Having their very own real estate in the Caribbean is a dream come true for many. Besides offering a chance to acquire economic citizenship through second citizenship programs, it’s also good for another thing: rental income.
Rental properties come in many different shapes and sizes. They can also serve several purposes, such being used for long-term and vacation rental, but this article will focus on the latter.
Vacation rentals are properties furnished to accommodate temporary tenants. Vacation villas, apartments, houses, and even resort-managed condominiums serve as a great alternative to hotels. Besides offering more competitive rates, these properties also provide a more intimate setting that is perfect for spending private moments with loved ones.
Planning to invest in a vacation rental in the Caribbean? Here are three must-haves you should be looking for:
1.The Perfect Location
In real estate, location is everything. Regardless of the purpose, the site where a home, villa, or apartment is located plays a critical role in achieving your goals.
Of course, it becomes even more crucial for vacation rentals.
Since the real estate investment entails attracting short-term renters like tourists and business travelers, you have to consider the places that these types of people frequent. In this case, there are several Caribbean countries you might want to consider, including:
Antigua and Barbuda
Known for having approximately 365 beaches, Antigua and Barbuda is a country you’ll want to consider for your vacation rental.
Although the exact number of beaches has yet to be verified, the fact remains that the country composed of twin islands has some of the most beautiful in all of the Caribbean.
Aside from offering plenty of lifestyle benefits, buying property here would also give you economic advantages. The reason? It’s all thanks to the Antigua and Barbuda citizenship by investment program.
Besides having comfortable average temperatures all year round, this nation draws tourists and high-net-worth individuals alike.
An Antigua passport grants visa-free access to more than 100 countries. It also offers attractive tax benefits for people with approved CBI applications.
There are four routes you can take to become an economic citizen of the country, but you’ll probably consider real estate as your primary choice if you’re also planning to run a vacation rental. Below are some of the things you need to remember for this investment option:
● Approved Properties – The Antiguan citizenship by investment committee has a list of government-sanctioned properties that can help you qualify for the nation’s CBI program.
● Minimum Worth of Investment – Before you can qualify for citizenship, you must first find a real estate property where you can invest at least $400,000. You also need to pay due diligence and government processing fees. This is applicable for single/one-applicant investments.
● Joint Investments – If you’re venturing to buy a vacation rental property in Antigua with a family member (i.e., a spouse), you can make a joint investment worth at least $200,000 each. The other related fees will remain unchanged.
However, if you’re joining other investors in a binding sale, the minimum required investment should be worth $400,000.
Grenada
Popularly known as the “Spice Isle,” the hilly main island of Grenada is home to many gorgeous sites and sceneries. It is also a place with plenty of nutmeg plantations.
There, you’ll find St. George’s – the capital of Grenada – adorned with colorful homes and buildings. It also houses Fort George, which overlooks the narrow Carenage Harbor.
Investing in a rental property in this country offers you more than a steady rental income. Grenada citizenship by investment also grants you second citizenship (that is, provided that you chose a property included in the government-approved real estate, invest at least $220,000, and keep it for a minimum of five years after the citizenship grant).
Once you become an investor, you can also look forward to other economic and lifestyle benefits, such as:
● Dual citizenship
● Access to excellent tourist spots and abundant natural resources
● Worry-free investment, thanks to the country’s economic stability
● General safety for you, your property, and your tenants
● Attractive tax regime, with exceptions: no inheritance tax, income tax, capital gains, or wealth tax on your worldwide assets
2.The Best Neighborhood
Besides having a generally good country or city to buy a property in, you must also look for the best neighborhood available. Remember that even if a piece of property has all the features and amenities tenants look for, it will be for naught if it is located in the wrong neighborhood.
Keep in mind that not all communities are good for rental properties, especially vacation rentals. This means you still need to scout the area and analyze whether it would be a good place for your vacation rental.
3. Excellent Potential for ROI
At this point, you’re probably facing a difficult decision regarding which property to invest in. Considering the number of vacation rentals that seem like great choices, you’ll need to find out their potential for ROI to determine if they are worth the time, money, and effort you are investing.
In other words, compute for possible profits. Figure out how much you can make after expenses. Here are some factors you need to consider in your calculations:
● Rental expenses, both upfront and ongoing (e.g., maintenance and upkeep, taxes, etc.)
● Rental income is taken from the average rental rate in the area
● Occupancy rate or the potential for occupancy based on demand and location
Remember that the goal of real estate investment is to have positive cash flow or an income that is higher than the total expenses. Regardless of the rental and marketing strategy you plan to implement, you still need to determine how well the property can perform and whether it’ll generate income consistently.
Take note: Keep your emotions out of the equation. The more you focus on real numbers, the better the result of your decision will be.
Invest in the Caribbean
Investment properties do quite well in the Caribbean due to the influx of tourists in the region. Take advantage of this fact and invest in a good property with all of the must-haves listed in this article.
AUTHOR BIO
Abire Mansoor is a Director and Licensed Agent at Citizens International, a white-glove specialist firm offering private client services necessary for citizenship, residency and investment into the Caribbean, North America, and Europe. Based in her home country of Antigua & Barbuda, she is an experienced consultant who works directly with many professional partners and advises clients worldwide. For more detail Kitchen Cabinet Wraps visit our website.