How to Make Money from Income-Generating Investment Property in the Caribbean
The Caribbean has become synonymous with a relaxed pace of life and quiet days on the beach. For some buyers purchasing property in the region, it’s this lifestyle that is the main purchasing driver. However, for others, the decision to invest in Caribbean real estate is not purely based on sun, sand and serenity, but on the potential for profit that the investment offers as well.
Caribbean property can yield very attractive returns as an investment vehicle. Many condo hotels and resort developments in the region operate rental programs which offers buyers the opportunity to generate income from their property when not in personal use. This has become a commonly offered feature across the region. These condo developments, hotels and resorts offer property owners a return on their investment typically calculated as a share of the rental income generated by the resort as a whole. At the time of purchasing, the level of returns are often estimated based on projected levels of occupancy.
However, a small number of resorts don’t just offer estimated levels of returns. They offer a guaranteed ROI. In these cases owners typically enjoy personal use of their property for a defined period and are required to place their property into a rental pool managed by the resort operator for the remainder of the year. These kinds of arrangements offer buyers the opportunity to own an investment property in the Caribbean and enjoy the lifestyle the region is famous for.
If you are looking for property for sale in the Caribbean that offers you the opportunity to spend some time in the Caribbean each year and also generates a steady stream of income, here are some of the best Caribbean investment property options offering guaranteed returns.
1. Investment Property in the Dominican Republic
Punta Cana, located on the south-eastern coast of the island, is the most popular tourist destination in the Dominican Republic. The area features several hotels, resorts and villa communities. The airport – Punta Cana International Airport – welcomes 66% of all international arrivals to the country.
One beachfront condo hotel, which is currently in the final stages of construction and close to completion, offers investors highly attractive guaranteed rental returns.
The beachfront community includes 2 bedroom condos and 3 bedroom condos, both of which benefit from the ROI guarantee.
These condos have proved to be a very popular. Over two thirds of the units have already been sold and there are now only 30 units remaining out of a total of 108.
Dominican Republic Investment Property
(i) How much do I need to invest to buy an income-generating rental property in the Dominican Republic?
The 2 bedroom condos are priced from $235,873 USD and the 3 bedroom condos are priced from $326,000.
All units are provided fully furnished and equipped with household appliances.
(ii) Income – What level of returns should I expect to get?
Owners can enjoy use of their property for 4 weeks per year – 2 weeks during high season and 2 weeks during low season. For the remainder of the year the condos must be placed into a rental program managed by the operator and buyers will receive returns calculated as a percentage of the purchase price.
Buyers of 3 bedroom units are guaranteed an annual return of 7%.
Buyers of 2 bedroom units are guaranteed an annual return of 6%.
Annual returns are paid to owners on a quarterly basis.
The operator also offers a range of benefits as part of the package, including payment of monthly maintenance fee, cleaning fees, repairs and maintenance costs, electricity, cable TV service and insurance policy contract covering third party liability and replacement value of furniture, equipment and household appliances.
(iii) Why should I invest in Dominican Republic real estate now?
- The most popular tourism destination in the Caribbean which attracts more visitors than any other location in the region.
- Tourism sector achieving steady, sustainable growth – Visitor arrivals grew by 6.5% in the first half of 2016 compared to the same period in 2015.
- Rapidly growing economy which expanded by 7% in 2015.
- Projected to remain one of the fastest growing economies in the entire Latin America and Caribbean region.
- Largest recipient of Foreign Direct Investment (FDI) in the Caribbean region in 2015, according to ECLAC (Economic Commission for Latin America and the Caribbean).
- Sovereign rating upgraded to “positive” by credit ratings agency Moody’s which considers the Dominican Republic to have a “robust growth outlook.”
Dominican Republic Tourist Arrivals
2. Investment Property in Mexico
These condos for sale in Playa del Carmen on the eastern Caribbean coast of Mexico also offer investors a guaranteed ROI.
The condos are located in a beachfront community offering a range of 5-star resort amenities, including spa, tennis courts, fitness center, shopping, restaurants and pool overlooking the beach.
There are only 2 units with guaranteed returns remaining.
Mexico Investment Property
(i) How much do I need to invest to buy an income-generating rental property in Mexico?
Offered fully furnished and equipped, these 1,026 sq ft units enjoy a premium pool view and are offered at a special rate of $359,000 USD.
(ii) Income – What level of returns should I expect to get?
Investors in these condos are offered a 5% net ROI after expenses by the operator.
The returns are guaranteed by the operator for 5 years.
(iii) Why should I invest in Mexico real estate now?
- One of the world’s top 10 largest global tourism destinations.
