Written By: Jacquelyn Annete García Vadnais
There are many markets emerging in Central America that represent soon to be ideal places to invest in real estate. One such example is the Guatemalan real estate market. Guatemala City has become a very appealing place to consider investing in real estate due to increased stability, and development in the country. If you are considering investing in real estate in Guatemala City, consider the information below:
A Brief History of Guatemala
Guatemala has a fascinating history that is mixed between indigenous and Spanish roots. The earliest settlements can be traced back to 10,000 BC in Guatemala. The most notable period of history is where the Mayans flourished in Guatemala beginning in 2,000 BC while constructing cities such as Tikal with vast pyramids and advanced structures. To date, over 5,000 unique architectural structure have been discovered in Guatemala. The Spaniards conquered and retained control of Guatemala from the 1500’s until 1821 when the country’s land was divided into sugar cane and tobacco farms. Guatemala was briefly a part of the Mexican Empire and then belonged to The United Provinces of Central America until 1840, when it became an independent nation. Guatemala’s modern history has been plagued with long periods of civil war. In recent times however, Guatemala notably held peaceful elections in 1999. Furthermore, Guatemala has diminished its military and has entered into the Central American Free Trade Agreement (CAFTA). This has been associated with an uptick in the economy, along with modernization of many of its industries. Modern day Guatemala city is the hub of the country, it contains the many churches, several mosques, and synagogues, famous museums, galleries, and comprehensive transport options to the fascinating natural and cultural sites available in the rest of the country. Guatemala City is also a hub of international commerce for the nation.
Top Reasons Why Investing in Guatemala City, Guatemala is a Wise Decision
In spite of Guatemala’s complex history, there are opportunities for investors to benefit from by investing in property in Guatemala, particularly Guatemala City. The top reasons why investing in Guatemala City is a wise decision are listed below:
Strong Potential for Tourism & Expat Tenant Opportunities
Guatemala has some of the most incredible tourism locales in the world. Many of these sites are quite remote, which requires tourists to stay in Guatemala City for some time. This creates a tourism opportunity for landlords to benefit from short-term rentals from tourists looking to see incredible places such as Tikal or Antigua.
Established Trading Relationship with the United States
Guatemala has an established trading relationship with the United States, which means that business infrastructures are in place to successfully conduct commerce between the two countries. It will be easier to find lawyers with expertise and it will also be easier to negotiate real estate sales agreements as well.
Strong Rental Yields
Guatemala City has strong rental yields that can range between 10 to 17% depending on the overall size of the property. Real estate investors have a lot to gain from leasing properties within Guatemala City to tourists or expats that are assigned there for professional assignments.
Established Landlord Protection Laws
Another benefit of owning property in Guatemala is that there are contractual protections favoring landlords when dealing with terminating the lease of tenants. This is an advantage because many countries make it almost impossible to evict tenants not adhering to lease agreements. Guatemala enables landlords to enforce provisions of their lease contract when applicable to the circumstances.
Factors to Be Aware of When Investing in Guatemala City, Guatemala
While Guatemala City does have many benefits there are several risks to be aware of when deciding whether investing in land there is a wise decision. The common pitfalls are listed below:
High Taxation on Rental Income for Nonresidents
Guatemala imposes a tax of 25% on rental income earned by nonresidents. Investors need to factor this into their metrics to be sure they will be making a sufficient return on their investment.
Social & Political Instability
Guatemala has a long history of political instability. This political instability has been due to conflicting indigenous groups, issues left by the Spaniards, and high-profile political corruption. Investors need to be fully aware of the risks of investing in Guatemala in order to avoid future issues.
High Levels of Crime
Guatemala’s strategic location as a link between North and South America has proven as a double edged sword, as crime has also found its way into large metropolitan areas, such as Guatemala City. Investors need to fully understand the pervasiveness of crime and corruption in Guatemala, and assess the risks for their real estate portfolios. While much of Guatemala City is free of crime, it is still a risk to consider carefully.
Final Remarks
Guatemala City offers investors an excellent long-term potential investment. Guatemala, like many other developing markets, does have the potential for robust economic growth, which will create many jobs in the future. For investors looking to purchase property while it is still affordable, Guatemala City could be an excellent location to consider for a low buy in and high return in the long-term when the country continues to develop and eliminate its current corruption issues. Guatemala City would be at the forefront of this economic growth and with Guatemala’s favorable relationship with the United States, there would be many potential future commercial opportunities within Guatemala that require apartments to be available for tenants relocating for opportunities within Guatemala City. Guatemala City is a market to watch in the coming years as it has the potential to be built up like many of its neighbors such as Panama City was long ago. It will be fascinating to see what the future brings for the real estate market in Guatemala City.
--
Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting.
