Buying Investment/Rental Property

[David Gibb]

I’ve been investing in rental properties in Canada and the U.S. for quite some time, and I’m now considering purchasing one or more properties in Belize – which is where I’d like to retire one day. Just wondering what the rental market is like down there, long term rentals vs. short term. I would imagine one could earn a better return catering to short-term tourists, however I wonder whether local property management would become a challenge, and how much demand there is away from the coastal and island regions?

It’ll be another 5-10 years before I could consider moving to Belize, so I’d rather not invest at this time if it will be challenging to keep a property rented. I’ve been looking at some around the airport/Ladyville area that look like good value if rental prospects are good.

Thanks.

[COUNTRY EXPERT ANN KUFFNER]

David,

Short-term rentals are treated differently in Belize than longterm rentals, requiring different types of permits. Short term rentals are treated as hotel rooms, requiring you to pay a much steeper hotel tax of around 9-10% tax. So most expats avoid short-term rentals unless they don’t mind paying the extra tax.

But rentals can provide a viable income stream for properties in Belize, since tourism is growing here, and expats are visiting, to test drive the area as a retirement option. There is a need for more longterm rentals, in particular, from 1-12 months, in Placencia and Caye Caulker. Expats regularly have a hard time finding rentals of a month or more, to stay long enough to test out the lifestyle.

The demand for rentals, short and longterm, is greater in tourist areas such as the cayes, Placencia, and Hopkins. But longterm rentals are also in demand in these areas, and in Corozal and San Ignacio.

There are some property management companies who will manage and rent out your property for you. Some are great, others are problematic. But you have time to begin looking at properties and having realtors show you what’s available, since you won’t move here for a few years.

Note that property prices have escalated in the tourist areas during the last few years. So there are not many deals to be had these days, unless you are willing to buy a building that needs renovating. And it is not wise to take on a renovation project unless you can be here the entire time, to be sure any work is done according to your expectations.

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