Researchis everything when building
Roatan at the moment is awash with construction. The aftereffects of COVID and the swarm of buyers that followed it have left Roatan with a small inventory of completed houses for sale. This has triggered a wave of building on Roatan. That is generally a good thing, although some builders are misguided, with beautiful houses being built in terrible locations or ugly buildings being constructed in great locations. We have a great need for houses in the $250K to $400K range, as well as some lower-cost communities. With so much of the island being underdeveloped, and it being an all-cash market, the buyer can always find the ideal location and build the ideal house for themselves. That is something every seller has to deal with, as often they are not competing against other houses; they are competing against a dream house.
When someone sells a house here, one of the hardest things to do is value it. In places like the USA, most houses have nearby comparisons. Sometimes, on developments, you know that an identical house sold a few months back just four doors down, so pricing is simple. Here, pricing is a skill that most realtors but very few owners have. It is natural for owners to feel that they want more money for a house than they bought it for, especially as over the years they have put money into it and maybe even expanded it. Unfortunately, however, a house is worth only what someone else is willing to pay for it.
A good listing agent will work out what your property is worth by a complex set of variables. Are there any comparables that have sold (not listed – sold) nearby? What is the square footage of the construction? What is the condition of the house? How good is the design and architecture? It is amazing how a house won’t sell because the design is such that you can’t open the bathroom door fully, or the windows don’t face the view, light bulbs are out, or parts aren’t finished. There are myriad reasons that put buyers off; however, a good agent will explain these facts and help prepare the house for listing. Many times an owner has a price already in their mind and will insist that is the price. A good agent will argue for whatever they know the price the house will sell for in a reasonable timeframe and walk away if the owner will not come close to that price. Some agents will list at whatever price, as they can use the house for advertising. The house, of course, will sit on the market, and the price will slowly be reduced until it sells.
So, what is the process if you want to build your dream house?
Locating a lot.
The choice of a lot is of the utmost importance, as a good lot always holds its value, but a good house in a bad location will lose value. Sometimes, my clients tell me they have a budget for a lot and a house, and I can see them working backward from the house they want, calculating how much it will cost, and then figuring out how much they can afford to spend on the lot. This is a mistake. The most important part of your house, regardless of whether it is your forever home or an investment, is the location. Of course, having a budget for your lot is important, but it is crucial never to buy a lot that will not make you happy just because it fits within your budget. People move here to experience beachfront living or to enjoy beautiful views of the ocean as they watch the sunset or sunrise from their deck. If you buy a lot that offers neither, then you have just undermined your resale potential.
Choosing an architect.
Obviously, the best way to choose an architect is to find houses you love and hire the one who designed them. If you have a vision in mind, they can adapt to it, as that is their expertise. If you want to use a design you saw elsewhere, that is your prerogative, but you will still need a Honduran architect to approve it. Some architects here are also builders or have relationships with builders, so they can assist with that aspect.
Once you have your plans, you will need to find a builder. Prices and quality vary significantly among builders, so it’s essential to shop around. Currently, your biggest challenge may be finding a builder with the capacity to begin your house construction right away, as everyone is quite busy. I cannot emphasize this enough: obtain and check references. You can even consider posting on a Facebook group if you are uncertain, although please refer to my notes on posting in groups elsewhere.
Roatan Municipal Office Dixon Cove
The building process
First, you need to prove that you own the lot and have paid all of the property taxes. To do this, you will have to visit the Municipal office with your title and ensure that all payments are up to date.
Next, you will need to have an architect draw up the plans, and these plans must be signed off by a licensed structural engineer. It does not matter whether the architect and engineer are in Roatan or on the mainland, as long as they are licensed in Honduras. If the plans are not from Honduras, they will need to be reviewed and approved by a Honduran architect before being submitted to the engineer.
If you reside in a place like Lawson Rock, Lighthouse, Keyhole Bay, etc., you will be subject to additional building codes, as many communities have restrictions on what and how you can build. Some of these restrictions can be quite strict. Before purchasing a lot in one of these locations, it’s crucial to fully understand these limitations. The Covenants, Conditions, and Restrictions (CC&Rs) are in place to maintain a certain standard within the community. However, complying with these requirements may add extra costs to your building project. For instance, if you are required to use terra cotta tiles for the roof, they are obviously more expensive than a standard roof. These restrictions often include more stringent setback requirements from property lines, the beach, the road, etc.
The structural engineer’s role is primarily to ensure that the house will not collapse after construction and that sewerage and graywater are managed correctly. The municipal authorities handle the approval of the building’s location.
Once the structural engineer has approved the plans, they will affix their stamp to the plans. The municipal will then send an environmental team to inspect the plans and the proposed location. This inspection is to ensure that the building will fit into the chosen location and comply with all environmental regulations. For example, mangroves are protected and must not be disturbed, and building near the iron shore or too close to property lines is prohibited. In some cases, it may be advisable to request a precheck of the location from the municipal before submitting the plans. This is especially important if you are building on a steep slope or near the iron shore. A precheck can help you adjust architectural drawings, if necessary, to meet specific location requirements, potentially saving time by presenting plans that inspectors are likely to accept without comment.
If the plans pass the environmental municipal inspection, the next step is an inspection by a civil engineer, typically about 20 days later. The civil engineer checks that the engineering is suitable for the location and that the building’s structure will be sound.
The final approval comes from the Mayor of the municipality where the building is located, either the municipality of Roatán (west part) or José Santos Guardiola (east part).
While you can usually begin construction right away, if there is a significant amount of excavation required, the authorities may not permit construction until the rainy season is over to prevent excessive runoff into the sea.
Once construction begins, there are no scheduled inspections, but inspectors have the right to arrive unannounced to inspect the work being done. Complaints from others may also trigger inspections. You can build from the foundation to the finished building without additional inspections, although it would be unusual for them not to check at some point, even though there is no strict requirement for regular inspections.
Costs
The costs provided are from before the pandemic, and it’s worth noting that current prices are high. It’s challenging to determine whether these prices are artificially inflated due to supply chain disruptions and whether they will eventually decrease. It’s possible that the surge in construction on the island is allowing builders to charge higher prices and increase their profits.
Moreover, there is a significant variation in prices among different builders. I strongly recommend selecting a builder with a solid track record and reputation. Making a decision solely based on price can be a costly mistake. This holds true anywhere, but the last thing you want is to engage in a legal dispute with your builder and end up in court to resolve issues.
To provide a rough estimate, building a basic house with plumbing and wiring but no additional finishes should cost approximately $80 to $120 per square foot. The actual cost can vary based on factors such as the construction type, your choice of builder, and the complexity of the construction. If you aim to have the house fully finished, including high-end finishes, the cost can range from $130 to $150 per square foot and may go as high as $200 in some cases.
I am more than willing to recommend builders who have been used by my clients and have received positive feedback. However, it’s always advisable to conduct your own research and request references to ensure you are comfortable with your choice.
The necessary paperwork you will need to provide or prepare includes the following:
Proof of property ownership
ID Passport or residence
Copy of the property deed
Receipt of payment for real estate taxes to demonstrate that all taxes are up to date
Copy of the green card indicating solvency of personal taxes paid
Budget for the construction work, detailing labor, materials, and expenses
From the Architect
Architectural plans (If foreign, they must still be stamped by a Honduran licensed architect)
Licensed engineer’s stamp on the drawings
From the Builder
Builder documents, including identity documents
Valid builder license
Builder solvency
Please note that buying an already-built house is generally much simpler than constructing your custom home. You can find more information on the process of buying property on Roatan by visiting this link: Buying an already-built house.