Guatemala 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 Guatemala City, is around US$140,000.
In the long term, terrorism and environmental issues are just some of the reasons to see the whole of Latin America as one of the most safe and sustainable resources in the world.
The Prices for Property in Guatemala
Property prices in developed countries can’t grow forever. They are more likely to stabilise, if not, to drop after the well known “real estate bubble” bursts.
On the other hand, in Latin America property prices have just started to react to the increase of demand. Despite circumstantial economic ups and downs, price tendencies are definitively on the raise.
Profits for Guatemala Properties
The average rental yield for a property in Guatemala is about 10% to 12% a year, over the value of the property, for permanent rentals. For holiday rentals, it may vary, depending on the area the property is located and the demand it faces in a particular period of time. It is commonly higher, but seasonal variations it make it harder to estimate average profits.
In case you need more information or have doubts on any of these issues, the specialised staff in January First Real Estate will be glad to answer all your questions, click here.
Buying Real Estate in Guatemala
Guatemala (pop. 13 million, GDP/cap US$ 2,100) is the Mayan heartland of Central America, and its indigenous culture is alive and well. That culture survives in the ancient ruins of Tikal, in the Mayan/Catholic rituals of Chichicastenango, and the blazing colors of everyday Mayan dress.
Emerging from a 36 year civil war in 1996 in which horrendous human rights abuses were committed, Guatemala has yet to fully recover.
Buyers may find Guatemalan property cheap, but then, Guatemala does not have a great variety of ‘purchase destinations’ to offer.
There are no good beaches. Foreigners buy in Antigua and on Lake Atitlan – and that is just about that: tourism destinations abound, including Tikal and the whole Peten area around Tikal. But a tourism destination is not always a living destination.
Antigua (pop 22,000) is a charming Spanish colonial town. Though earthquakes have done much damage over the centuries, there is much Spanish heritage. It is a refuge for elite Guatemalans, being only 45 minutes’ drive from Guatemala City, the capital, which is highly polluted and congested.
People keep coming back to Antigua. Eventually, they reckon they might as well buy.
In Antigua prices have been rising continuously – perhaps by around 20% per annum.
An authentic 3-4 bedroom colonial home in central Antigua with a fountain and yard in the central area with 1-2 kitchens, 2 living rooms and 2 bathrooms plus maids’ quarters, would cost about $600,000. This same house would have cost $300,000 five years ago, and about $100,000 10 years ago.
For a well-maintained, larger footprint, greater scale home, the price tag could rise dramatically to around $2,000,000. A newly built, slightly out of town starter home would cost about $300,000.
Rental prices have sky-rocketed in the past ten years. A basic Antigua lodging (2 bedroom house, private parking, basic amenities) costs approximately $800 a month for basic comforts, (i.e. central hot water, small garden, basic furnishings). The same lodging would have cost $150 10 years ago.
Antigua’s climate is pleasant, around 72 degrees Fahrenheit, so no air conditioners are needed, and no fires (though December is a little chilly). Antigua’s full-time foreign community is small, at around 200 people, but many more come and go. The Antigua market is around 25% foreigners, 75% locals, escaping Guatemala City.
Guatemala City is a completely different market. In Guatemala City over 10 years, you wouldn’t have made much money owning property. The market is really very slow, not a lot of activity. The people who make money are those who buy apartments pre-contract, and then flip them over. They might buy 5-6 units, ending up with one for free.
Foreign buyers beware
Under Guatemalan law, foreigners can acquire, maintain and dispose of real property with very few restrictions. Foreigners cannot own land directly next to rivers, oceans or international borders.
Foreign investors must realize that corruption is a fact of life in Guatemala and be prepared to encounter it at all levels. Political violence has abated, but crime is high.
In 2001, Congress passed a law allowing the use of foreign currencies in all transactions. Most real estate transactions are quoted and concluded in US dollars.