Reality Check

I was just reading a blog post I wrote in 2007 about the island of Utila. I was on the first of three trips I have taken around the world, and I was absolutely enamored with the small Island of Utila.

Utila is one of several small islands of the coast of Honduras and is part of what is called the Bay Islands. You may have heard of Roatan, which is the largest of those islands. The Bay Islands sit alongside part of the Mesoamerican reef – the second largest barrier reef – and it is home to some of the best snorkeling and diving in the world.

When I arrived on the island I instantly fell in love. There was a vibe there that to this day I have a hard time describing. I am not sure if the experience I had there was simply because it was my first such experience in the Caribbean, or if it was because of the place I was at in my life. I only know that it is important for me to go back there and stay awhile – if only to rule it out as a possible forever home. I say that because at the time of my first visit I was absolutely convinced that buying real estate in Utila was a great investment. Here’s what I wrote in my blog of November 2007:

“I am convinced Utila is an investors dream, and I am in the process of buying property. I grabbed one of three beach front properties left in a well planned community on the South Reef where some of the best diving and fishing in the world is, as well as the nicest sand and water on the entire island. My 90 x 200 foot serviced oceanfront lot was only $165,000. It has a variety of beautiful trees on it, and a flat, sandy beach. The water is a stunning turquoise (the nicest I have seen and I have snorkeled and swum in waters in Dominican Republic, Hawaii, Mexico, Roatan, and the Florida Keys) with 100 foot visibility straight down, no waves, breathtaking coral reef. The water in front of my lot is as gentle for swimming as a baby would want. There is a view of the sunrise and sunset from this point, it captures the much needed eastern trade winds, and has a quality deep water dock. The village across the water, about a half kilometer away, is on a small cay of native islanders who supply Red Lobster with all its fish. There are places to buy fresh fish daily, and veggies and fruit and various supplies are brought in daily from the mainland. There is even a brand new 3 story internet cafe a short sea kayak ride away.” You can read the entire blog post, along with dozens of other posts from around the world here.

If you follow economics and real estate you will know that soon after that post in 2007 the stock market crashed, and over the course of the next three or four years real estate throughout North and Central America took a nose dive. Prices dropped by almost 50% in many areas, and are only now recovered back to their previous high levels. It just goes to show you, regardless of what any realtor or investor (including me) says, there is no guarantee when you buy investments. I was soooooo convinced I would make some money buying in Utila. In fairness, people buying real estate in 2007 in Calgary or Toronto also lost money over the next number of years, so the problem was not Utila - it was simply the usual cycle of up and down. Timing in real estate is everything, just like in the stock market. Buy low sell high is always the ideal, but it is easier said than done. I was lucky in a way, because as it turned out, the lot I bought in 2007 was in a development that did not approve my building plans, and my offer was conditional of their approval. Here’s what I wrote in my blog back then:

“On my lot I will be building a beach cabana with outdoor kitchen, a large air-conditioned tree house with master bedroom and bathroom, a guest hut, and an outdoor bathroom. These structures (except the cabana) will all be easily removed if/when I want to build a permanent home on the lot, but will allow me to immediately use the property as a vacation rental (both for myself and others). Rental properties are in high demand here, as divers come here to get there master diver tickets and stay 3-6months.”

In just over a week Stephane and I will head to Utila. Like many people, we have had the romantic dream of living on a tropical island where there is nothing to do all day but listen to the crashing of waves. This is our chance, once and for all, to embrace that to see if it really is all it is cracked up to be. So if you too have had the dream and want to compare it to reality, follow me on Twitter at @twostarretiremt where I will be updating daily.

We will be staying in a house just down the beach from the lot I tried to buy ten years ago and we have committed to staying there a minimum of two months: long enough to see the good, the bad, and the ugly of secluded ocean front living. It is a 2 bedroom house with a long dock going into the water. At the end of the dock is a 2 story cabana for afternoon naps. You can dive off the end of the dock and be snorkeling the amazing reef which is visited regularily by dozens of tropical fish, rays, sharks, and dolphins. We will be living in a National Geographic magazine! Here's a great picture of our dock:

We will be quite alone there – no close neighbours: only some nesting turtles and thousands of crabs. There are no roads, no street lights, and it is accessible by boat only. Stephane is insisting he buy a Wilson volleyball as we will be living our very own version of Castaway.

Once a week, we will go to town to stock up on water and supplies and to meet up with our realtor to check out some properties that are for sale on the island. We want to compare the benefits of living in or near town with living on a boat access only beach. We will update you on that as well as our day to day thrills and challenges. By the end of the two months I suspect we will be over the notion that we want to live on a tropical island, or we will be busy building a tree house!