For most buyers in the Caribbean, having their home sit vacant while not in use is either not a financial option or an asset not well used. Renting out your property can cover your carrying costs and in many cases put a little extra money into your pocket every month. Deciding on how involved you want to be, will dictate the type of property that is right for you.
Caribbean Resort Properties
The easiest home to own in the Caribbean is a resort property. These hotel or condo-hotel units are cared for and managed full time by the hotel property. They will fill your unit, fix and care for you unit as well as manage the whole common property. At the end of every month you will receive a statement showing your income after expenses (assuming you chose wisely).
It doesn’t get any easier than this, however what about the cost of managing your condo? Well, if there is a downside, it is the portion of rents you have to hand over to the management company, usually around 50%. This may sound like a lot, however keep in mind that they are also the ones keeping it occupied all year, not an easy thing to do.
Overall, these properties produce a reasonable return on your investment, with little to no work on your part.
Short Term Rental Properties
Buying a property to rent out short term will likely your most profitable way to invest in Caribbean real estate. In the right locations, through sites like Homeaway and Airbnb, your property can rent most of the year with very little marketing costs. You will still need someone on the ground to manage your property, however at a much smaller percentage than you would pay at a hotel.
This type of ownership is a much more hands on approach to the previous model. You will have to handle emails and customer inquiries, however you will be paid handsomely on the right property. Keep in mind however that you must inquire into the condo complex or resort before you buy, as more and more places are restricting this type of rental, especially if they offer a management option internally.
In summary, this is your highest return option, with the most hands on effort on your part.
Long Term Rental Properties in the Caribbean
On many Caribbean islands, this is the one type of rental property that seems to get neglected. As tourists increase, so does the potential for income via sites like those mentioned above. This means many properties that were or could be ideal long term rental properties are switching to short term. This has left a void in many locations, driving up the cost of living for those residents of the island.
The good news for people considering buying an investment property in these locations however, is a very good return on your investment. Long term rentals are generally low maintenance, with no need for expensive property managers.
Long term rentals will provide you with a predictable return on your investment, with very little hands on effort.
If you are looking to buy a rental or investment property in the Caribbean, contact us today for all your financing needs!
