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Originally Posted On: https://www.playlouder.com/buying-ambergris-caye-real-estate/
If you’re looking for a fun and worthwhile real estate hunting trip, consider booking a flight to the Central American country of Belize. Buying gorgeous Ambergris Caye Real Estate was actually pretty easy, and it paid off big time when we sold it.
Why did we buy Ambergris Caye Real Estate in Belize?
In 2014 we decided to make a visit to Belize. Leading up to that, we had been considering buying a property in a location where we could imagine ourselves eventually retiring. We’d read article after article in one of our favorite magazines, International Living Magazine, that touted Belize as one of the top retirement destinations in the world. Here are some of the reasons why.
As a former British Colony, the official language spoken in Belize is English (woo-hoo!). There are no restrictions on foreigners owning land (even on the beach), and property taxes are low. They also offer a Qualified Retirement Program which allows individuals age 45 or older, and their families, to move to Belize if they have a stable annual income of $24,000 or more. This program gives you the opportunity to import all of your belongings (even cars and boats) without paying any customs duties or taxes.
With all of these benefits to offer, we figured it was worth exploring Belize, and at the very least, we’d just have a nice vacation! So we researched and narrowed down our likely property buying zones to a few key locations in Belize, including Ambergris Caye.
First Stop: Placentia
Upon our arrival in Belize (just under a 5 hour flight from Los Angeles), we rented a car in Belize City. This city is not really a place for sight seeing, so we immediately drove south down the coast to our first stop: a sleepy little peninsula village called Placentia.
We booked a few nights in a bungalow right on the beach called the Maya beach Hotel Placencia. It certainly felt like our kind of paradise—quiet, isolated, and sandy.
The Placentia water was warm and clear, and it sparkled with the craziest turquoise blue you’ve ever seen. You could walk out into the ocean, look down, and see fish swimming around your toes.
The village of Placentia itself was cute but small (and did I mention it was small)! The shops and restaurants were lovely, but (in our opinion) if you lived here, you might eventually start to feel like Groundhogs Day, going to the same handful of places every week. Especially if you were retired and had a lot of time on your hands to go out for meals.
So, while we loved the beauty and seclusion of the beach here, we just couldn’t picture ourselves retiring in a town with less than 2,000 people. We preferred a little more action and options for eating out (although, who knows what we’ll prefer when we’re 60)!
OK, Let’s Try the Jungle!
Our next sojourn took us inland to the jungle. San Ignacio is a town in the western Cayo District of Belize. The Cayo is home to large populations of Mennonites, Creoles, Maya, Lebanese, Chinese, and Latinos. It encompasses rich farmland, tropical forest, rivers and archeological sites.
We booked a room just outside of San Ignacio in a jungle lodge that offered hiking, caving, river tubing, zip lining, and Maya ruins to explore. We loved talking with the owners of Table Rock Jungle Lodge, who had moved there from the United States years ago, and created this lodge in the middle of the jungle. They bought the property (as an abandoned farm) and slowly developed it into a thriving lodge business. Their 5 year old son attended the local school, and they found it to be a wonderful place for their adventurous family.
Unfortunately, we discovered we aren’t really jungle people. We ended up cutting our stay short, because after a couple of days, we just couldn’t wait to get back to the beach. The rainforest is kind of, well…rainy…and hot. And as much as we like lizards and rivers and old ruins, we really are just plain beach people. Especially when it comes to buying property. NOT jungle people.
Back To the Beach…Corozal.
We chose to head next to the Northern town of Corozal!
We’d read quite a bit about this town close to the border of Mexico. Expats love the striking color of the water—which is an unearthly milky blue—it’s low cost of living, and it’s proximity to all the shopping and modern medical care in Chetumal, Mexico.
The main problem with Corozal we noticed right away was that there was no beach to speak of. Just a rock wall along the edge that drops down into the water. Also, we were looking for something that felt like a beach vacation. The town center reminded us more of a small town in Mexico than a Caribbean diving destination. It wasn’t quite the retirement destination that we had in mind.
Just Outside Corozal Town…
We did have a fun and interesting stay, though, in a remote village just outside Corozal. There was a tiny community in the process of being built called Orchid Bay, and only a few residents had moved in. (We ended up spending most of our time hanging out with the restaurant cook and a private teacher for a child of one of the land developers.) But, I could see the possibility of buying a little hut there eventually paying off.
