Condo / Villa purchase checklist

[Chris]

High season is just around the corner....lots of you will be coming to the island for the first time, will fall in love and will want to invest, many in condos or developments. Here's some advice for you.
1. Pre-construction/Pre-completion: (this applies to any development where there might be completed condos or villas but the whole development isn't yet completed)
Don't buy that pre-construction or pre-completed condo or villa if:
(a) There's no city electricity to the development.
(b) The developer has net income projections of 12% of purchase price per annum or more. He's lying.
(c) Ownership is by corporate share issue/co-op rather than title. In this day and age on Ambergris Caye there is no reason for new developments not to be issuing free and clear title.
(d) Access is by boat only....that trip to town to get eggs and check the mail will get awfully old awfully quickly.
(e) Construction seems to have stalled or there's a very limited crew on duty when you view the development during a weekday. This is a BAD sign.

2. Completed Condos/Villas (this applies to finished developments/used condos)
Don't buy that completed condo or villa if:
(a) There's no city electricity to the development.
(b) Access is by boat only.
(c) You really need great rental income in order to pay the note, condo fees AND put money in your pocket (it's not gonna happen). Rental income in a GREAT development will pay the condo fees, insurance, maintenance and part of the note. (In a rubbish pre construction/pre completion development there won't be much rental income at all....in fact you'll probably be paying out of pocket for the awful management company that the shady developer set up under his ownership...in fact the rubbish pre-construction/pre-completion development will likely never be finished).
(d) The development is bank owned and condo fees have been raised drastically in the past year.

Under construction/pre-construction developments you can trust:
Grand Caribe. Awesome.
Indigo. Anything by Bob and Diane Campbell is high quality and WILL be built.
Anything by Herm Penland of Southwind Properties...always high quality.
Ambergris Lake Villas, one unit left only and 85% completed.
Bermuda Beach

There are probably some other under construction/pre construction developments you can trust, I can't think of them right now. Feel free to mention them.

[Sunshine]

Athens Gate is quite nice.  Only 12 units.  Small and upscale project.  Pool, nice beach, on-site management, on-site caretaker.  2.5 miles south of town, most of the travel is by cobble stone road.  Accessible by boat ferry too.  1800 square foot.  Reinforeced concrete.  Granite, mahogany accents etc. Riteway Construction.

Certainly comparable to the great developments/developers mentioned above.

[pedro]

Athens Gate looks odd while Pelican Reef looks great amazing as the same developer built both-also for the first time a realtor has put in writing what they have been saying for years privately well done Chris-all potential buyers should treat this as their bible as should all realtors-my, I wonder how many would go out of business immediately or sooner

[Phil]

Odd is being polite. Bloody awful is much closer.

[pedro]

Chris is putting this list on the other board but it has to be edited,as he is not allowed to put his personal recommendations -well done Marty who lives in the USA for not allowing his board members to think or indeed giving them credit for having a modicum of intelligence.

I also see that Sapphire Beach is being allowed to post again-

[Sunshine]

Chris has posted his opinions regarding a check list for purchasing condos.  I have a different opinion regarding some of the points he has made.  When I get a moment I will show where our opinions differ. 

[pedro]

I also have a point with Chris I cannot see how he guarantees that the rental income will pay everything that he says it will-I think mostly you are lucky if it pays all the costs of having a condo/villa down here-paying anything off the note/mortgage is,imo,unlikely to happen.

[Chris]

In a GREAT rental income development where one's unit is in the rental pool for 90% of the year one should be able to pay all monthly fees, annual building insurance and PART of a note if all is well. How much of the note can be paid from rental income will depend on the size of the note and the rental income.

Note that the emphasis is not really to purchase a condo based on rental income projections....rather one should purchase based on location, quality of the construction, location, value for money per square foot, location, availability of utilities, building density on the property, location, views, location and, finally, location. Yes, if it's clear that a development is so top-notch that it will generate good rental income then that should also be taken into consideration.

Unfortunately I owe Peter a beer. I bet him $50BZE that Marty would allow me to re-post on his message board after one of his over-zealous moderators moved it to a more or less private area of the board. Marty is a good bloke, he OKayed the re-post but I was asked to remove the list of developers I recommend, presumably in order to avoid offending those not listed (which would obviously include the guilty). So, as I was able to re-post 95% of the original I called it a "push" between me and Peter.....Pedro of course objected and I now have to reluctantly buy him a beer.

