If you are already thinking about retiring in the Caribbean some day, but you are not ready to commit to owning a vacation property, land may be the first step toward making it happen. With no property taxes in many Caribbean jurisdictions, the carry cost of ownership is low. There are many benefits to buying land with the idea of a mid to long term hold.
After the recession of 2008/09, many of the markets in the Caribbean have been slow to bounce back. Land in many of these destinations is selling at a very attractive price, now is a great time to buy. If you plan to hold the property, you will also be able to buy in a location which is on the outskirts now, but may be ripe for development in a few years. This will allow you to buy at an even better price as the property is not in a prime location today.
Buying low and selling high is the objective with any real estate transaction. By buying today with the prospect of building later, you open up options to sell high if you decide down the road that retiring in the Caribbean is not for you. Your bet today could really payoff down the road.
Aside from the actual cost of buying the land, there are some other costs to buying and holding land in the Caribbean. In most destinations, there will be stamp duty payable at time of purchase. Stamp duty is an upfront tax, as generally yearly property taxes do not exist in most locations in the region. Stamp duties vary by country, so it’s something you would need to discuss with your realtor or lawyer.
Secondly, if you plan to finance your land purchase, there will be mortgage payments monthly. Again, depending on the amount of the purchase and amount you finance, your payments will vary. If you finance the property, you will also have legal fees, lender/broker fees.
When you purchase land, you do not have rental income coming in to assist with covering the cost of financing. This is something to consider, and possibly the only downside of purchasing bare land.
If you are looking to purchase land in the Caribbean and you would like to discuss financing this purchase, we can help. Talk to us about our financing options or if you need any assistance with finding a realtor to work with, we can assist you there as well.