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Is Cabo really cheaper than the U.S., or is it simply a lifestyle upgrade with its own price tag?
Mexico retains a reputation for affordability, yet Los Cabos, comprising Cabo San Lucas and San Jose (hereafter referred to as “Cabo” or “Los Cabos”), has become one of the country’s most expensive destinations. The twin cities attract affluent travelers, retirees, and second-home buyers, and prices often resemble those of California more than those of Cancun.
A Snapshot from a Local Cost of Living Survey
To shed some light, real estate broker Fletcher Wheaton circulated a short cost-of-living survey. Forty-seven people responded, primarily foreign residents and professionals in the real estate, hospitality, or digital services sectors.
About 40 percent were from the United States, 30 percent from Mexico, and the rest from Canada, Europe, and Australia.
The sample is small and self-selecting, so it cannot represent Cabo’s 350,000 residents. Still, it offers a telling snapshot: Cabo is neither a budget escape nor uniformly costly. How affordable it feels depends on three key factors — lifestyle, property ownership, and where you’re relocating from.
Housing Costs in Cabo: Rent, Mortgages, and Ownership
The housing market sets the tone for nearly every budget. The survey reported an average rent of about US$1,950 per month, sufficient for a two- or three-bedroom condo in a gated community with a pool and often an ocean view.
The spread is wide. Some respondents reported rents below US$1,000, while others paid US$8,000 or more.
Owning vs. Renting: Why Housing Defines Affordability in Cabo
Nearly a quarter said they had no rent or mortgage at all, having purchased their home outright with cash, a typical pattern among foreign buyers.
That divide is crucial because, in practice, housing is the anchor expense. A household with no rent or mortgage may find life in Cabo surprisingly affordable. A renter paying US$2,500 a month may feel they’ve landed in a market priced closer to San Diego than to mainland Mexico.
Utilities in Los Cabos: Electricity, Water, Internet, and More
If housing is the anchor expense, utilities are the wildcard. In Baja California Sur, costs are shaped as much by geography and reliability as by official rates.
Electricity and Water: High Costs, Unreliable Supply
Electricity is the primary concern. Baja California Sur is an energy island, disconnected from the national grid, which makes power both fragile and expensive. Summer bills can climb to US$300–US$500 a month when air conditioning runs full-time. In winter, usage drops sharply, with some residents paying as little as US$50 for a two-month period. The swings make budgeting tricky and highlight how much costs depend on lifestyle and tolerance for heat.
Water is another line item that’s hard to predict. The municipal bill is modest, about US$15 per month, but the supply is inconsistent. Many neighborhoods go weeks without service, forcing residents to call in delivery trucks to their homes. Each load costs around US$70 and may be needed monthly. Paying the city for water that doesn’t arrive while also paying truck drivers is part of life in Cabo.
Gas, Internet, and the Overall Utilities Picture
LP gas is usually affordable, unless a property has extras like heated pools, which can quickly increase costs.
An Internet connection, by contrast, is inexpensive and reliable. For around US$30 a month, residents get service strong enough to support remote work, often a better value than in the U.S.
Across electricity, water, gas, and internet, the survey showed an average monthly utilities bill of US$343. But that average disguises wide variation: summer cooling, water trucks, and luxury amenities can easily double it.
Utilities in Cabo aren’t a fixed figure. They’re a shifting set of variables that depend on the season, the neighborhood, and the level of comfort you demand.
Food in Cabo: Grocery Prices vs Dining Out Costs
The food scene in Los Cabos reveals a surprising pattern: many residents spend as much, or more, on dining out at restaurants as they do on groceries. The survey reported monthly averages of US$746 for groceries and US$749 for dining out, highlighting the central role of eating out in daily life.
Why Dining Out Costs Rival Grocery Bills
That split is unusual. In most U.S. cities, groceries account for the largest share of household food budgets. In Cabo, two dynamics tip the scale. First, the dining scene is constantly expanding, from high-end kitchens to casual taquerías. Second, many foreign residents view Cabo less as a place to save money and more as an opportunity to enjoy life. Restaurants become an integral part of the routine, rather than an occasional indulgence.