Regardless of this interesting side adventure, the overall the location in Corozal just didn’t speak to us. So, when we finally ditched our rental car and made our way via puddle jumper to the island of Ambergris Caye, we had high hopes—but remained pretty skeptical—that it would somehow contain all the elements of a perfect retirement and investment location.
The Beautiful Island of Ambergris Caye
After a quick 20 minute plane ride (10 flights per day leave from Corozal as well as Belize City), we arrived on the island of Ambergris Caye, also known as “Isla Bonita” (yes, the same one from the Madonna song). At 25 miles long, it’s the largest of the Belizean islands. The current population is around 20,000 people. The preferred mode of transportation? Golf cart!
Once just a small fishing village, it now hosts high end hotels, yoga retreats, scuba diving tours, paved roads filled with golf cart driving expats, and an airport for puddle jumper flights from the mainland (an international airport on the north end is also currently in the works). We hitched a ride on a golf cart taxi, and somehow managed to fit all our luggage inside!
The VRBO we stayed in was amazing: modern amenities, infinity pool facing the ocean, and ten steps from the ocean. If I were to pick a home to retire in, this would be high on the list. Of course, the cost of actually buying this home was…a little out of our price range.
Regardless, Ambergris Caye was definitely our spot. So if we wanted to buy something on this island, it was time to think outside the box. The next day we met with Dennis Kay, an agent with whom we’d been emailing at Belize Island Real Estate. He had a beachfront plot of land in mind for us, if “we were adventurous enough, ha ha!” located on the undeveloped west side of the island.
An Ambergris Caye Real Estate Treasure Hunt
Dennis warned us that it would be a bumpy 30-40 minute golf cart ride, since the roads were not yet paved on that side of the island. And, oh yeah, they didn’t even have power lines out that far! This was starting to sound like a real adventure now. Luckily, as we bounced along the road to the property, we got to see firsthand that electricity WAS coming, and poles were popping up like skinny palm trees all along the sandy roads. It was anyone’s guess how long it would actually take to make it all the way to the north west end.
The location of this Ambergris Caye beachfront Real estate was called, get this, “Secret Beach”! I mean, who wouldn’t want to live in a place called Secret Beach?! At the time, it really was a SECRET beach. Almost deserted, this beach was only known to locals and the few hippies who lived off the grid there.
A Quick Look into the Future
Now, in 2019, Secret Beach has exploded with bars, restaurants, boutique hotels and a beach club and spa. It’s absolutely incredible. Take a look!
Now, Back to the Past…
Although we couldn’t foresee this in 2014 (I swear NO ONE was there—just one house and a dock), we could tell by the way people were snapping up land and flipping it for a nice profit in this area, that it was going to be developed very soon. And the beach itself was even better and more pristine than the east side of the island, where all the development had been up until this point.
So needless to say, back then when we pulled up to the secluded shores of Secret Beach…we were intrigued. We parked the golf cart and slowly meandered our way on foot to the mysterious plot of land. With Dennis leading us via an old school paper map, we felt like we were on a treasure hunt.
We noticed that a couple of the properties we walked through had been cleared of trees, filled in with sand, and populated with tiny baby palm trees. Dennis told us these were most likely retirement properties for people who would eventually build homes on them (and probably by the time those palm trees reached their mature height, the owners would have so me nice shade for a hammock).
The Investment Opportunity
Suddenly, Dennis stopped us, squinted at his map, and declared, “We have arrived”!
It was difficult to tell exactly what we were looking at, since the land was filled with trees, and the beachfront property wasn’t much of a “beach.” It was kind of a rock slab, with little actual sand.
But Dennis tried to quell our fears with the suggestion that we could cover over the relatively flat rocks with sand (apparently most people did this) and then we would have a nice, soft sloping water access. People who bought land here actually preferred the rock beach, he said, because it kept your property from washing away into the ocean during a storm! (Oh, hadn’t thought of that! SOLD.)
To Buy or Not Buy…
Standing on this overgrown piece of Ambergris Caye Real Estate possibility, we felt…well…unsure. We liked it enough, but could we ever see ourselves actually living here? Basically in the middle of nowhere, with potentially no electricity, on a piece of land that we couldn’t actually see through all the trees? We couldn’t even be certain where our property ended and the next plot began! Oh, and it was in a FOREIGN COUTRY!
