There are a few benefits to buying on the smaller, more remote islands in the Caribbean. Prices are usually less and you have more beach to yourself; the secluded home in paradise is everyone’s ideal dream property. But what are the downsides to buying on these smaller islands?
Getting There
The smaller outer islands do not usually have their own international airport, meaning there is a boat or ferry trip involved in getting to your location. This doesn’t sound like a big deal, however it can add hours to your overall travel schedule. If you are limited in the number of vacation days you have, you don’t want to spend it traveling.
If you plan to rent your home out when you aren’t using it, see above. This will reduce the market for those looking to rent a villa or condo, bringing down your ROI, and potentially meaning you have to kick money into your property every month to keep it afloat.
Market Corrections
Vacation destinations like the Caribbean, tend to be more susceptible to market fluctuations when problems hit the US. This is even more magnified on the outer, less popular islands. If you are in a long term hold, it may not be a big issue however if you were forced to sell, you could see losses.
Regardless of the market conditions however, selling property on the outer islands is tough. Plan to hold onto the property for a significant amount of time while you try to sell. The more remote and secluded, the longer you will have to wait.
Financing Property on the Outer Islands
For lenders in the Caribbean, marketability is key. They do not want to get stuck with properties that will sit on the market in a foreclosure situation. For this reason, they generally avoid the smaller outer islands, sticking to the main hub (when there is more than one island in the country).
If you are able to source a lender, the cost of funds can be significantly higher, offsetting any savings of buying this more remote property. When it comes to financing property in the outer islands of The Bahamas, Cayman Islands or Turks and Caicos, our options are very limited. We recommend self financing through home equity, or stick to the larger, more populated islands.
Talk to us today about all your mortgage options in the Caribbean today!