Jacquelyn has a JD/ MBA from Suffolk University, an LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
There are many markets emerging in Central America that represent soon to be ideal places to invest in real estate. One such example is the Guatemalan real estate market. Guatemala City has become a very appealing place to consider investing in real estate due to increased stability, and development in the country. If you are considering investing in real estate in Guatemala City, consider the information below:
A Brief History of Guatemala
Guatemala has a fascinating history that is mixed between indigenous and Spanish roots. The earliest settlements can be traced back to 10,000 BC in Guatemala. The most notable period of history is where the Mayans flourished in Guatemala beginning in 2,000 BC while constructing cities such as Tikal with vast pyramids and advanced structures. To date, over 5,000 unique architectural structure have been discovered in Guatemala. The Spaniards conquered and retained control of Guatemala from the 1500’s until 1821 when the country’s land was divided into sugar cane and tobacco farms. Guatemala was briefly a part of the Mexican Empire and then belonged to The United Provinces of Central America until 1840, when it became an independent nation. Guatemala’s modern history has been plagued with long periods of civil war. In recent times however, Guatemala notably held peaceful elections in 1999. Furthermore, Guatemala has diminished its military and has entered into the Central American Free Trade Agreement (CAFTA). This has been associated with an uptick in the economy, along with modernization of many of its industries. Modern day Guatemala city is the hub of the country, it contains the many churches, several mosques, and synagogues, famous museums, galleries, and comprehensive transport options to the fascinating natural and cultural sites available in the rest of the country. Guatemala City is also a hub of international commerce for the nation.
Top Reasons Why Investing in Guatemala City, Guatemala is a Wise Decision
In spite of Guatemala’s complex history, there are opportunities for investors to benefit from by investing in property in Guatemala, particularly Guatemala City. The top reasons why investing in Guatemala City is a wise decision are listed below:
Strong Potential for Tourism & Expat Tenant Opportunities
Guatemala has some of the most incredible tourism locales in the world. Many of these sites are quite remote, which requires tourists to stay in Guatemala City for some time. This creates a tourism opportunity for landlords to benefit from short-term rentals from tourists looking to see incredible places such as Tikal or Antigua.
Established Trading Relationship with the United States
Guatemala has an established trading relationship with the United States, which means that business infrastructures are in place to successfully conduct commerce between the two countries. It will be easier to find lawyers with expertise and it will also be easier to negotiate real estate sales agreements as well.
Strong Rental Yields
Guatemala City has strong rental yields that can range between 10 to 17% depending on the overall size of the property. Real estate investors have a lot to gain from leasing properties within Guatemala City to tourists or expats that are assigned there for professional assignments.
Established Landlord Protection Laws
Another benefit of owning property in Guatemala is that there are contractual protections favoring landlords when dealing with terminating the lease of tenants. This is an advantage because many countries make it almost impossible to evict tenants not adhering to lease agreements. Guatemala enables landlords to enforce provisions of their lease contract when applicable to the circumstances.
Factors to Be Aware of When Investing in Guatemala City, Guatemala
While Guatemala City does have many benefits there are several risks to be aware of when deciding whether investing in land there is a wise decision. The common pitfalls are listed below:
High Taxation on Rental Income for Nonresidents
Guatemala imposes a tax of 25% on rental income earned by nonresidents. Investors need to factor this into their metrics to be sure they will be making a sufficient return on their investment.
Social & Political Instability
Guatemala has a long history of political instability. This political instability has been due to conflicting indigenous groups, issues left by the Spaniards, and high-profile political corruption. Investors need to be fully aware of the risks of investing in Guatemala in order to avoid future issues.
High Levels of Crime
Guatemala’s strategic location as a link between North and South America has proven as a double edged sword, as crime has also found its way into large metropolitan areas, such as Guatemala City. Investors need to fully understand the pervasiveness of crime and corruption in Guatemala, and assess the risks for their real estate portfolios. While much of Guatemala City is free of crime, it is still a risk to consider carefully.
Final Remarks
Guatemala City offers investors an excellent long-term potential investment. Guatemala, like many other developing markets, does have the potential for robust economic growth, which will create many jobs in the future. For investors looking to purchase property while it is still affordable, Guatemala City could be an excellent location to consider for a low buy in and high return in the long-term when the country continues to develop and eliminate its current corruption issues. Guatemala City would be at the forefront of this economic growth and with Guatemala’s favorable relationship with the United States, there would be many potential future commercial opportunities within Guatemala that require apartments to be available for tenants relocating for opportunities within Guatemala City. Guatemala City is a market to watch in the coming years as it has the potential to be built up like many of its neighbors such as Panama City was long ago. It will be fascinating to see what the future brings for the real estate market in Guatemala City.
--
Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting.
Jacquelyn has a JD/ MBA from Suffolk University, an LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
Comments
Post a Comment