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Unlike Los Cabos, Baja California Sur's most popular destination, La Paz's real estate market offers both long-term growth potential and low prices, with a more authentic Mexican feel. "La Paz is the steady turtle which will pay off in the long run," in contrast to Los Cabos, which "has a much higher basis and will continue to appreciate because of its 'glamour' and current demand," Linda Neil, an accredited buyer representative and real estate consultant based in La Paz, said.

Photo of La Paz beachfront courtesy of Othon Leon

Properties with weekly rental potential can be found for as little as $100,000 to $150,000, which is low relative to Los Cabos, James Glover of Baja Real Estate and Consulting and publisher of bajainsider.com said. "There may not be as big a market for the weekly rental as there is in Cabo, but there would be appreciation in your values and you would be able to rent it."

As the capital of Baja California Sur, La Paz "has a population of over 200,000 and has extensive infrastructure in place, like state-of-the art hospital facilities, schools, universities, shopping and more," John Fair, a developer behind the Paraiso del Mar development in La Paz, said. La Paz is known for having one of the highest per capita incomes in Mexico and a large population of wealthy Mexican residents.

"Technology has increased dramatically in the past few years, making communications with home and business much simpler and less expensive." Neil said. This could aid La Paz's growth as a retirement and tourism destination.

La Paz has an international airport with service from seven airlines, John Glaab, vice president of international marketing for The Settlement Company, Mexico's oldest escrow and title company, said.

"There are abundant properties [and] reasonable infrastructure," Neil said. "La Paz has eight universities, an active cultural scene, is the head of government for the state, is headquarters for the FONATUR Sea of Cortez project."

"La Paz...enjoy[s] outstanding beauty, both mountains and the Sea of Cortez," Neil said. Water sports and a relaxed lifestyle are causing many people to consider moving there, she said.

However, the city has not yet seen a major tourist boom, Glover said. "La Paz is dragging its feet still...it's going to take a little more time before it really sees the boom that the Los Cabos area is getting because the government isn't helping as much."

Resort development is occurring, though not as rapidly as at the tip of Baja. Glover said he believes La Paz's lack of a golf course has held up investment. Once a golf course is built, retirees from Cabo will likely be attracted to La Paz and "it will make a radical change," he said. 

"I like La Paz for long-term appreciation for purchases made right now. It starts from a lower basis and will climb steadily," Neil said.