- What is the average cost of monthly expenses and percentage of days rented vs vacant?
- Can you send weekly rental/expense history?
- Will you provide details on how each owner decides on which 5 weeks are determined each year?
- What happens with the other 2 unclaimed weeks (10 owners x 5 weeks = 50 weeks) each year?
- Please provide any additional information regarding the local areas around the home.
- What opportunity is there to visit a property as a prospective buyer?
- Is there a screening process for prospective buyers by the other owner’s?
- What is the rental process and what are the owner expectations/commitments?
- How are rental income funds processed and distributed?
- Do you offer financing? And, if so, what are the terms?
- Can I sell my share when I want?
- How do we get to Placencia?
- What are the tax advantages to investing in Belize?
- How does the rental system work for owners?
What is the average cost of monthly expenses and percentage of days rented vs vacant?
Historically the existing beach homes have run a very high occupancy rate. The last several years have produced a nice profit for the owners in each home with each owner typically using the home two weeks and renting out the remaining weeks.
Our detailed proformas show average rental rates, staff expenses, and other fixed/variable expenses. Serious investors can request a proforma for the properties they are considering.
Can you send weekly rental/expense history?
AREI Belize maintains a very detailed bi-weekly rental income and expense history on the existing homes that is provided to each owner. These detailed financials are available for review in the due diligence period of a potential purchase.
Will you provide details on how each owner decides on which 5 weeks are determined each year?
AREI Belize utilizes a draft system to ensure fairness of owner bookings. Owner weeks are picked on a draft system with the owner who picks first changing each year. The first round of drafts is 2 weeks, second round 2 weeks and the final round of 1 week. The two weeks at Christmas are in most demand and generate the highest rental income of the year. In the past, owners have elected to rent out those two weeks, with the income generated used to reduce all owners expenses for the year. Owners only select weeks they wish to use or rent themselves all other weeks are allocated to the shared rental pool.
What happens with the other 2 unclaimed weeks (10 owners x 5 weeks = 50 weeks) each year?
The two weeks over Christmas/New Years are rented out and not for owner use with the income used to reduce all owners’ expenses for the year. This does two things: it reduces all owners’ annual expenses by $15,000 to $20,000 and makes the whole week pick process less contentious as these two weeks would always be the first weeks selected in draft. For the last 2 years, we have actually emailed owners asking them what two weeks they wanted to pick for their use well in advance of the October draft (due to strong rental demand and bookings extending well in advance of 6 months) and so far have only had one week conflict (which the two conflicted owner’s got together on their own and worked out) thus ALL owner’s got their first pick.
Please provide any additional information regarding the local areas around the home.
Our position on the Placencia Peninsula is the ideal blend of being far enough out of village to be in an exclusive high end residential area, but close enough to go enjoy the many nearby places to eat, grocery stores, etc. The best restaurant as voted by the Belize Tourism Board is less than a mile from the Villas, as are two very nice resorts in either direction. So if the beach, diving, and fishing are not enough, Placencia provides great access to inland jungle activities that are amazing. AREI Belize would be happy to provide a very detailed activity/vendor list that is supplied to renters during their stay.
What opportunity is there to visit a property as a prospective buyer?
AREI Belize strongly encourages all prospective buyers visit the properties and Placencia. As part of the due diligence process between us and the prospective buyer, we will share relevant financial info, and more importantly, initiate communication with our current owners and the prospective buyer. We highly encourage buyers to reach out to our owners – we believe it is the best “review” of our products and services!
We offer prospective buyers a discount of 50% off the published rental rate and, upon purchasing an ownership interest, any rental amounts paid would be applied to the down payment. Obviously, until this home is finished you would not be able to stay in it. However, we have other properties nearby that we have sold, etc. and would offer the same 50% discount on those properties as well.
Is there a screening process for prospective buyers by the other owner’s?
Yes, we will have detailed discussions either on the phone or in person with potential owners before purchasing an ownership interest. Basically, Vision Properties spends time speaking with prospective owners to gauge alignment of interests and ensuring the proper community fit with what we have and our owner culture. Since we have a really good group of owners and properties with very positive rental income, AREI Belize can selectively add to their group of owners. Summary of current owners in Villa Tipsy Gecko house (some own more than 1 share) is below:
- Couple from Maryland, late 50’s
- Couple living in Germany from TX originally, late to mid 50’s
- Lady from TX, late 50’s
- Couple from Canada, he is early 50’s
- Couple from New Mexico, mid 50’s
- Lady from Canada, early 50’s
- Lady from California, late 40’s
- Villa Groovy Gecko and Jammin has similar demographics with 3 owning shares in both homes.
What is the rental process and what are the owner expectations/commitments?
In Tipsy Gecko and Groovy Gecko, an owner in each home is now fielding rental inquiries/questions and doing leases. We handle all the bookkeeping, management, and has an accountant in Belize who does the required tax filings, etc.
How are rental income funds processed and distributed?
At the end of each year rental income is distributed equitably to each owner based on actual rental income and owners usage. Owners can also rent to friends, family business or whoever locally, which 100% of income is retained by the owner, but the owner is 100% liable for any damage by such renters. If you handle the rental yourself, your guests are still liable to pay 9% hotel tax before arrival as we have to register all guests and pay such tax to not risk issues with our hotel license and Belize Tourism Board.
Do you offer financing? And, if so, what are the terms?
While cash is always preferred we do offer financing. Terms of such financing are currently 50% down, with an interest rate of 7.5%, over a term of 3 years on a 20-year amortization.
Can I sell my share when I want?
Yes you can and when all shares sold we can use the current house websites for such purposes. We have had one owner in Villa Tipsy Gecko sell her shares to date. We also offer as an additional exit strategy, a trade in program if you want to build a full-time home in the future in Placencia.
How do we get to Placencia?
All International flights currently fly into Belize City (BZE). A new international airport is under construction 6 miles north of the Villas, it is not complete and the completion date and availability of international flights are yet to be determined. Currently, both Southwest and Copa Airlines are opening direct flights to Southern Belize from a number of major airline hubs.
From BZE you can take a short 30-minute commuter flight on Maya Island or Tropic Air. We receive a 20% discount on Maya for booking and pass this discount along to prospective buyers. You can also take a shuttle or rent a car at BZE and drive down. The drive is about 3 hours on all paved roads, a good bit of which is through the Maya Mountains and pristine rain forest along the Hummingbird Highway.
What are the tax advantages to investing in Belize?
You will own a share of a Belize company. Owners only pay income tax profits when / if money is expatriated back to the U.S. There is an IRS form that all U.S. Citizens must file as the owners of a foreign company. Further information can be provided after purchase. We are not familiar with Canada or other country reporting requirements.
How does the rental system work for owners?
In addition to the information provided in our previous Q&As, we have a proven and established system that has achieved a high occupancy across the properties. With proven results for both our owners and highly rated reviews on sites such as VRBO, there is clear evidence that the current systems work well. Please take a few moments to review VRBO as a testament to our success with renters.