Market Spotlight: Tourism, Retirement and Investment on the Rise
No matter where in the world you buy real estate (including real estate in Belize), you’re buying the market as much or more so than the property. After all, a great property in a bad market has a hard time performing well compared to even an average property in a great market. And you can always improve the property, but how do you improve a market?
So when we look for real estate, we always consider the market first. Then, we look for a great team to help us find, acquire, finance and manage the right property.
In this edition of The Real Estate Guys™ radio show, we shine our market spotlight on beautiful Belize. And to make sure we get a really good look, we pack our microphones (and shorts and sunscreen!) and travel south to bask in the beauty of Belize (and enjoy a Belikin beer).
Broadcasting in the breathtakingly beautiful Caribbean paradise of Belize:
- Your bright light of broadcasting brilliance, Robert Helms
- Your somewhat dim co-host, Russell Gray
- Special guest, the shining star of a brokerage of real estate in Belize, John Turley
- VIP guest, Minister of Tourism for Belize, the Honorable Manuel Heredia
What Makes Real Estate In Belize So Strong?
Whether you’re interested in Belize or not, this episode has some great info about what makes markets move. And except for very rare circumstances, it’s PEOPLE. That’s why real estate on the moon is still very cheap. Lots of available land. No people.
BUT, you might say, how can some little sparsely populated third world country and the real estate in Belize be an amazing opportunity? And that would be a very good question to ask.
Is Belize a great market because some guru or travel magazine says so? Who’s vote REALLY matters when it comes to real estate in Belize?
It’s PEOPLE (not the magazine). Real people. People… people who need people. They’re the luckiest people in the world. Sorry, bad joke. And if you’re too young to remember Barbra Streisand, then forget we brought it up.
Now back to our regularly scheduled blogging…
Our point is that people are what make real estate valuable. And not just any people. People who vote with their pocketbooks. So when enough people (and businesses) invest their hard-earned money into anything, that thing moves. It’s economics 101: supply and demand (with capacity to pay).
That’s why the old real estate adage still holds true: the three most important considerations when purchasing real estate are Location, Location, Location. When lots of people want to be in or on a property and there isn’t lots of it in the best location, then you have a great formula for financial success in terms of both cash flow and long term capital gains. We like both.
Belize Was Named TripAdvisor’s What?
So when John Turley tells us that Ambergris Caye, Belize was named Trip Advisors’ #1 island in the world, it’s impressive. Not because Trip Advisor said it. But because people who travel said it. It’s the TRAVELER’S Choice award and not the Editor’s Choice award. If you’ve ever enjoyed a movie that some critic panned, you know what we mean. It’s the movie-goer who buys the ticket. They’re the one who’s opinion counts when measuring return on investment.
However, that’s just one, albeit important, point on the curve.
John also tells us that major airlines are adding flights to Belize. That’s impressive all by itself. After all, airlines aren’t like big governments with unlimited budgets to create flights to nowhere. If they’re adding a flight, it’s because they expect to fill it. Probably because their customers (people) are asking them for more access to Belize.
But what’s even more intriguing is the impact that even one extra flight a week can make on the tiny country and real estate in Belize. In other words, all those extra passengers need places to stay. And the average stay in Belize is a week (as in six night and seven days). But the volume and pace of construction is no where near what’s needed to support the current demand, much less this growing demand for accommodations.
Now that’s VERY interesting!
But Big John is on a roll, so he shares some other very valuable information with us. Now you’re getting an idea how fun it is to be us. We get to hang out with all these important, knowledgeable and super-connected people and gather up all kinds of inside information.
Fortunately, we almost always carry our microphones with us (which is fun going when going through U.S. airport security), so we can capture these precious pearls of wisdom to share with you.
And while the TripAdvisor award and the additional flights is information that is readily visible to the general public (IF John Q. Public happens to be paying attention and knows what the data means in context), what John shares next is not.
Big John tells us that his real estate office, which happens to be the top volume brokerage in the county of Belize, and the 3rd highest non-U.S. RE.MAX office in the WORLD…all from a tiny little island in Belize (think about that for a minute) has seen it’s sales volume increase 300-400% year over year.
So CLEARLY, people are using the power of their pocketbook to put real estate in Belize on the map. Well, technically, Belize is already on the map. But now people all over the world are discovering enchanting Belize, just like we did 7 years ago.
Yes, it’s very fun being on the leading edge.
What Happens When Markets Get Hot?
What’s amazing – and we’ve seen this happen time and again – when a market gets hot, the momentum just builds and feeds on itself. That can be fun, but we’ve also seen overheated markets blow up, then implode. So what makes that happen?
Usually, when a market gets hot, developers over-react to the demand and overbuild. In other words, the supply and demand pendulum swings the other way and now there’s too much inventory relative to the demand. If you’ve ever had milk and cereal for breakfast, you know what we’re talking about. 😉
How Is The Government Helping Real Estate In Belize?
Of course, Big John is just a smooth talking sales guy (who happens to be one of the world’s foremost authorities on the real estate in Belize market in Ambergris Caye), so even though he’s quoting all these great stats and providing anecdotal support, we decide to balance him out by talking to a lifelong resident and now Minister of Tourism for the country of Belize, the Honorable Manuel “Junior” Heredia.
What we find out from Junior is that the Belize government has taken lessons from the beautiful real estate markets which developed before them. Sometimes, allowing that development to undermine the very beauty and charm that made the market desirable to start with. Of course, it’s really hard to screw up an ocean view, but when the beach is covered with 10 story highrises, it’s hard to see the water.
So Junior tells us that the Belize government was humble enough to get outside help, then they set up a 20 year Master Plan with a drive towards what creating what he calls “sustainable tourism”.
What does that mean?
Junior explains that Belize has reserved nearly 40% of it’s land to preserve the natural beauty that attracts tourists in the first place. Of course, as a tourist, you’ll appreciate that. The negative is that supply and demand will eventually push prices up. Now if you’re a wealthy tourist, you’ll REALLY like that. High prices keep the riff-raff out.
Of course, if you’re less wealthy, it might frustrate you. But rather than be frustrated, just go to work on building wealth.
How Expensive Is the Real Estate In Belize?
Now right now, real estate in Belize isn’t ridiculously expensive. And it will probably be several years before the equity enhancing effects of a big green belt will be seen in local real estate prices and nightly rental rates.
But as investors? It’s AWESOME.
When you can go into a market and buy before the demand has arrived and prices have gone to the moon, you’ve locked in your cost. And if the numbers make sense at acquisition, then it makes holding on for increasing cash flow and equity growth a profitable proposition.
Because eventually, as demand increases and supply can’t rise to match it, the natural progression is higher prices. And when you consider that nightly rentals cash flow so much better than long term rentals, you’re starting from a very strong base. And unlike those C class Section 8 apartments you might own, we’re guessing you’d actually enjoy staying in your Belize investment property if you’re lucky enough to have a vacancy!
Should I Invest In Belize Real Estate?
Is Belize a market that makes sense for everyone? Of course not. We’re just trying to make sure that those who should consider it are aware it exists…especially when there’s the opportunity to get in ahead of the wave – even if the swells are starting to rise up on the horizon.
How Can I Learn More?
So listen in to this especially exhilarating episode of The Real Estate Guys™ radio show and discover why we keep going back to Belize again and again. And if you get inspired, make plans to join us for a fun filled 3 day weekend adventure in Ambergris Caye, Belize.
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