Refining Your Property Search
Are you dreaming of a property in the Caribbean, or already booked on a plane to go hunting for the perfect property? Then read on, as this article may help you refine your search by eliminating islands that could be too expensive for your budget and save you from searching for properties that may only exist in your dreams.
Caribbean Property Market Prices
Many people believe that the Caribbean has an abundant selection of cheap properties, simply because for many years people from the Caribbean have emigrated to the richer more developed countries of the North seeking employment.
This thinking may have been correct 40 years ago, but for the last 30 years the Caribbean has been steadily growing as a destination of choice for affluent American’s and Europeans. This has resulted in house prices in most of the Caribbean countries that have a well developed tourist economy, being higher than average cost of a house in the USA, and often higher than the average house price in the UK, which in October 2006 was ₤169,413 or approximately US$320,190 at Octobers exchange rates.
Which Are the Most Costly Countries?
The developed Caribbean tourist destinations where property prices are highest are : - Antigua, Bahamas, Barbados, British and US Virgin Islands, Cayman Islands, Grenada, Guadeloupe, Martinique, St. Martin and Tobago.
Where are the More Affordable Countries?
The countries offering the most affordable properties are Belize, Dominica, Dominican Republic, Nicaragua and St. Vincent. However, the idea of buying a “cheap” Caribbean property really does not exist anymore as property prices in the more affordable countries are catching up fast.
Cheap Homes?
Many people scanning the Caribbean property websites and magazines will find advertisements for cheap homes, that are being offered at affordable prices. However, it is important to read the small print or ask the real estate agent whether the property being offered has been built for the foreign market, or is something that has been built for the local market, as the two types of property are often very different.
Most houses specifically built for foreign buyers, or the more affluent local buyers, will be well constructed to US or European standards and be located in desirable areas. The average home built to these standards will usually be constructed from reinforced concrete blockwork and reinforced concrete to withstand the worst effects of earthquakes and hurricanes. Additionally, the interior fittings and fixtures will likely be at a high standard and the roof on the highest quality homes, often constructed with tiles, instead of the ubiquitous corrugated metal roofs - which although they are acceptable, can be horrendously noisy when it rains hard, and creak in the daytime whenever the sun goes behind a cloud.
Many properties built for the local market will also be well built, but may have idiosyncratic and often cramped interiors designed to meet the needs of the owner and his extended family! Those built for the budget end of the local market will often have more serious shortcomings with badly fitting doors and windows, poorly designed bathroom and plumbing systems, defective drainage systems and faulty DIY electrical systems.
For example the first “local” house that I rented had no hot water services when my wife and I first arrived. After talking with the landlord, he fitted a strange looking instantaneous hot water heater that sat just above the shower rose, 12″ above our heads, with electrical cables disappearing through the wall and into a 240volt 13amp outlet in the kitchen. Needless to say, I always felt there was a strong element of risk to taking a shower with hot water and therefore got used to taking cold showers. Additionally, the wardrobes and kitchen cabinets throughout the houses were very “home made” affairs, built from scrap plywood, and we lived with the constant noise of hundreds of bats living in the roof space.
The huge difference in quality between the two types of property is clearly reflected in the asking prices, and once this is appreciated it is easy to realise why estate agents sigh loudly when a prospective buyer informs them that they have seen a “similar” home down the road, for only half the cost of the one they are being shown.
Cheap Land?
Beachfront land, and land with stunning views, has always been some of the most desirable land to own. Consequently many of the nicest plots of land were built and developed years before the Caribbean became a destination for foreign buyers, with many of the remaining pieces of prime land having now been bought by resorts, developers and wealthy individuals. Consequently, most beachfront land and land with stunning views has already been sold and what has not been sold is now the attention of numerous buyers, causing the prices of these properties to rise significantly each year. Buyers for this type of land therefore need to lower their expectations and raise their budgets, as the majority of these properties are expensive.
Typically, beachfront land, which in my definition means land that goes all the way to the sea shore and includes a sandy beach, will generally cost upwards from US$200 per square metre with prices of US$400 per square metre and upwards being not at all unusual on the more expensive islands. These costs per square metre relate to a cost of US$200,000 to US$400,000 for a 1/4 acre piece of land, which is the practical minimum of land on which to build a house on beachfront land.
Similarly land with dramatic mountain views, or stunning ocean views, is also likely to be pricey. Whilst it is more difficult to give guidance on the price for these types of property, buyers should expect to pay several times as much for these properties, than they would for land with more modest views, or no real views at all.
