Caribbean Property

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Image of Barbados
Investing in Barbados

Investment in the caribbean is taking off this year as holiday traffic to the Caribbean is increasing and the investor environment in the area is becoming more favourable: a double advantage for buyers.

The Caribbean has long been a favoured destination for Americans, and throughout the last couple of decades Europeans have caught on too, and the region is now a very mature tourist destination offering everything from classic sun, sea and sand vacations to more specialized eco-tourism, luxury spas and it’s one of the world’s top destinations for honeymoons.

It’s that tourism trade that underpins investment in the Caribbean increasing its overall appeal as an investment location. In fact, one of the most significant trends in property investment over the last few years has been the growth in dual citizenship opportunities and tax advantages in the Caribbean. St. Kitts, Dominica, Belize and Barbados have already implemented these and they are soon to be joined by Grenada and Antigua.

Knight Frank’s Caribbean Prime Residential Insight report 2014 said the number of prime sales rose by 10% to 15% in Barbados and the British Virgin islands. While prime sales are rising, sales in lower price brackets are following suit and prices are stabilizing following the 2008 crash.

The great advantages for individual investors in the Caribbean region are that many islands have few or no residency requirements, and many operate Citizenship by Investment programmes deliberately to foster overseas investment. The terms of the programme offer to grant citizenship to investors in the local property market, making it far easier to do business in their more favourable tax environments and simultaneously improving liquidity in local property markets and in the local economy as a whole.

The World Travel and Tourism Council has predicted that Grenada, shortly to introduce its own Citizenship for Investment programme, will be the fastest growing market in the region between 2011 and 2021. The organization expects the programme to benefit not just high net worth individuals, but the market as a whole, by its positive impact on property values.

One solid recommendation for the returns possible from Caribbean investment is the increase in Chinese investment in the region. By 2013, according to analyst Richard L. Bernal, China was the area’s largest single source of foreign investment and the rise in Chinese involvement in the region continues.

And it’s not just the Chinese: foreign investment from all sources reached a record high in the Caribbean last year, according to the UN Conference on Trade and Development. Trade flows to the region increased by 18%, to total an estimated $294bn, or 38% of the world’s total.

It’s the tourist market in the area that underpins the growth of its property market, with Google search engine activity indicating a growth in searches for ‘holidays in the Caribbean’ of 48% in the year to January 2014.

That upsurge in interest in the region is confirmed by James Mannings, of Top Villas, who comments that ‘we have seen an increase of 31% from last year… it certainly seems as though those renting or looking to rent in the Caribbean are expected to benefit in 2014 and onwards with the continuing popularity of the islands.’

Check out our property search for Barbados properties for sale

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The Con Man by Ken Mitchell Every cloud has a silver lining, even the black cloud of recession.

One of the upsides is that fraudsters running Ponzi schemes hit a wall, as they can’t keep the scheme as their cash dries up.

The latest allegations of property fraud with a Ponzi scheme surround Canadian father and son team Frederick and Derek Elliott.

Lawyers have filed evidence at a Miami Court claiming the pair embezzled $100 million from more than 2,500 investors from all over the world in two separate fraud plots.

The first case, according to the court documents, involves $32 million raised from 1,600 investors between 1987 and 2001 for developing the Sun Village Resort in Puerto Plata, Dominican Republic.

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Fancy three nights accommodation free of charge in one of the most modern, luxurious and relaxing resorts in the Caribbean? If your answer is a YES, then you can. The developers of the new Sapphire Beach Resort in Belize are currently offering interested investors exactly that. And if you end up buying one of their fully furnished unit’s your airfare will be deducted from the cost of your purchase.

What excuse do you need to holiday in paradise for free?

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Sapphire Beach

Would you like three nights accommodation free of charge in one of the most modern, luxurious and relaxing resorts in the Caribbean? If so, you can. The developers of the new Sapphire Beach Resort in Belize offer interested investors exactly that. And if you end up buying one of their fully furnished unit’s your airfare will be deducted from the cost of your purchase.

What excuse do you need to holiday in paradise for free?

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Ambergris Caye Belize Beach on Ambergris Caye [credits: forevernewbie via flickr]

With cruise ship tourism up by 300% in the last five years and swanky new developments all around the island, Belize has quietly worked its Caribbean magic to become a hot and sought after destination for property investors.

With a fixed currency of two Belizean dollars for every U.S. dollar and English as the primary language, it is no wonder that the island of Belize is becoming the flavor of the moment.

