There are several ways to invest in Caribbean property. Perhaps the easiest and safest is to buy a house and land package from a property investment company. A lot of the offers available sound too good to be true. Some of them are. As a minimum requirement be sure that the company you use is SIPP approved, meaning that you can make the investment through your Self Invested Pension Plan. You should also be looking for some kind of rental guarantee scheme for the first couple of years at least but make sure you personally check to see what kind of rental return you might receive after this runs out.
Check rental levels
We always suggest calling local agents and also contacting investors already in the area, they can often be found by websites like HomeAway.com – where there are currently 10,608 properties available to rent within the Caribbean, including Richard Branson’s Necker Island.
Caribbean off-plan purchases
These can often be very lucrative, but again you’ll need to do your homework. Research the development company, make sure you are clear on where they began, what developments they have completed and their track record. If there is no provable track record then do not invest. Let someone else take the risk with new ventures.
Timeshare opportunities in the Caribbean
But again, and maybe here more than anywhere, do your research. Check out the TATOC website for more information about avoiding timeshare pitfalls. TATOC is The Association for Timeshare Owners Committees, an organisation that is run by timeshare owners for timeshare owners. Amongst their many services they run an accreditation scheme and publish a monthly list of companies who use cold calling techniques and who you should avoid.
If you decide to buy a property yourself rather than through an investment company, familiarise yourself with the necessary legislation on the island that you have chosen. A good estate agent or local solicitor, in whom you trust, can be worth their weight in gold and will help you negotiate the often labyrinthine paperwork and red tape. As mentioned regularly throughout these pages, personal recommendation is normally an excellent way of choosing service providers.
Last but not least, island or country choice is crucial to your investment. It’s not just about which island suits you and your lifestyle. As far as your investment is concerned island choice can make the difference between making a profit or ending up with a white elephant hanging around your neck. Tastes and fashions change, as do political regimes and island economies. You need to know the island’s economic past and future and what are the current and expected rental yields for a long term investment?
Islands and countries with Caribbean beaches: Anguilla, Antigua, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Little and Grand Cayman Islands, Cuba, Dominican Republic, Grenada, Guadeloupe, Haiti, Jamaica, Martinique, Montserrat, Netherlands Antilles, Puerto Rico, St Kitts and Nevis, St Lucia, St Martin, St Vincent & Grenadines, Trinidad & Tobago, Turks & Caicos Island and US Virgin Islands.
At the time of writing Jamaica tops the table with average rental yields of over 10% whilst St Lucia languishes at the bottom with just 2.3%. But there is more than this to take into account. Jamaica has a high crime rate and low GDP growth whereas St Lucia is currently enjoying rapid economic growth.
Also consider what other developments are in the pipeline for the island and how they will affect supply. What airlines currently fly to your destination and with what regularity, price and competition for the routes is there? Is the water clean, does the island have good rubbish and effluent policies? What is the cost of every day items? Are there other activities easily available such as golf, SCUBA diving, horse riding, water sports and spa treatments? These are the types of activities that potential holiday-makers will look out for.
Decide what it is that you want from your investment the most. Is it a return on your money, a place in the sun, or do you have connections with a particular island? Don’t lose sight of what it is you want by being distracted by promises of this, that or the other. Stick to your guns, research your market and the dream could be yours.