I’m thinking about buying some beachfront property in sunny old Belize. I got a million random thoughts about it and hopefully I can get some feedback. I’m not really sure of the thought process that goes through a person’s head when they’re thinking about buying but mine is pretty simple. I want a piece of property on the water in a tropical location, I always have. Belize seems like the right place to me, so now I’ve got to start to see if doing this now makes sense. Even though this is something I want for myself, it is still an investment so I’m going to evaluate it like one. Sounds like a good topic for a post so lets get started.
How do I get the property?
I’ll start buy showing you the place. It’s about 1.3 acres of bayfront property. You can see in the picture why I’m so interested. I’d love to have this and eventually build a place of my own on it. For now I have to figure out how to get it. Financing the land is really not an option. US banks wont lend money for foreign properties and even if you can find a Belizean bank to rent to a foreigner, the interest rate is going to be outrageous. Some properties sell with owner financing but I’m just plain old not doing that! Maybe its legit, but I don’t give a shit! So cash it is, but where do I get that much from, the land costs $200,000 and I don’t have that much just sitting around (who the hell does??). There are a few options I considered and quickly decided against. First I considered selling stock. I could do that but my money is always gonna make a better return in the stock market so that one was canceled. Id consider selling some to make a down payment but that’s about all. I considered bringing in outside investors but since my girlfriend is interested in buying it with me, I really don’t want to add anyone else. Since we’re going to eventually build on it, having someone else with an interest in it could get messy. Owner financing? hell no!
Now that I have some bad ideas eliminated, I’m really left with only one good option (and a bad hangover), refinance my existing mortgage! This sounds like a very risky option but realistically it’s the safest I’ve found so far. Any other ideas out there??I can pull the money out of the existing equity in the house Sharon and I own, buy the land and still pay a low interest rate. Yes, the payment for the place I live in will go up and yes I will be deeper in debt but I will have the land that I’ve wanted for so long.
Since I said I’m going to evaluate this like an investment I now need to figure out how to manage this hole I can potentially dig myself deeper into. Debt is not a bad thing at all if you can leverage it to make money. It’s something that is done constantly, and just doing the basic math on it, my mortgage payment is going to go up about $1200. I didn’t say it would go UP TO $1200, I said it’s gonna go up an ADDITIONAL $1200 on top of what it already is. That’s a lot, holy shit, that’s a WHOLE LOT! The goal is to make the property generate that that additional $1200 some surplus. That’s also brings me to my next step of the process….
How do I monetize the land?
This is the big challenge!!! Figuring out the best way to monetize the land, so far, is the biggest problem I’ve had and is going to be the most critical decision I make. At this point, if I knew there was no way to earn back my $1200 each month, I would have to stop the process and walk away. That would completely suck. Even though this property is something I’d love to have, if it is going to cost me money, I just couldn’t justify buying it. Knowing there is a way to make a profit I’m going to proceed.
Here I’ve got this vacant piece of land in a tropical paradise which is awesome but what can I do to have it generate income and how do I protect myself in the process? I have some challenges that I’m coming across so far.
- What type of business do I want on the land
- How do I collect money
- How do I manage a business from out of the country
- How can I prevent being taken advantage of
I didn’t even know where to start, hell, I’m still not too sure but I guess we’ll give it a try.
I guess I want to figure out what type of business is going to create the largest return for my investment with the lowest amount of risk. The first thing Sharon and I were thinking was building some small bungalows and putting them on Airbnb. That feels like a good option for a few reasons, bungalows are fairly cheap, Insurance costs would probably be less that if we were to build a large house, we could use airbnb’s services to manage it and also get paid directly by the customer. On the down side, bungalows are cheap but they still cost money, more expenses for maintenance and upkeep, going even deeper into debt, and also additional stress. I already drink my fair share and then some, so more stress could possibly turn me into a full blown alcoholic. Maybe I’ll take my chances, this option is staying on the list for now.
Maybe I could just lease it out for someone else to open up a business. This could be a nice stress free option. Just have a beautiful piece of property, rent it out to a business that is successful and have them basically pay for it for me and in the end I get my dream for free. That could be the best case scenario. In theory I would just have someone sign a lease, provide whatever infrastructure they needed, and collect a check, right? I really don’t know. There are a lot of unknowns on this one for me, I’ve never owned business space. I cant imagine it’s that easy. What if they don’t pay? What if they cant pay? This is an international property and I sure as hell don’t know international laws. Am I legally allowed to remove them? Do I really wanna deal with this kind of shit? Can the liver handle the amount of drinking I would do? Is this the worst case scenario or could it possibly get worse? I’m not sure but there are a lot of unknowns on this one for me. It’s definitely an intriguing option, one I’m going to have to look into more.
Anyone have any experience with these ideas? I could use some help.
I’m gonna leave it here for now but I have a few other ideas for the land that I think I’m going to continue with on the next post.
Everyone remember to have a beer for me