Navigating Belize’s Property Market Safely
About 30 years ago, I was sitting at a palapa bar in Playa del Carmen waiting for the ferry to Cozumel and thinking, wow, this is really something. It’s so beautiful here, so unspoiled, so secret.
By 2000, Playa del Carmen was one of the fastest-growing cities in the world. Today it’s home to more than 150,000 people. The past two decades in this part of the world have seen an explosion that I’ve watched with amazement. If only I’d bought a piece of land along this coast 20 years ago when I first started spending time here, I’ve thought so many times.
It was that experience that got me interested in international real estate as an investment.
In the years since, I’ve invested in property throughout the Central America and Caribbean region. Since 2007, I’ve been focused especially on Belize.
This is a small country that offers diverse choices, so you have to start any conversation about buying real estate in Belize with the question: What are your objectives?In Belize, you could invest in a condo on the beach, a home in a planned community, a house in a local town, or a piece of land in the country. Each purchase has its advantages and its downsides, so, again, it’s all about what you’re looking to accomplish. Are you shopping for a place to live or for long-term appreciation?[pullquote]Do you intend to use the property full-time yourself or only part-time with the hope of renting it out otherwise?[/pullquote]
To state the obvious, a beach condo puts you right on the beach but keep in mind that little Belize has a long mainland coast and cayes offshore, meaning lots of beach choices, and not all beaches are created equal. Some beaches in this country are Robinson Crusoe-style. Others are rowdy and noisy with lots of nightlife and tourists. Again, it comes down to what you’re looking for. Do you want privacy or company, solitude or parties?
A home in a planned community means privacy and security, peace and quiet. Planned communities are relatively new to Belize. Most are being built to North American standards, meaning you won’t have the quirkiness of a Belizean home (lights that turn on when you push the switch down, for example) and you won’t have Belizean neighbors, either. This could be a plus for you or a minus. Planned communities are outside the towns for the most part, meaning that, while you’ll be safe and secure behind the guarded gate, you’ll also be a drive from shopping and restaurants. A drive at night in this country can be an adventure because the roads are basic, often dirt, and almost always unlit.
A home in a planned community also means fees. Monthly HOA fees support the upkeep of community amenities and services. These can range from US$150 to US$200, something to keep in mind when doing your budgeting.
A home in town can be your most convenient option and also your most affordable. The trade-off is that, with rare exceptions, houses in Belizean towns are local Belizean houses. You may have to search for a while to find one that will be comfortable for you.
Not only is a local-style house in town more affordable than a new-built house in a planned community, but it also comes without a monthly HOA fee.
If you’re thinking of buying something local in town, understand that zoning doesn’t exist in this country. If you buy or rent a nice big house in a nice part of town with a vacant piece of land next-door, don’t be surprised if, a year later, someone buys that piece of land and builds a disco or a car repair shop. I’m not saying that will happen, but it could.
How can you know how much you should pay for the kind of property you’re interested in buying? You have to compare apples with apples, and that’s not easy in this market. You want to consider the cost of a condo or house on a per-square-foot basis, but you also have to pay attention to what’s included in the square feet. It’s like asking, “How much does a bag of groceries cost?” It depends what’s in the bag.
In Belize somebody might tell you they can build you a house for US$80 per square foot, but you can’t let the conversation end there. Ask what’s included in those square feet. You might be surprised to learn that that per-square-foot price doesn’t include windows, for example, or plumbing or cabinets. You don’t expect a house to come with appliances, but most of us don’t think of a water heater as an appliance.
If you’re looking for rental income, focus on San Pedro or Placencia. Those are Belize’s highest trafficked tourist destinations.
If you are looking for appreciation, focus on Cayo and Corozal. These are the fastest-growing districts in this country.
Another option you may be considering is building your own house. In this case you should know about the Central Building Authority (CBA). This is a new government agency, maybe three or four years old. When I arrived in this country, you could build whatever you wanted. Now the CBA is putting some standards in place. Now, for the first time in this country, there is a building code that you need to adhere to.
One more thing you should know: There are no escrow companies in Belize, and you can’t take escrow for granted. It’s not typically part of the buying process. You can insist on it, but you’ll have to set it up. I’d recommend doing that through your attorney. If you have a good attorney, this can work. I don’t recommend using the seller’s attorney, and I really don’t recommend using the seller’s attorney for escrow!
Jim Hardesty
Live at this week’s Live and Invest in Belize Conference
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