Perceptions vary. Someone arriving from Mexico City or Guadalajara may find the restaurants in Cabo to be expensive. One respondent even compared Cabo unfavorably to Chicago, noting that dining out there often costs more, despite Chicago’s renowned food scene.
Grocery Shopping in Cabo: Fresh Produce vs Costco Runs
Groceries tell a different story. Fresh produce is abundant and affordable, with farms in Todos Santos and Ciudad Constitucion supplying markets across the peninsula. Still, shopping habits matter. Many households split their shopping between Costco runs, which offer bulk convenience, and local markets, which provide fresher and cheaper fruits and vegetables.
Transportation in Los Cabos: Cars, Fuel, and the “Island Tax”
Getting around in Cabo comes with built-in costs. Public transportation is minimal, which makes owning a car almost unavoidable.
Average Transport Costs: Fuel, Insurance, and Driving Habits
The survey found an average transport spend of about US$496 per month, covering fuel, insurance, and maintenance. Insurance is one of the few bargains: full coverage runs around US$156 a month, noticeably cheaper than U.S. rates. Fuel prices are comparable to those in the U.S., but driving habits play a significant role. Long trips to Todos Santos or the East Cape can add hundreds of dollars to your expenses in a single month.
Maintenance and the “Island Tax” on Vehicles
Maintenance is where Cabo sets itself apart. Rough roads, salty ocean air, and limited supply chains wear down vehicles faster than expected. Parts often cost multiples of mainland prices, and delivery delays are common. One telling example: a garage door priced at MX$10,000 in Mexico City costs MX$30,000 in Cabo. The so-called “island tax” appears in everything from tires to air conditioning systems.
For most households, transportation isn’t just about a fuel budget; it’s about being ready for the unexpected. Tires puncture on dirt roads, storms damage vehicles, and minor repairs escalate when parts are scarce.
On paper, car ownership here may appear more affordable than in the U.S. In practice, it requires flexibility, patience, and a willingness to absorb extra costs when they arise.
Healthcare in Cabo: Costs, Insurance, and Access
Healthcare in Cabo feels affordable in some respects and costly in others, depending primarily on your country of origin.
Routine Care: Affordable for Foreign Residents, Pricier for Mexicans
For residents arriving from the U.S., routine care often feels refreshingly inexpensive. General practitioners charge modest rates, and private clinics deliver attentive service for a fraction of U.S. prices. Many foreign residents pay out of pocket for check-ups and minor treatments rather than involving insurance at all.
For Mexicans relocating from other cities, the picture shifts. Compared with Mexico City or Guadalajara, private care in Cabo can feel expensive. Insurance premiums are generally lower in Mexico than in the U.S.. Still, policies typically feature high deductibles and are designed to cover major emergencies rather than day-to-day healthcare expenses.
Specialized Treatment and the Survey Results
Specialized treatment is another limitation. Advanced surgeries or complex therapies often require travel to Mexico City or abroad. Even less intensive procedures can be complicated by Cabo’s relative isolation.
The survey reflected this split: healthcare barely registered as a cost for younger, healthier households, but was a significant line item for older residents who maintain private insurance.
Ultimately, healthcare in Cabo is best characterized as affordable yet uneven. For routine needs, costs are manageable and service is good. For specialized care, gaps remain, and those gaps shape how different households experience the actual cost of living here. What is the average monthly healthcare expense according to the survey? US$350.
Leisure and Entertainment: How Lifestyle Choices Shape Budgets
Cabo’s leisure economy is both a draw and a wildcard. The survey found an average monthly spending of about US$520. Still, the range was wide — some reported spending less than US$200, while others spent far more on golf rounds, fishing trips, or nights out.
Golf, Fishing, and Water Sports vs Low-Key Local Leisure
Golf is often the centerpiece for foreign residents, with green fees at top courses that can add up quickly; however, memberships and discounts help offset the cost. Fishing, diving, and other water sports entail similar costs and require extended periods of time. Many others keep their leisure budget modest, focusing on casual restaurants, local music, or cultural events.
