Have you ever thought about owning international real estate? It could be a great way to diversify. Belize is very friendly to foreigners who want to own property.
- Strong ownership laws
- Well protected
- All agreements are written in English.
- Low property tax
- No capital gains tax
- Rapidly growing market
- Strong demand
Choosing an International Real Estate Market
How do you choose an international market to invest in? It depends on what you are looking to achieve.
Different countries and regions have different benefits and drawbacks. Thorough due diligence will be a necessity. Identify a few markets that sound interesting to you and your situation then perform a deep dive.
That’s what we did and discovered Belize. Ultimately it was the country of Belize that to us, seemed to offer the best upside but for less risk. It is an emerging market that is well-established. Only recently have they seemed to hit their stride.
Winning numerous awards for Travel and leisure and being one of the top-rated destinations in the Caribbean for several years running. WIth what seems like more awards each year. We see lots of upside potential in Belize.
Making a Decision
After choosing Belize as a place to invest in real estate the next thing to do was choose the right region. We were looking for high demand with limited supply. Enter the island of Ambergris Caye. The main town of San Pedro was the number one tourist destination in the country.
In addition to this high demand, there was a supply constraint. There is a large gap between the number of available overnight rentals on the island versus the number of available rooms. Demand is outstripping supply and there is upward pressure on pricing.
Best Performing Assets
However, not all product types perform the same. The majority of available rooms are going to be studio and 1-bedroom condos. These are condos that are individually owned as vacation homes and rented out by the HOA association or property manager when the owner is not using it.
These types of investments are great for the lifestyle investor who wants to use their place in the Caribbean and then cover the expenses by renting out the rest of the time. You can expect to see a breakeven or a small profit. The benefit is basically a free home in the Caribbean.
The product type that will likely produce the best returns is going to be larger condos of 3 bedrooms and up with the best performing being a 4+ bedroom single-family home.
Data has shown that having at least 2 bedrooms is going to be a major component of your profitability. This is where the ability to create excellent margins exists. There is a strong arbitrage opportunity for the not-risk-averse investor who’s looking for an emerging market that can offer safer and stronger returns.
Achieving Strong Returns with Belize Real Estate
As mentioned above in the best-performing assets; the single-family home with at least 3 bedrooms will bring you your highest revenue. But how does that higher revenue compare with the expenses of the larger single-family home? How will occupancy rates differ? What do the returns look like on the higher-priced single families?
Acquiring buildable land to construct single-family homes will be the most effective way to achieve the high returns that are possible in Belize. Other creative strategies can also be implemented to increase revenue further. An in-depth cost-benefit analysis will show what features and amenities will bring the highest returns.
We believe in Belize real estate. Maybe you should too?