucas, perched above the Tourist Corridor between downtown Cabo and the airport route. It sits 5 to 10 minutes from Costco, Home Depot, Walmart, and the Marina, with elevated lots that capture Sea of Cortez views. The area runs along the Libramiento highway and the new Bulevar San Lucas.
Why is El Tezal the fastest-growing investment area in Cabo?+
El Tezal combines three things no other Cabo zone offers simultaneously: sub-$500K entry pricing, ocean views, and walkable proximity to Cabo's daily-life anchors. TheLatinvestor projects 7 to 10 percent price growth in 2026, the highest in Cabo San Lucas. With 17+ projects actively building, the area is producing the largest new-build inventory in the region.
What is the average price of an El Tezal condo in 2026?+
Two-bedroom condos in El Tezal typically run 5 to 7 million MXN, or roughly $271,000 to $380,000 USD, as of early 2026. Studios start near $185,000 and three-bedroom premium units reach $500,000 to $600,000. Pre-construction pricing at projects like Cuatrovientos starts as low as $200,000, with delivered units pushing past $515,000.
Can I produce strong rental income from an El Tezal condo?+
Yes. Well-positioned El Tezal condos earn nightly rates of $180 to $320 with 55 to 70 percent annualized occupancy, generating $32,000 to $48,000 in gross annual rental revenue on a $350,000 condo. That produces 9 to 13 percent gross yields, materially higher than the 4 to 6 percent typical of Pedregal estates, where entry pricing is 4x higher.
How does El Tezal compare to Pedregal and Palmilla for investment?+
Pedregal and Palmilla deliver brand prestige and absolute-dollar appreciation, but at $1.5M to $5M entry points, cash-on-cash yields run 4 to 6 percent. El Tezal at $300K to $500K entry produces 9 to 13 percent gross yields and projected 7 to 10 percent appreciation in 2026 — a better return profile for investors who don't need brand-name addresses.
Which El Tezal developments are worth watching in 2026?+
The most-mentioned active projects are Solaria by Kaab, Cuatrovientos (four towers, $200K to $515K), Tramonti Paradiso, Cumbre del Tezal, Vistas del Tezal, Nahara, CIAN, Lumaria, Damiana Residences, Monte Rocella, Marazul, Dream Tezal, Oceana Wellness, Cabo del Mar (Ventanas Phase 4), Casa Adobe, and Rivieri Pueblo Mediterraneo. Each is in active pre-sale or under construction.
Is El Tezal safe to walk and live in day-to-day?+
El Tezal is among the more residential, low-crime areas of Cabo, anchored by gated developments and the local population that staffs the city. The neighborhood lacks tourist-zone foot traffic, which means quieter streets but also fewer walkable restaurants. Most residents drive 5 to 10 minutes for groceries, dining, and beaches. Uber and taxis are reliable.
Aaron Cuha
Real Estate Advisor & Los Cabos Market Expert
Real estate advisor and founder of Living In Cabo. 15+ years helping families navigate complex real estate decisions. Strategic partner with Ronival — Baja's largest brokerage.
