Passive cash flowing offshore assets can be valuable additions to any portfolio for their recession-proofing and asset protection benefits. And for offshore investing, investors are following demand to Belize, where tourism and its appeal to retirees are expected to give a jolt to its real estate market. However, as with any passive investments, offshore investments can be risky if you fail to mitigate the risks by conducting proper due diligence and asking the right questions. Here are the top 7 questions to ask before you invest in Belize, thanks to local real estate expert David Kafka of 1st Choice Belize.
One of the keys to real estate investment success is having boots on the ground in a chosen market. There are countless promoters trying to drum up capital for opportunities in Belize, Mexico, Costa Rica, or any other Caribbean or Central American hotspots that have never even been to these countries. As a result, they are at a significant disadvantage against brokers and investors who are local.
Experienced brokers or investment partners who are local and have established connections that entitle them to first-look and off-market opportunities wield tremendous advantages over non-locals for finding undervalued assets.
How do I know about the distinct advantages of being local? Because I am one of those investors that is local to Belize. I live in Belize with my family and work here every day. I’m not like other investors who have never stepped foot in a market or even reside in the States and commute here occasionally. Alternatively, I am here every day with my finger on the pulse of the Belize real estate market.
2. Am I investing in opportunity or wishful thinking?
Many offshore investment opportunities try to sell you on the merits of offshore investing without giving any concrete details. The “trust me” approach to offshore investing can be a dangerous proposition. Instead, when exploring an opportunity, ask yourself whether you’re being asked to invest in a concrete opportunity or a pie in the sky. Opportunity investing is investing in opportunities that fit key trends and meet real-world demand.
Belize offers an abundance of opportunities in real estate and agriculture (cocoa, coffee) that can be backed up with real-world numbers.
One of the key risk mitigators with any passive offshore opportunity is the experience and expertise of the sponsors and managers. When you invest directly, the trouble you run into is you’re relying on brokers and agents who work on commission. You can only really trust the ones that actually invest themselves. They know what they’re doing. The same applies when you’re considering teaming your capital up with an investor.
These are the essential questions to ask.
- Do they have skin in the game?
- Do they have experience in this particular asset class and geographic location?
- Do they have the expertise, infrastructure, and processes to pull this off?
4. Is Belize a stable country?
Your offshore investment is only as stable as the country you invest in. Is the country stable? Does it have a reliable legal system? These are questions Belize can answer in the affirmative before you invest.
A member of the British Commonwealth, English is the official language of Belize, and its legal system is based on British common law. As a result, Belize has a stable, democratic government with a stable and balanced economy.
5. How easy is traveling?
Belize is easy to get to direct flights offered by American, Delta, and United Airlines from Dallas, Miami, Atlanta, Los Angeles, and even Newark. In addition, Belize is conveniently located, with flight times as short as two hours, making it easy for investors to explore where they’re putting their investment capital.
With its currency currently pegged 2:1 to the U.S. dollar, there is presently little currency valuation risk. As a result, it is very easy to transact business in the country with many of the banks tailored to meet foreign client needs.
7. Is Belize trending in the right direction?
Before the pandemic, tourism and real estate were booming in Belize. Now, after more than a year of pandemic, Belize is poised to pick up where it left off – perhaps even exceeding its prior trajectory with life in the new normal. With the rollout of the vaccine and tourism poised to benefit from significant pent-up demand, tourism and real estate are slated to boom in Belize. However, vaccines aren’t a cure-all, with health and social distancing still a priority. As a result, many travelers will be drawn to locales surrounded by nature and open landscapes.
Adventure travel will increasingly grow in appeal in 2021 as travelers seek safe and relaxing destinations with nature, outdoor, and adventure activities. After all, Belize has something to offer every type of tourist.
Second. Offshore investing—especially in cash-flowing tangible assets—can supercharge a portfolio by providing recession and inflation-insulated income and growth. Not all investments are created equal, however.
That’s why you should be asking the right questions before you invest in Belize. Done right, you can potentially reap the financial benefits of investing in a stable country trending in the right direction.