Why do investors love real estate?
Because unlike the stock market, bargains can still be found in the real estate market. Investors with boots on the ground or who know the right people or are in the right place can find hidden gems before the rest of the investing public catches wind.
Let me tell you about a little hidden gem I’ve known about for years – Belize – a market that’s poised to explode in a big way.
I have the first-hand experience from living there for more than a decade, and it seems the rest of the world is starting to catch on to what I’ve known for years.
Check out its accolades:
Belize is a favorite of liveandinvestoverseas.com landing at #6 of the Live and Invest Overseas Top 10 for 2020 and also showed up on its list of Cheapest Places to Live Well.
Belize was also mentioned as one of the Most Magical Places in the World to Elope by coveteur.com.
A recent article in Financial Times, “Belize’s Low Property Prices Lure U.S. Buyers,” highlighted the appeal of Belize and pegged it as a market tipped for growth.
Here’s what’s drawing investors to this Caribbean nation:
A former British colony, Belize is the only Central American country with English as its official language with U.K. common law as the foundation of its legal system.
Tourism is booming in Belize, dominated by Americans. There were more than 500,000 overnight visitors in 2018 — a 14.6 percent increase from 2017, according to the Belize Tourism Board.
Annual cruise passenger arrivals in 2018 hit 1.2m, nearly twice as many as 2012.
Real estate bargains abound. Homes are relatively affordable compared with other Caribbean destinations (a two-bedroom beachfront condo on Belize’s Placencia peninsula costs about $350,000, compared with $525,000 – $725,000 in Barbados and Grand Cayman).
Ecotourism is poised to boom. With more than a third of its landmass protected — including much of its coast and coral reef — Belize is seeing the emergence of eco-resorts with environmental preservation at their core. The Belize Rainforest Reserve in Cayo district is a 1,000-acre ecological community with a boutique eco-hotel, wildlife reserve, and organic Fairtrade gardens.
The most high-profile of Belize’s eco-resorts is Leonardo DiCaprio’s 104-acre private island, Blackadore Caye, bought for $1.75m in 2015. DiCaprio plans to create the “world’s first truly restorative island development” with a Four Seasons hotel, 36 resort bungalows, and 36 energy-efficient estate villas.
With many gateway markets saturated with institutional and foreign investors, savvy real estate investors are looking offshore for high growth opportunities.
Investors are looking to get in on the ground floor of an offshore market before prices peak. Belize fits this profile:
Since 2012, real estate prices have been steadily rising. “Scarcity in beachfront land and skyrocketing tourism rates are driving prices up,” says Andrew Ashcroft, developer of Alaia Belize on Ambergris Caye island. “Since the crisis, property prices have increased by 100 percent overall.”
The Global Property Guide states that prices in Ambergris Caye and Placencia, the two main destinations for overseas buyers, rose annually by double-digit figures from 2015 to 2018.
The good news is that there is still significant room to grow, and with construction on a new international airport underway to provide more direct flights to North America and Europe, tourism and real estate are expected to boom.
From living in Belize and traveling extensively between the states and my adopted home, I have found that Belize is primed to boom and there is no better time than now to get on the ground floor and to diversify through an offshore investment in an investor-friendly country with a stable government and legal system.
Offshore investing in a country like Belize offers many benefits, including:
#1 Higher ROI
Foreign markets may present opportunities for achieving higher ROIs that domestic markets may not be able to match because of the difference in demographics and demand. Saturated domestic markets may not be able to match the cap rates of an up and coming market like Belize, where less competition results in more affordable purchase prices.
You should never put all your eggs in one basket when it comes to passive income investing. It’s not true that as one market goes, the whole market goes. This is especially true when investing in foreign markets.
Even during the Great Recession, while the world as a whole was in the depths of a serious financial crisis, there were countries and markets that were less affected than others. That’s why you should never stick to just one market. If the local market takes a dive, you’ll want to have investments in other markets to pick up the slack.
By investing passively across different geographic markets, your portfolio won’t be tied to just one market cycle and will be better insulated against volatility over time.
#3 Ground Floor Opportunities
If you don’t look outside the geographic box, you may miss out on opportunities to invest on the ground floor in up-and-coming markets where values can still be found before the market blows up.
#4 Asset Protection
Investing offshore moves your wealth and assets out of the reach of many seeking deep pockets. Trial lawyers only pursue cases where they can establish the defendant has considerable assets. Many online services provide asset searches showing ownership in entities, real estate, personal property, and even bank accounts, but only for assets held in the U.S. or Canada. Ownership in offshore assets is not readily available.
#5 Foreign Residency and Citizenship
In many countries, owning property in a foreign country will ease the path to citizenship and opening financial accounts and provide other benefits often only afforded to residents. In Belize, foreigners purchasing land or property are afforded the same rights as Belize citizens regarding freehold property ownership. Additionally, there are no capital gains or inheritance taxes in Belize.
#6 Room for Growth
Many economists believe that growth in emerging markets will, over time, outpace growth in developed economies. Offshore investing in growing economies like Belize have the potential to deliver higher growth while acting as a hedge against volatility elsewhere.
With a stable government and financial systems, Belize is poised for growth and, with its stability, will be able to handle that growth.
If you’re a passive income investor seeking to diversify and maximize ROI through consistent cash flow and appreciation, think outside your geographic box.
Landing on ground floor opportunities in and up-and-coming and stable market like Belize will ensure consistent cash flow along with long-term appreciation – all backed by a tangible asset protected by a stable legal infrastructure.