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Honduras is fast becoming one of the best options for international investment, both for internal and global situations. Diversity and vastness are its main features, besides its really low prices, compared to the global market.
When comparing a property in Europe, with another one with exactly the same features in Latin America, we can talk about prices differences that range from four, six, or even ten times cheaper. For example, a two bedrooms apartment in London costs about US$600,000, while a similar one in Tegucigalpa, is around US$90,000.
In the long term, terrorism and environmental issues are just some of the reasons to see the whole of Latin America as one of the most safe and sustainable resources in the world.
The Prices for Property in Honduras
Property prices in developed countries can’t grow forever. They are more likely to stabilise, if not, to drop after the well known “real estate bubble” bursts.
On the other hand, in Latin America property prices have just started to react to the increase of demand. Despite circumstantial economic ups and downs, price tendencies are definitively on the raise.
Profits for Honduras Properties
The average rental yield for a property in Honduras is about 10% to 12% a year, over the value of the property, for permanent rentals. For holiday rentals, it may vary, depending on the area the property is located and the demand it faces in a particular period of time. It is commonly higher, but seasonal variations it make it harder to estimate average profits.
In case you need more information or have doubts on any of these issues, the specialised staff in January First Real Estate will be glad to answer all your questions, click here.
Buying Real Estate in Honduras
A great opportunity?
Ex-banana republics can be hot tourist destinations, Honduras, for example.
Honduras (pop. 7 million, GDP/Capita US$1,225) has a bad reputation as one of the least secure countries in Latin America. There’s been a history of military power, corruption, inequality, crime and natural disasters. It is an agricultural country of succulent tropical fruit, sometimes unkindly labeled the “Original Banana Republic.”
Yet now the country seems on the verge of take-off, led by the Bay islands - Roatan, Utila and Guanaja - whose development started in 1991.
Roatan-led boom
The changes in the island of Roatan have been astonishing. In 1995, land on a beach was three thousand dollars per acre. Now it exceeds three hundred thousand dollars per acre. Much of that appreciation has occurred in the last two years, with a million cruise boat passengers per year arriving.
At first it was all retirees, but now there are many younger buyers and developers. Utila and Guanaja islands are less developed and properties are half the cost – but few properties have road access, so almost everything is by boat.
Development on Roatan has become very controversial, as scattered single family houses on beaches and hilltops are rapidly being replaced by high-rise condominiums.
Examples of condos are the Lawson Beach Club Condo on Roatan on Island Properties’ listing, with two-bedroom units, at US$650,000. Another condominium development on Roatan is the Paradise Villas, which re-sells at prices starting at US$179,000, going up to US$249,000 for penthouse units.
The Honduran government is poised to grant the Bay Islands duty free/tax haven status with an offshore banking component patterned on Panama and the Cayman Islands. The islands will levy their own taxes, and have some autonomy.
The Honduras mainland follows
Tourism on the mainland is just beginning. There are 200 kilometres of beaches on the Honduran mainland, mostly empty.
Coming from Guatemala, Omoa has the first attractive beach, dotted with with houses built by wealthy Hondurans. At the large harbour of Puerto Cortes there are nice beaches, and then, before Tela, government-owned white sand beaches (Los Micos and Miami). Tela has a new airport, and there are plans for a 5-star hotel and a 27-hole golf course.
After the beautiful (but beachless) lagoon, the next good stretch is near La Ceiba, especially to the south where excellent beaches stretch all the way to Trujillo, which is now part of the North Coast sustainable development project being funded by the World Bank. Past Trujillo is the Mosquito coast - hot, jungly, and inaccessible.
100 miles of white sand
La Ceiba offers 100 miles of white sand beach with only scattered fishermen, an international airport, immense cloud forests with waterfalls and kayaking and rafting, clear water rivers, plantations, excellent medical care, a really little great city (with mall and restaurants. Just 15 minutes outside the city you can be in isolation.
In the past two years La Ceiba prices have doubled. But you can still get a good beach lot for US$40-50,000, and build a nice house on the beachfront for US$150,000. There is a new international airport at La Ceiba, but at the moment it only has international flights out of Cayman Islands and Canada. Generally people fly to Roatan airport, and then take the 15 minutes boat trip.
Ownership woes
The Honduran constitution (Article 107) prohibits foreign ownership of property in Honduras that lies within 40 kilometers of the Caribbean Sea, Gulf of Fonseca or the international borders of Nicaragua, El Salvador and Guatemala and on any of the islands belonging to Honduras.
However, the Honduran National Congress passed Decree Law 90/90 in 1990, which permits foreign ownership of coastal areas under two different parameters. Firstly, foreigners can acquire a single property not in excess of 3,000 sq. m. in size to build a private residence. Secondly, foreigners may purchase as much land as they want for approved tourism projects. All purchases must be approved by the Ministry of Tourism.
Although the Supreme Court has upheld the constitutionality of Decree Law 90/90, caution must be made before making any purchase. The US Embassy warns buyers of the risks inherent in purchasing real estate in Honduras, citing the problems of fraudulent and lack of titles, weak and inefficient judicial system, squatting, and other property disputes.
Title problems are overblown, though large lots should be bought through a company structure, which can be 100% foreign-owned.
Honduras has a registry system like the US. It gives you a certificate, and you get a certificate from the Municipal Office that no taxes are unpaid. You can get title insurance. The attorneys have been educated in the US.
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