While last few years have seen an unprecedented expansion in US real estate markets, recent signs suggest that the air is beginning to leak out of the property bubble. Mortgage rates are rising and the average time to sell a home is increasing as well.
With the US marketing slowing, it’s a good time for […]
Written on November 5th, 2006
Read more articles on Real estate investment.
While last few years have seen an unprecedented expansion in US real estate markets, recent signs suggest that the air is beginning to leak out of the property bubble. Mortgage rates are rising and the average time to sell a home is increasing as well.
With the US marketing slowing, it’s a good time for real estate investors to look outside the United States for opportunities. One such opportunity is in the Caribbean. Investment in island vacation homes can be a shelter from a possibly stormy US real estate market.
What to Look For Before investing in Caribbean real estate (or any overseas property, for that matter), you should weigh a number of factors that affect property values and the ease with which you can invest. In most cases these issues are minor and can be solved with the help of a local realtor, but you should be aware of them all the same.
Local Property Laws You should first know the local laws regarding the purchase of land by foreigners. In some countries you cannot purchase property without forming a local corporation. Other countries have more lenient regulations. In Honduras, for example, you can purchase up to ? of an acre of land in your own name without forming a corporation. If you do need to form a local corporation to buy your property, make sure you use a realtor who can help you with this process.
Visa Requirements If you plan to use the property for short vacations, visa requirements are not a significant issue. But if you plan to take extended vacations, you will need to know the local visa requirements.
For many countries in the Caribbean US citizens can stay for up to 30 days without a visa. After that period you will need a visa extension that can lengthen your stay for several months. After that you may have to leave the country before reentering.
Travel Time Are you planning to turn the property into a vacation rental? If so, ease of access is an important factor to consider. Is airline service available to the area? Do any airlines fly directly from US cities?
Medical Services An increasing number of Americans looking to retire outside the US and this influx of retirees has an important affect on property values. Medical services are a critical factor for these retirees. If an area has good medical care and inexpensive prescription drugs, this can boost property values.
Caribbean Opportunities To many people the term “Caribbean” applies only to the archipelago extending from Puerto Rico to Trinidad. But many excellent investment opportunities also exist along Central America’s Caribbean coast or Western Caribbean. Costa Rica and Honduras are popular with eco-travelers and US retirees. Belize and the Honduras Bay Islands draw scuba divers lured by their extensive reef system.
Central America’s Caribbean coast also offers significantly better opportunities than other parts of the Caribbean. On St. Thomas, for example, homes have an average sales price of $400,000. In many attractive parts of Costa Rica the same home would start at about $60,000. Property values are increasing, so a relatively small investment can yield good returns. Smart investors should explore opportunities throughout the Caribbean.
About the Author
Mike Brown is the Office Manager for Roatan Realty, which serves the Bay Islands of Roatan, Utila and Guanaja. The company offers comprehensive listings of lo
Written on November 5th, 2006
Read more articles on Real estate investment.