After mulling it over with a couple cold Belikin beers, we decided that…we couldn’t lose! This Ambergris Caye Real Estate was such a gem of an island.
Why Did We Lean Toward Ambergris Caye Real Estate for Our Investment?
It had everything a person needed for a peaceful (or adventurous) retirement or vacation…including golf carts, snorkeling, diving, and yoga retreats.
2) Perfect Size
The town wasn’t crowded, but there was enough bustle to make you feel like there was some action going on. It was quiet but you could find parties and live music if you wanted.
3) High Quality Restaurants
There were plenty of options for bars and restaurants, but it wasn’t overrun by chains. The eateries were charming, colorful, and laid back. And while the food wasn’t five star, many of the restaurants were excellent.
4) Private Affordable School
Ambergris Caye had a private K-8 school, called the Island Academy, where your children could get their education in pastel colored beach huts, which were literally ON THE BEACH! The tuition was very reasonable. We were starting to envision having a child just so we could send them to this crazy dream school in paradise!
5) New Construction Expanding Rapidly
We could see the definitive progress sweeping through San Pedro and into the north west side.
Time to Pull the Trigger!
So we threw most of our fears aside and said…SUUURRREE. Why not?
We knew that the piece of land we were purchasing was a bit of a gamble because of the road and power situation. Still, it seemed inevitable that progress would continue as more and more people discovered this friendly and beautiful island. It checked all of our boxes, and it seemed like a reasonable investment given our particular interests. What else did we really need to know?
It turns out, not much! The process to purchase the piece of land was actually simple, and I’m still not sure if thats a good or bad thing. It took us all of about fifteen minutes to fill out the paperwork with electronic signatures on our iPad. The documents were all written in plain English, and were relatively straight forward. Everything played out as Dennis said it would.
The Only Catch…
So that was it. Done deal. We were buying a piece of Belizean paradise for $95,000 (102K with closing costs and fees). But there was one catch…you really can’t get a loan to buy property in Belize (especially as a foreigner).
So that left us with a couple options…
(FYI the following numbered section was written by Joe).
1) Buy a Property From Someone Who is Willing to Carry the Financing For You.
This is a fairly available option, but the terms can be on the higher side (like 10% down and and 8% APR over 5 years). There are investors who flip property like this down there, as well as people looking to get out of property they own. We actually carried financing when we sold the property 3 years later.
2) Buy the Property with All Cash.
Obviously this can be tough for most people…but it’s the simplest option. Perhaps you actually have the cash in the bank, or maybe you could tap your home equity?
3) Utilize a Self-Directed IRA (SDIRA)
We didn’t have “regular cash” available for this deal, so we decided to utilize a self-directed IRA. Doing the paperwork to get this done was actually the most time consuming part of the process. I had to open an account and then rollover the funds from our existing IRAs into it. Then I worked with the SDIRA company, Equity Trust in our case, and they sent in the funds directly for the closing.
The big issue with using the SDIRA is that you can’t actually use the property yourself until you retire. (Sorry if I just crushed a dream). You can develop the property and use it as a business, but you can’t make personal use of it. This was fine for us, but may not suit your needs. You can read more about the rules around SDIRAs here.
Now, if you are self-employed you could also set up a Solo 401k (aka a self-employed 401k)—and take a loan off it—to make this kind of investment (or any kind for that matter). This approach would not restrict your usage at all, and is far easier to deal with. (You can read more on the Solo 401k here.)
Drumroll…the Ambergris Caye Real Estate Payoff!
Ultimately, we decided to sell our beachfront future home site after just 3 years later. (Once we actually had a kid, we immediately realized that the raising him in a relatively secluded island paradise would be kind of hard). The GREAT news is that due to the growth of the secret beach, and the announcement of a new international airport right on Ambergris Caye, property values kicked up quite a bit!
We sold the property for 170K and netted a respectable 45K (41.62%) profit after all fees and closing costs. And since it was all done in a tax-deferred account, we didn’t have to pay any taxes! You can see specific financial info on the property here.
So it was all worth it. Now, we are continuing our search for interesting and off-the-beaten-path properties. Lately, I’m feeling pulled to explore Thailand, Spain, or Portugal. International Living Magazine had all three on its list for 2019, and two are on the current World’s Best Places to Retire in 2020! We’ll keep you posted when we take on our next travel and property buying adventure!