Now that we have looked at some of the myths that lead many people into a hopeless search for properties that simply don’t exist - or don’t exist at prices they are willing to pay, we now need to look at how we can refine our search.
The Caribbean comprises more than 30 separate countries. Each of these countries have different legal systems, different laws relating to the foreign ownership of property and even different languages. Before looking for a specific property, it is essential to locate the island that best meets your requirements.
A good starting point is to print off a map of the Caribbean showing all the countries. Maps can be obtained from an image search for “caribbean map” on websites such as Google and Yahoo. These websites are also excellent at allowing you to quickly access data on each island by using their search facilities and the official tourist board and commercial websites for each country will provide a mine of information.
Once you have decided on a country or several possible candidate countries, it is important to review the average price of properties in your selected countries and also the closing costs of buying a property and if there are any special regulations that would effect your ownership or enjoyment of your property. Some of the larger websites such as www.caribbeanlandandproperty.com which covers property in 20 Caribbean countries, provide buying information for each country. It is essential for any prospective buyer to carefully read this information to avoid costly errors, as for example the time necessary to buy a property can vary between a few days and over a year, and the ability for you to rent your home when you are not using it, is not permitted on some islands!
The Final Stages
OK - so you are now comfortable that you have chosen the right country; confident that you can afford a property in that country, and find the property ownership laws of that country acceptable. Great, now you can start your search for a specific property meeting your requirements.
The first place to start this search is by visiting websites that show you many of the available properties in that country. There are three main types of website offering property, the local real estate agents websites, the regional websites that work with real estate agents and the for sale by owner FSOB sites that advertise properties on behalf of private owners and others.
Avoid contacting any these websites and asking for additional information, until you have decided which website you would prefer to work with, as the websites working with the local real estate agents often work on a referral basis and once you have contacted the local real estate agents, the regional website will no longer be able to assist you.
After reviewing the various websites, contact the one that you feel to be the most professional and likely to offer the most help. This can usually be decided by looking at the amount and quality of the information each website provides for their properties and also the amount of detailed buying information given. Remember there is no difference in the cost of buying a property, whether you go through the regional website or directly to the local real estate agents website - however the regional website may be better organised to deal with email enquiries and may have a wider choice of properties by working with several of the local real estate agents. This also offers a bonus in that you may be able to deal with one person throughout your search, rather than having to deal separately with several different and often competing real estate agents.
When contacting the website tell them the budget that you have available for your purchase; the date when you would like to buy (which should be within the next few months, as you shouldn’t be contacting anyone if you are not in a position to view and purchase within this time frame); and as much additional information as possible about the type and size of property you are seeking. This will give you the best results and avoid wasting their valuable time; as whilst you may be dealing with a website, there is someone at the other end who has to answer all your emails and often spend time seeking the additional information you requested. It is also worth noting that as many a one email in 20 get lost, so if you don’t get a reply to your question within a few days, email them again, as they may have not received your first email.
Viewing Property
When you plan to view a property, particularly in a country that you may have never visited before, it is well worthwhile to spend the first few days of your time simply driving around the island and checking that the island really is the right place for you - as no amount of research on websites can replace first hand experience. If you are undecided about the island, give it some more time, as it is pointless viewing properties until you are certain that you like the country.
If you are viewing property for sale by owner you will need to employ the services of a local lawyer to take care of conveyancing the property and check that the title is free of liens. Before making any offer, you may also want to engage a local building surveyor to check that the property is structurally sound and worth the price being requested by the seller.
When it does come to viewing a property with a real estate agent, you will find that most real estate agents are very knowledgeable about the property and the property laws in their country. This does not mean that you should necessarily dispense with the building surveyor and lawyer, but you may be able to reduce some of these costs as most real estate agents will take care of minor legal matters that lawyers are often reluctant to tackle.
Your real estate agent will also help you by suggesting alternative properties you should consider, however please remember that the real estate agents time is extremely limited, particularly if you are looking at properties at the lower end of the market where the commission being paid to the agent is very low.
If you have done your homework carefully, you should by the time you view a property, be confident that you have chosen the right country, that your property is in the right area and otherwise meets your requirements. When you have done all this and the property you are viewing meets your expectations you should be ready to make an offer and proceed to owning your own little piece of the Caribbean.
Copyright December 2006 Stewart Andrews
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