Top 10 Mistakes To Avoid When Purchasing A Property In The Caribbean.
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Introduction
Is owning a piece of paradise your dream? Many people do, but only a small fraction of them succeed in finding their dream home. Purchasing a home in the Caribbean is not like purchasing a home in the United States. Always work with a reputable real estate agent in your area. For several years, I’ve worked in the Caribbean real estate market. So take a seat and learn from my experiences throughout the years
Mistake No. 1: Trusting The “professional”
The phrase “fake it until you make it” is thought to have originated in the Caribbean. Many of the islands attract fortune seekers from throughout the world who are looking to make up for their unhappy lives back home. You may start again and be successful in the Caribbean. In real estate, there is a lot of money to be made. As a result, a slew of new agents appear out of nowhere. I’ve personally witnessed a lot of folks enter and exit the real estate industry. The majority of unskilled agents fail, and just a handful succeed by pressuring a customer into making a (often wrong) purchase.
My recommendation is to conduct a background check before working with any real estate agent. Even if they work for a well-known franchise. As a buyer, a good agent would do the same. So put in that effort.
Mistake No 2: Trusting Online Photographs And Descriptions
You’ve discovered the home of your dreams! A stunning large villa near the coast with a breathtaking view at an unbelievable price. It could just be a nice rendering to make you feel there is a house, roads, and utilities already in place. Alternatively, a photograph may depict a lovely beach with a stunning ocean vista. Often, this is only the nearest beach, with no guarantee of an ocean view. All of the sellers are attempting to sell you a fantasy that could quickly turn into your worst nightmare. I’ve personally witnessed desperate real estate brokers lying in order to close a deal.
My recommendation is to go visit the property for yourself. Make this happen in person! Never buy just on the basis of photographs. If possible, hire an independent third-party professional to conduct a thorough investigation of the property. Many agents are under no obligation to inform you of the true reason why the seller is trying to sell their ideal home. Check it out for yourself.
Mistake No 3: Ignoring Severe Weather Conditions
I’m from the Netherlands, where it’s usually quite cold. I chose the Caribbean because of the year-round sunshine. That is not correct. Rainfall is abundant on several islands. A beautiful green island equals a lot of rain. Cactuses and dry plains = almost no rain. When purchasing a property, it is easy to overlook the fact that the weather has a significant impact. In Curacao and the British Virgin Islands, I resided and sold real estate. Curacao is relatively dry, however rain can be heavy. Rain showers are common in the British Virgin Islands.
Here are some pointers to consider before buying a home in the Caribbean:
It can get quite heated. The only way to stay cool is to go to the pool or stay in an air-conditioned room. If you want to enjoy the outdoors without having to go swimming every time you become hot, select a property with a refreshing breeze. Look up the most common wind direction.
Make sure your home is flood-proof. It can easily become a flood if it rains or there is a hurricane danger.
Rain, sun, and wind have a significant impact on your property. Salt in the air is considerably more damaging if you live near the sea. You will discover that stainless steel rusts. As a result, when building, utilise long-lasting materials. Keep in mind that living near the water will considerably raise your upkeep expenditures.
Hurricanes may be devastating in the Caribbean. Make that the structure is hurricane-proof. During the last major hurricane, most residents of St. John, USVI, had to rebuild their roofs. Prepare for hurricanes even if an island is “outside” the hurricane belt. Never say never. Having a backup generator is also not a luxury.
In the Caribbean, I’ve seen a lot of houses built in many pods. Which I find ridiculous. It might be fun for a trip, but it’s not a good idea to live there. If it rains or you get caught in a hurricane, you don’t want to go from the kitchen to our bedroom in the rain.
Mistake No 4: Assuming That All Caribbean Islands Are The Same
The one thing that all Caribbean islands have in common is that they are all surrounded by a beautiful ocean and have pleasant temperatures. The Caribbean islands are distinct and each has its own personality. Do your homework. Your two-week vacation may make you feel like you’re in paradise, but it’s not long enough to teach you everything you need to know. Consider going beyond the postcard experience. What are your specifications? Do you want to spend your retirement in paradise? Then you should see if there is enough medical assistance. Do you want to live on a party island or live remotely and enjoy the peace and quiet? Find out how far the infrastructure has progressed (roads, water. electricity, phone, and the internet).
My recommendation is to conduct your research before investing in your vision of paradise, and perhaps start by renting a home to buy you some time.
Extra tip: Spend some time on the island (several vacations) and stay in various spots. Find out which part of the island is ideal for you.
Mistake No 5: Making Plans To Flip Houses
It was such a good deal, according to your Caribbean real estate agent. You got on it right away, hoping to make some quick cash. Please reconsider! You would not have listened to the fortune hunter posing as a real estate agent if you had read this essay. Because the Caribbean real estate market is typically slow, it may take longer to sell. It’s not always about lowering the price; sometimes there aren’t enough serious purchasers. To make matters worse, your real estate agent omitted to tell that the government was planned to build an airstrip directly next door. That was the explanation for the extremely low pricing. Selling your dream home has turned into a nightmare.
