Two years ago this month, I visited Roatan with my wife and four kids for the very first time. Like many first-time visitors, our main reason for coming was scuba diving. And like an increasing number of new visitors, we found out about Roatan from an episode of HGTV's Househunters International.
After a quick internet search, we found Roatan Life Vacation Rentals and booked a stay at the Coral Vista Villas (#2, I think) in West End. Not surprisingly, we had a great time and even after we left, Roatan kept coming up in conversation. So, on a whim, about eight months after we got back, we looked into Roatan real estate and found that not one but two of the Coral Vista Villas was on the market.
We contacted Mike Carter at Roatan Life, and he helped us understand both the Roatan vacation rental market and the rental performance of the villa we were interested in. It turned out that Roatan was not only a great place to visit, it was potentially a very good investment too. And the rest, as they say, is history.
Roatan Vacation Rentals as Investments
Interestingly, one of the most frequent questions I get when I speak with people interested in renting our house is how we came to own the house and what's involved in buying on Roatan. They are interested in the process, the differences between owning in Honduras and the US or Canada, and they are interested in the numbers - what does it cost to buy in Roatan, how much can you make from renting?
Well, any subject that's interesting to a reasonable population of renters is fair game for a blog post, so I thought I would share what we've learned over the past year or so.
WARNING: I am not a licensed real estate broker. I am not an investment advisor. And I am definitely not an accountant. I am a vacation rental owner sharing his limited experience. If you want detailed insight into the market and opportunities, do what I did: call Mike.
Lessons from Buying a Roatan Vacation Rental
Considering the entire purchase process and our overall rental experience to date, here's a summary of what I think we can confidently claim we learned so far if you're thinking about taking the plunge:
- Roatan real estate is more affordable than most of the Caribbean given its relative state of development and relationship to Honduras, but it's also considered higher risk for the same reasons.
- It's a cash market - North American banks won't write mortgages in Roatan, and Honduran interest rates are very high (if available at all).
- Above a certain size or amount of land, non-Hondurans cannot own real estate on Roatan directly. The work-around is to put the house in a corporation and own that. It seems a little strange, but it works. You need a trusted lawyer for this. We used Tugliani & Tugliani... twice. Highly recommended.
- Before deciding what or where to buy, get crystal clear on one thing: are you buying a vacation home you intend to rent once in a while, or are you buying a vacation rental you intend to stay in once in a while? Think about that hard. It's critical.
- Assuming the latter, that you're in this to rent it, be unique! This isn't a real estate tip, it goes for any business. If you are truly the "best" or "most" of something that matters, you will take an unfair share of the market.
- And when it comes to choosing that unique attribute for a rental property, employ the old retail addage "there are three things that matter: location, location and location". So, choose a property that is defendably unique because there is a big difference between where someone would choose to live on Roatan and where a first-time visitor to the island who will only be there for a week would want to stay.
- Finally, make sure the place, the property and the price all line up with the way the vacation rental will be described and positioned so you always meet or exceed your guests' expectations.
In retrospect, we got lucky. We didn't understand all of this before we bought, but it is crystal clear in retrospect. Coral Vista Villas are the top performing vacation rentals on the island. They are rented more frequently than anything else on Roatan. Not because of anything special that we are doing, but because they are uniquely appealing to many vistors to Roatan and they have a loyal repeat following. In the heart of West End? Check. On the Water? Check. Private homes with high-end furnishings and a pool? Check. No other property can claim that. Unique.
Enough About Me, What About Your Roatan Vacation Rental?
As Roatan continues to draw more tourists, and vacation rentals continue to gain popularity relative to hotels/resorts, there will be more opportunity to own a vacation home and make some money with it. But there will also be increased development, so beware the "no brainer" investment. It's best to come down, take a week, contact a real estate agent like Mike Carter and walk through the 7 points above.
By the way - we've got just the place to stay while you look around!