- An all-time record number of 32.6 million tourist arrivals in 2015.
- International tourist arrivals to Mexico continuing to grow, increasing by 9.1% during the first 5 months of 2016.
- Stable political environment.
- Diversified economy achieving steady growth – Bank of Mexico forecasts economic growth of 2-3 % in 2016; IMF forecasts economic growth of 2.4% in 2016.
World Tourism Barometer
3. Investment Property in St Kitts
A sustainable luxury resort in St Kitts with 2 luxury hotels, spa, 18-hole championship golf course, tennis facilities, heliport and farm-to-table restaurants supplied by the resort’s own organic farm also offers a rental program with guaranteed returns.
St Kitts investment property
(i) How much do I need to invest to buy an income-generating rental property in St Kitts?
The resort offers a selection of cottage suites and villas for sale. Both whole ownership and fractional ownership opportunities are available, all of which are approved for the St Kitts & Nevis Citizenship by Investment Program, which means that investors in this resort are also eligible to apply for citizenship of St Kitts & Nevis.
Properties are priced from $405,000 USD for a 1/10 fractional interest in a 4 bedroom villa to $3,600,000 USD for a 4 bedroom luxury home.
(ii) Income – What level of returns should I expect to get?
Buyers can choose to keep their property for their own personal use, but for those buyers primarily purchasing a property as an investment, the resort operates a rental program.
In this case the property will be placed into a rental pool and used as accommodation for the hotel. Rental revenue will be split 50/50 between the owner and the hotel operator.
Ownership costs are deducted from the rental return, with a minimum 2% return guaranteed by the operator – there is no upper limit to rental revenue return.
(iii) Why should I invest in St Kitts real estate now?
- Citizenship by Investment Program driving investment into tourism and real estate development.
- Tourism growth expected to be sustained by additional airlift to St Kitts announced by airlines including Delta and United.
- One of the fastest-growing economies in the entire Latin America and Caribbean region.
- GDP forecast to grow by 5.1% in 2016 according to ECLAC (Economic Commission for Latin America and the Caribbean).
- Second largest recipient of Foreign Direct Investment (FDI) as a proportion of GDP in the Caribbean region in 2015, according to ECLAC (Economic Commission for Latin America and the Caribbean).
St Kitts & Nevis Stay-Over Visitor Arrivals
St Kitts & Nevis GDP Growth
4. Investment Property in Antigua
A brand new beachfront resort located on the north-western coast of Antigua also offers investors returns, including a proportion which is guaranteed by the operator.
The villas will be placed into a professionally managed rental pool with profit from rental income split between the owners and the management company.
The villas in this development also offer an extra advantage. Similar to the above community in St Kitts, this resort is approved for Antigua’s Citizenship by Investment Program, which means that buyers are eligible to apply for citizenship of Antigua & Barbuda through an investment in this community.
Antigua Investment Property
(i) How much do I need to invest to buy an income-generating rental property in Antigua?
These 4 bedroom properties in Antigua have an asking price of $550,000 USD.
Buyers can either purchase an additional furniture and pool package or add their own personal touch to the villas.
(ii) Income – What level of returns should I expect to get?
The returns offered by the operator to investors include a proportion which is guaranteed and a proportion which varies according to level of occupancy and nightly rates.
The guaranteed returns offered by the operator increase with every year of ownership from 1.5% in year 1 to 5.5% in year 10.
Antigua Investment Property – Guaranteed Returns
With the addition of the variable returns, the operator projects total expected returns of up to 11.2% which is estimated by the operator to amount to up to $61,662.50 USD per year.
Antigua Investment Property – Total Expected Returns
(iii) Why should I invest in Antigua real estate now?
- Very well established villa rental-based tourism destination which attracts approximately a quarter of a million visitors each year.
- Increased airlift and new airport terminal opened in 2015, cementing Antigua’s position as a regional transport hub.
- Citizenship by Investment Program stimulating the development of new real estate projects and resorts including a $250 million luxury resort on Barbuda to be developed by Robert de Niro.
- Over $1 billion (USD) of tourism related projects in the pipeline in Antigua.
- Third largest recipient of Foreign Direct Investment (FDI) as a proportion of GDP in the Caribbean region in 2015 following a 66% increase in FDI inflows in 2014, according to ECLAC (Economic Commission for Latin America and the Caribbean).
Antigua & Barbuda Stay-Over Visitor Arrivals
How to buy income-generating assets in the Caribbean?
As specialists in luxury real estate for sale from across the Caribbean and Central America, these properties represent just a sample of the income-generating real estate investment opportunities we list.
To discover more about how to invest in income-producing assets in the Caribbean, please contact us.