Remaining one of the best "sure thing" real estate investment options in Latin America, Antigua, Guatemala is short on bargains but has a strong history of good rental returns and appreciation.
Pick up any magazine or newsletter about living abroad and you'll find plenty of articles and advertisements about buying a home in Mexico or Central America. There is seldom any mention of the closest Central American country to the U.S. or Canada: Guatemala.
That doesn't mean you'll find fire sale prices though in Guatemala's most attractive city: Antigua. The city is small and the compact historic district has a limited amount of inventory at any time. It is a UNESCO World Heritage site with easy airport access about an hour away. The climate is warm and sunny but not too hot, so it's a desirable place for both tourists and retirees. In addition, foreigners are competing with wealthy local investors from Guatemala City.
I met with Marlon Catalan in the Century 21 Antigua Fine Home office to talk about the local market and sample prices.
We spoke to Brian Wilson back in 2008 about high-end real estate in Antigua and since then a lot of factors have come into play. There was the U.S. housing crash, the temporary rise in the Canadian dollar value, and some ups and downs in Guatemala's economy. Where is the market now, as we head into the second half of the 2010s?
The real estate buyers in this city back then were about 40% foreign and 60% local. Now it's more like 20% foreign and 80% local. We have a lot more buyers from the capital who want a vacation home they'll use for three or four weeks a year and rent out the rest of the time. For many of them this is not even their second home: it's their third or fourth one. They see a real estate investment in a prime area as they safest one they can make in this country.
How has this affected prices and what should potential vacation or retirement buyers know?
Many people think they can buy something for cheap here just because Guatemala is a developing country. They say they want a renovated colonial house near the center and when they see the prices they're surprised. They may tell me, "That's how much I would pay where I live now!" I have to just tell them I'm sorry, but this is a highly desirable area and it's a very active market. You many find something small for $200K to $250K, but those houses and condos move very quickly. Often we have more buyers than inventory at that level. It gets a lot better when you have $300K or more to spend. We have one now that's five bedrooms and a heated pool for $360K.
What should buyers used to luxury homes expect to pay for something impressive in this city?
There's usually a good selection in the $500K to $850K level in a good location near the center, in move-in condition. We tend to only have a few colonial properties to choose from that are more than a million dollars. Many of those are large family homes that are sold privately by word of mouth. We don't even know they're for sale until we see a work crew doing renovations all of a sudden. It's easier to find a luxury property with lots of high-end finishes outside the center, with more space and some land. You get a lot more for your money if you don't mind being a bit further out and there are some nice gated community developments. This is better for retirees or permanent residents though as the rental potential is not as great.
What are some guidelines to keep in mind to make sure the investment is a good one in terms of resale value and rental return?
In general, the closer to the historic center the better as that makes the home easier to rent and easier to sell. Tourists renting a home usually want to be walking distance to the main plaza. One to three bedrooms is the easiest rental range. The blocks south of the center are more desirable and command more of a price premium than those north of the square. Near the center the weekly rental prices range from around $500 to $1,200 and the weather is nice here most of the year, so the rental return can be consistently good.
What are some of the unique challenges of investing in Guatemala? What should potential buyers be aware of?
Investors looking to build residential or commercial properties should be aware of numerous restrictions in the Antigua area. There are strict guidelines that need to be followed to ensure that anything being built adheres to architectural standards imposed by Antigua's cultural preservation laws. Finding available land to develop isn't an easy task, either. Many landowners don't want to sell.
Anyone buying property needs to have a reputable lawyer review all pertinent documents to be sure that the property is properly represented.
Let's say I'm an investor with a large budget and I'm intending to use the property as my own home. What could you show me right now?
We have a beautiful home listed for $835K that is nearly 6,000 square feet, with a large garage, wine cellar, sauna, and landscaped gardens. One of my current listings is a huge six-bedroom house in the most exclusive gated community, walking distance to the center, for $950K. There are some nice building lots for sale that would allow you to build a custom dream home to your specifications for a bit less than that.
To see a variety of homes for sale in the area, go to the Antigua Fine Homes Century 21 website.
Interview conducted in February 2015 by editor Timothy Scott.