In general, when purchasing a Caribbean home, do so because you want to spend quality time with family and friends. All of those fantastic, priceless experiences are the return on investment.
If you want to generate money in the Caribbean, my recommendation is to find the ideal spot. The waterfront is usually a nice option, or pick an up-and-coming tourist district. Because the islands are small, great places are hard to come by. If there is a scarcity, the cost will rise. Then construct a home that meets not only your needs but also those of ‘everyone.’ Choose neutral tile colours, a functional kitchen, and a stylish, modern bathroom. Make your house as ideal for vacation rentals as possible. So, if selling your home is taking too long, consider renting it out as a vacation rental. Make sure that all of the bedrooms are the same size and that there are multiple bathrooms.
Mistake No 6: Assuming That Constructing A New Home Is Less Expensive
This is a mistake I made myself. I constructed my own house. I have the following advantages over you: 1. I worked and resided on the island. 2. I was well-versed in the construction process and knew the contractor. 3. I could negotiate a decent building price and write my own construction contract.
I believed I knew what I was doing, but every day I had to deal with problems! It was a shitload of work for me to keep the builders on schedule and building the house according to the blueprint.
It will take more time (and money) than you anticipated, and controlling the development will be difficult. Materials aren’t always readily available, which can throw you off for weeks. Because the majority of the materials must be imported, they can be rather costly. Rain delays, building businesses going bankrupt, and budgets that were anticipated too low can all cause construction expenses to skyrocket.
My suggestion is to avoid building yourself simply because it is less expensive. Finding an intriguing property for sale that is perfectly to your taste and in the appropriate location might be difficult. You may not have a choice in some circumstances. Take on the burden and participate in the construction process. Also, hire a competent project manager.
Mistake No 7: Underestimating The Length Of The Purchasing Process
Hmm. Even while islanders are laid-back, Caribbean governments can make purchasing a home difficult for tourists and even natives. Buying your dream house can be a long and drawn-out process due to government bureaucracy and cultural differences.
If you require a mortgage, each island has its own set of rules and regulations. Consult a local lender for information on mortgage rates and the length of the process.
My advise is to take your time, be patient, and stay in touch with your real estate agent to ensure that everything goes smoothly.
Mistake No 8: Ignoring The Importance Of Routine Maintenance
Owning a home in paradise while wearing no shirt and enjoying a margarita. Life can be so lovely. I don’t want to discourage you, but there’s more to it than that. Maintaining your home is a lot of labour. Especially for those looking to purchase a vacation house. When something breaks or your roof leaks, you may spend your entire visit fixing the problem or dealing with the people who are fixing it. Because everyone on the island works on island time. It can be fixed if and only if the materials are on the island.
My recommendation is to hire a reputable property manager who can handle all of these issues and keep you informed while you are away. You will have a better time on vacation this way.
Mistake No 9: Trusting Your Agent To Price A Home Correctly
In the Caribbean, checking accurate market comparisons (what sold in the neighbourhood and for how much?) is difficult. Overpriced properties are frequently sold by sellers and real estate agents. Make online comparisons with other listings to get a sense of the area’s average pricing. Always double-check the local currency. You may be compelled to pay in the local currency, so be mindful of the exchange rates.
Make sure you use a skilled realtor who will not advertise any expensive properties.
Mistake No 10: Spending More Money Than You Can Afford
If the realtor shows you three homes, you should: House #1. is within your budget but needs some work. House #2 is within budget, but not quite. House #3 is spectacular, but it is out of your price range. Which one will you pick? The realtor is aware of this. Normally, number three.
Don’t be fooled into adjusting your budget in order to purchase the ultimate villa of your dreams. The whole point of setting a budget is to ensure that you can cover all of your expenditures long after you’ve made your purchase. Typically, you’ll need to put down a 20% downpayment and then borrow the balance based on your income.
When buying a home in the Caribbean, I’ve seen several buyers make this error. Even more so with land buyers who are constructing their dream homes. They went above and above to ensure that everything was perfect. They are unable to manage their spending when it comes to maintaining the property or paying taxes once it has been appraised for a different value than originally predicted. And the house is no longer a fantasy, but rather a burden.
Even if you see your home as a potential source of income from vacation rentals, don’t expect that money to help you pay for it. Keep in mind that you don’t have to buy the ultimate beach house with a pool and spa straight away when buying a home in the Caribbean. It’s fine to begin small.
My recommendation is to verify your budget before you start looking. Before contacting a real estate agent, make sure you are informed of all additional fees like as taxes and construction costs. Tell the realtor a little lower figure so you’ll have some wiggle space if the realtor finds a perfect house that’s just out of your price range.
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