[pedro]

Chris you have put Bermuda Beach -which I would agree with but the developer keeps adding to his projects and if I had bought a condo there I would be mightly pissed off that having bought off plan -moved in and then a year or so later the developer has started to add another floor thereby condemning me to live on a building site for another year and changing the look of the entire project and not imo for the better-added to this there are more people using the pools etc-so I personally would take this off the list

which developers would you not use?

[ragman]

When I bought my place, thru Chris, I realized that if you want to make an investment there are probably better ways to make money than buy a vacation property in Belize.  If you want a place to live a good part of the year and maybe cover some of the expenses then OK.  I took the income part right out of the equation so I wouldn't be disappointed. If you do not want to be stressed figure on being able to pay the full boot, without any income and buy accordingly.  

[ragman]

Peter,  I didn't buy at Bermuda Beach but I did talk to the owner/builder.  He was quite upfront with his plans when I asked him about future development on the site.

[Chris]

The one slight negative I would have with Bermuda Beach (which is a more or less completed development) is that ownership is by share certificate...this doesn't mean that you don't own your condo, you do. But, if you ask anyone which form of ownership has most value, (a) Free and Clear Title or (b) Share Certificate I think you'll find (a) takes the trophy hands down. Very few folk are going to say they prefer a share certificate to a real property title! This means that a decent development like Bermuda Beach has a little less value than it deserves at re-sale because it's harder to sell condos that are share owned.

Note that on the Share Certificate issue my emphasis is to avoid new under construction developments that offer this as ownership. In years past this was a viable option because the transfer taxes payable were lower when the developments in question were under construction. Now there is no tax advantage for buyers taking share ownership in new developments. In this day and age every NEW development should be offering (a) free and clear strata title per unit and (b) a rental management company that is wholly owned by the individual unit owners.

We have sold condos / villas that are share certificate owned but not in new developments.

[Sunshine]

Many years ago only the basic town area was declared to be in the new registration area.  This new registration title system allows for strata title registration (condo titles.)  This meant that condo type projects that were built in areas other than the town core couldn't offer strata titles.  Recently a larger portion of the island was then placed in the new registration area - meaning that the older titles are converted to the new system.  This means that condo type projects that are in the new registration area can have a homeowners meeting and vote on whether they would like to convert their corporate share ownership into strata title condo ownership. There is some criteria that would have to be met, and most certainly you would be talking about costs of around $10K US to adapt - but at least this is now an option for owners to consider.  There may be additional stamp duty costs involved if the owners of the corporate shares under-declared the true cost of their property - unfortunately this was a common occurrence with the old system. If folks that bought their condo type properties are deemed to have paid the right amount of stamp duty when they took ownership of the shares, they should be able to exchange the share ownership to titled ownership for a minimal fee of around $10 (plus their share of conversion to a strata plan.)  Soon the entire Caye will be declared (actually the entire country will eventually be on the new system) and then the corporate ownership structure for condo type properties will probably be totally phased out.

[Marty]

there is some wrong info here.

what i told Chris was it was fine to list a group of folks he thinks are fine, but that its not necessary to sorta say that all the rest suck.

99% of what he posted here is fine. this is what i thought reflected poorly on EVERYONE Chris didn't mention:

There are probably some other under construction/pre construction developments you can trust, I can't think of them right now.

[bethieb]

there is some wrong info here.

what i told Chris was it was fine to list a group of folks he thinks are fine, but that its not necessary to sorta say that all the rest suck.

99% of what he posted here is fine. this is what i thought reflected poorly on EVERYONE Chris didn't mention:

There are probably some other under construction/pre construction developments you can trust, I can't think of them right now.

Marty, how is it that you think that comment by Chris reflected poorly on everyone Chris didn't mention?  The way I am reading it is simply saying that his initial list was not inclusive and that there are probably some more trustworthy developments that may come to his mind later at which time he may share the info.   Do we all really need your filter on interpretation and protection? 

If people are looking to Chris for his personal opinions about real estate developers and developments why would you edit him in any way?   Anyone reading the list would clearly see it is his opinion-take it for what it is.  There are some lame ass developments and 'realtors' on the island that people would do well to steer clear of.  That's just a fact.