Caribbean Guide for Real Estate Investors
Because The Caribbean consists of over 7,000 islands, real estate buyers have a vast amount of property to choose from and also many different Caribbean island groups to examine. The islands are all of various different sizes and together they form what Christopher Columbus termed the West Indies. Today they are also collectively known as ‘The Caribbean’ and they stretch from Mexico to Venezuela.
Many of the Caribbean islands were previously colonies of various European nations including France, UK, Spain and the Netherlands, and to this day some remain sovereign states or overseas dependencies. Many of the larger and more popular islands are favourite tourist destinations already and now they’re developing their real estate markets to appeal to the overseas buyer seeking a Caribbean getaway.
For those in search of the ultimate overseas investment opportunity however, occasionally some of the smaller Caribbean islets come onto the market and these offer the investor the chance to own their very own desert island!
Real estate investors have an almost bewildering array of developed Caribbean island territories to choose and it would be impossible to write a country guide to each so here’s a guide to three of the most popular: -
The Commonwealth of The Bahamas actually consists of 700 islands and confusingly they actually lie in the Atlantic Ocean, they do however form part of the West Indies and were a former British colony.
The Bahamian economy is heavily reliant on both the tourism sector and the offshore banking sector. Tourists particularly from the US and UK are attracted to the main islands as English is the official language, the weather is tropical and the scenery spectacular.
The investment and second home real estate market in The Bahamas has really taken off recently since the government changed the rules of ownership of freehold property to significantly favour overseas buyers.
Bordered by both the Caribbean Sea and the Atlantic Ocean this former British island nation of Barbados is regarded as one of the most popular tourist destinations in the world. It is also recognised by the UN as the number one developing country in the world and it has one of the highest standards of living as well.
The popularity of the island lies in its fantastic climate, friendly and welcoming English speaking people, stunning natural landscape and great shopping opportunities! It is also home to an increasing number of wealthy investors who are attracted to the amazing real estate market.
The British Virgin Islands and the US Virgin Islands are a series of the wealthiest islands in the Caribbean - some of which are populated, all of which are very popular with tourists and many of which are also frequented regularly by visiting cruise ships.
Some of the British Virgin Islands are privately owned, the most famous of which is of course Necker Island which is owned by Richard Branson, and they are all blessed with beautiful white sandy beaches, stunning geography, fantastic weather and interesting and unusual flora and fauna.
Some of the other Caribbean Islands growing in popularity with property investors and real estate buyers at the moment include the Cayman Islands, Jamaica, Saint Lucia, Trinidad and Tobago - and a property buyer will need to be prepared to be overwhelmed by the availability and quality of homes for sale across the Caribbean region!
Caribbean Real Estate Buying Guide
The region known as ‘the Caribbean’ comprises circa 7,000 islands and countries that are organized into thirty territories and which either lie in or border the Caribbean Sea.
The real estate buying process for a property investor will depend on which Caribbean country or island they are specifically interested in examining and this guide looks at some of the common characteristics of purchase processes throughout the Caribbean region as well as some interesting and important anomalies that a real estate investor should be aware of.
A large percentage of the Caribbean territories have a requirement that real estate agency practices are regulated and a real estate investor should check out the specifics of the regulatory guidelines realtors have to abide by in the Caribbean nation they are interested in investing in before employing the services of an agency.
Notable exceptions include countries like Haiti for example, which is actually the poorest country in the Western Hemisphere according to CIA World Factbook statistics and which has a real estate market plagued by corruption. Basically a rule of thumb for a real estate investor looking to the Caribbean region for property opportunities, the poorer and less well developed the island or nation the less well regulated the entire purchase process.
Certain countries in the Caribbean disallow foreign freehold ownership of immovable property - Cuba is one such Caribbean country. There are often ways around these rulings with black market property deals being done quite regularly. Any real estate investor considering working outside of a country’s constitutional laws should be aware that his subsequent assumed legal rights to own the property assets purchased will not be enforceable in a court of law.
Caribbean countries such as Barbados, Jamaica and Trinidad and Tobago have active policies to encourage foreign direct investment and have regulations in place to not only allow for foreign freehold ownership of real estate but they have regulations in place granting foreign owners the same legal rights as their domestic citizens when it comes to their property assets.
It goes without saying that a property investor in the Caribbean should employ good legal representation to assist with every single aspect of the real estate purchase process - many good Caribbean based lawyers will also be able to advise a potential investor on the best areas of their particular country to look at for solid investment returns and also give guidance on which real estate agents can be trusted to give a complete and satisfactory service.
A further consideration that should be borne in mind when it comes to purchasing real estate in the Caribbean is the exchange rate between the property investor’s domestic currency and the currency of the particular island of nation where the investment is to be made. Many Caribbean countries have dollar linked to their currency, but of those who have not dollar linked to their currencies the majority still price real estate in US dollars anyway - but an investor should always check to ensure currency conversions and foreign exchange transactions will not adversely affect the profitability and affordability of an investment.
The laws on which property ownership rights are based throughout the Caribbean region have a lot to do with which nations have at one time ruled the particular island or country. For example the United Kingdom once ruled large swathes of the Caribbean region and this is why in countries like Belize and Anguilla the laws are based on English common law. In other counties there are similarities between the legal systems of the Netherlands or France for example and it is up to a real estate investor to make himself aware of the laws governing his favoured Caribbean country.
Finally, because the real estate buying process differs from country to country throughout the world, a property investor should ensure he is aware of the specifics of the purchase process in whichever country he is preparing to commit to before signing any binding contracts or parting with funds.
Hidden and additional costs, complex legal wranglings, complicated and potentially unfavourable property ownership laws etc., are all factors better off known and accepted before an investment decision is made rather than discovered half way through the buying process when it is too late to withdraw without the loss of funds.