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Nuwire Investor spotlights five locations worth investigating for overseas property investments in the Caribbean:

  • Trinidad & Tobago,
  • Aruba,
  • The Dominican Republic,
  • Bonaire & Curacao,
  • Roatan (Honduras) and The Corn Islands (Nicaragua)

The article pays particular attention to levels of prosperity and crime and whether or not locations are inside or outside the hurricane belt (Aruba, Bonaire & Curacao, Trinidad & Tobago).

Corn Island Islas del Maiz
Corn Island Islas del Maiz [photo credit to mixedeyes]

These locations vary greatly, not least in size. The Corn Islands (Islas del Maiz), the first of the four we shall look at in more detail, have combined area of 13 square kilometres and a population of 8,000 people compared to the Dominican Republic’s 49,000 square kilometres (slightly larger than Denmark). Although the Corn Islands have undoubted attractions as holiday destinations, it seems that their size is going to limit marketability for serious property investment. Put simply, there aren’t miles and miles of beaches ‘like the one in the picture’. In their favour are a recent reduction in the crime rate and the direct air service from Managua to Great Corn.

The tranquility of the Island of Roatan, Honduras
The tranquility of the island of Roatan, Honduras [Photo credits VideoVik]

Roatan is the largest of Honduras’s Islas de la Bahia islands (which include Utila and Guanaja) is a different proposition. The island has a permanent population of 30,000 but welcomes as many as eight times as many tourist visitors each year. The island is 50 km in length, has an area of about 100 square kilometres and is close to the world’s second largest coral reef. The island has a fully fledged real estate market with properties ranging from modest to extremely luxurious. Investors need to check on hurricane withstanding capability. The island is served by regular flights from San Pedro Sula and Tegucigalpa and a ferry service from La Ceiba. Honduras seems to have an extremely open policy towards foreign direct investment but Roatan is suffering the effects of pollution arising from inadequate sewage and water treatment facilities.

Tobago Cays Beach
Beach on the Tobago Cays [Photo credits to Mjr.Phule]

Trinidad & Tobago with an area of about 4,800 square kilometres and a population of 1.3 million is one of the world’s growth hot spots currently with GDP growing at 12%. However, inflation (8%) and interest rates (11.75%) are high. The government website provides useful information for those considering property investment in the country. As the Caribbean’s biggest oil producer and the links with other parts of the world, Trinidad and Tobago have extra property market strengths in addition to the tourism industry. Rental yields are good, around 4 to 6% in Trinidad and upwards of 10% on Tobago (which is more dependent on tourism. Licensing requirements have recently been introduced for foreign property investors on Tobago.

Beach at Divi Aruba Beach Resort
Beach at Divi Aruba Beach Resort [photo credits to Travelling Pooh]

Finally, the a-typical Caribbean island of Aruba, an overseas territory of the Netherlands, which has an area of 193 sq km.. Like Trinidad (and Curacao and Bonaire) Aruba is close to the coast of Venezuela and also has important oil reserves. Unlike almost everywhere else in the Caribbean, the island has a very dry climate. The island is prosperous, law abiding and heavily dependent on tourism. Inflation at 4.7% is quite high. The island has well developed property and holiday rental markets. The local currency is tied to the US dollar and there is a good range of property at reasonable prices for those converting from sterling or euros. Despite the proximity of Venezuela and the Lesser Antilles, there are no scheduled ferry services. Several US and European cities (Gatwick & Heathrow included) have direct connections to Queen Beatrix airport at Oranjestad.

The Caribbean is a playground of the rich and famous. It is also seen as business-friendly. Perhaps surprising, then, that some Caribbean countries have strongly restrictive almost socialist-style housing market systems, with strict rent controls, and strong security for tenants.

In a study, the Global Property Guide examines the landlord and tenant systems of 19 Caribbean countries and territories in terms of rent control, security deposits and tenant eviction. With contributions from local law firms, each economy is rated as strongly pro-tenant, pro-tenant, neutral, pro-landlord or strongly pro-landlord.

The study notes that, against popular notions, a ‘pro-tenant’ rental market is actually harmful to tenants in the long run. It discourages landlords from investing in new rental units, leading to less supply. As demand for rental units increases with population growth, shortages develop. Landlords lose the incentive to maintain and upgrade their rental units. The quality of the existing rental housing stock deteriorates.

The most restrictive rent control law in the Caribbean is enforced in the US Virgin Islands. For housing accommodations, the maximum rent ceiling is the rent in force and in effect on July 1, 1947. For buildings created and/or rented after July 1, 1947, the maximum rent allowed is the first rent charged for the unit.