Limited Cultural Infrastructure but Growing Options
What Cabo lacks are the built-in cultural circuits of larger cities. There are no major league sports teams, few large concert venues, and limited theatrical programming. Instead, leisure revolves around the outdoors, restaurants, and social gatherings. Festivals and touring acts do appear, but they are often bundled into resort packages priced for visitors rather than locals.
For residents, value comes from knowing where to go. A neighborhood taquería or a small gallery night can deliver just as much satisfaction at a fraction of the cost. The choice of scene (upscale or low-key) largely dictates how expensive “fun” becomes.
The bigger lesson is that leisure in Cabo is discretionary. Spend like you are on vacation, and monthly costs rival any major U.S. city. Live closer to local rhythms, and entertainment becomes one of the lighter expenses in the budget.
Household Help and Private Schools: Everyday Services in Cabo
One of the most apparent contrasts between Cabo and the U.S. or Canada lies in the availability of everyday services.
Household Help and Childcare Costs
The survey revealed an average monthly expenditure of approximately US$250 on household help, including cleaning, gardening, and basic maintenance. Day rates for a housekeeper or nanny are typically in the range of US$40 per day, making domestic support accessible to many households. In some cases, the same person who handles cleaning may also provide childcare, blurring the lines between household help and family support.
Education and Other Everyday Services
Education can be a significant expense, especially when it comes to private schools, which generally charge around US$690 per child per month, with high school tuition being more expensive than that of elementary schools. For foreign residents accustomed to high tuition rates, this can be perceived as good value. However, for Mexican families moving from mainland cities, this may represent a considerable new cost, although it is often justified by the availability of bilingual programs and personalized instruction.
Other services stand out for their affordability. A long-term gym membership costs around US$30 per month, while a men’s haircut averages US$15, a fraction of the prices in the U.S. or Canada. These minor differences add up, contributing to the sense that life in Cabo, while costly in housing and utilities, can feel more comfortable in daily routines.
Comparing Cabo to Other Cities: U.S. vs Mexico
Cabo vs U.S. Coastal Cities
Add the numbers together, and Los Cabos stands out as one of Mexico’s most expensive regions, but still less costly than many U.S. coastal markets.
The survey suggests that maintaining a U.S.-style lifestyle in Cabo costs approximately 80 percent of what it would in California or Miami. For retirees or remote workers arriving from those markets, that feels like a discount.
Cabo vs Mainland Mexico
For families relocating from Mexico City, Monterrey, or Veracruz, the equation flips: housing and dining often make Cabo more expensive than home.
Perceptions split along similar lines. Sixty-eight percent of respondents said life in Cabo was cheaper than where they came from. About 22 percent said it was more expensive, while 10 percent found it roughly the same.
The takeaway is simple: Cabo is not a monolithic “cheap” or “expensive” place. It sits in the middle ground — affordable for some, aspirational for others — its actual cost defined by lifestyle choices and point of origin.
Cabo’s Cost of Living Is About Lifestyle, Not Savings
Cabo is a paradox. By Mexican standards, it is expensive; by U.S. coastal standards, it can feel like a bargain. Both views are true.
What makes Cabo distinct is not the absolute price of groceries or rent, but the way those costs intersect with lifestyle and opportunity. The region is growing faster than much of Mexico, resulting in higher wages, new businesses, and opportunities to reinvent careers. For foreign residents, Cabo offers something else: the ability to trade part of their wealth for a climate, rhythm, and social life that feels richer than what they left behind.
The Big Idea: A Choice, Not a Discount
The real story is that Cabo is a choice, not a discount. It is the decision to pay more for the possibility of more: more leisure, more connections, more opportunity. For some, that feels like relief. For others, it is a stretch. But in either case, the logic is the same: people don’t come here to save. They come because the life they want is here, and they are willing to pay for it.