Buying Property in the Caribbean as an Investment - Oil Nut Bay

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					60 | REAL REPORT                                                                                                                                                                                                                                                  REAL REPORT | 61




       Buying Property in the Caribbean as                                                                                                  Economic: Most property transactions        investors purchasing land do follow          period heralded the growth of many
                                                                                                                                            are conducted in US Dollars, however        through with development.                    resort residential developments, some

       AN INVESTMENT                                                                                                                        individual islands with their own
                                                                                                                                            currencies may require investors to
                                                                                                                                            conform to exchange controls. The
                                                                                                                                                                                           All investors should thoroughly
                                                                                                                                                                                        research title prior to acquisition.
                                                                                                                                                                                        Normally, a local attorney will be able to
                                                                                                                                                                                                                                     of which have been extremely
                                                                                                                                                                                                                                     successful, while others have ground to
                                                                                                                                                                                                                                     a halt, a problem not exclusive to the
       There are many reasons to buy property in the Caribbean – great weather, pristine beaches, exotic                                    regional currencies, such as the EC         carry out a title search and companies       Caribbean. For the most part, prices
                                                                                                                                            Dollar (East Caribbean), Cayman             like Stewart Title are established in the    have remained relatively stable
       cultures- but when purchasing property as an investment the factors become altogether different.                                     Islands Dollar and Barbados Dollar,         Caribbean and can offer title insurance.     throughout the region. This is
       Edward Childs, of Smiths Gore Realty, identifies some of the factors investors should consider before                                have fixed exchange rates with the US       Renting Property: There is a healthy         generally due to the fact that many
       taking the plunge.                                                                                                                   Dollar. The French and Dutch islands        rental market in the Caribbean, which        homeowners in the Caribbean region
                                                                                                                                            operate as part of the Euro Zone, while     has grown significantly since 2000.          can hold their properties in times of
       THE REASONS FOR BUYING                                                                            Weather: Yes, the Caribbean        the Turks and Caicos Islands (TCI) and      Depending on the type of property            economic downturn, which restricts the
       One of the first questions a                                                                      weather is all its cracked up      British Virgin Islands have both adopted    investment, owners will either be            number of properties in foreclosure.
       purchaser needs to ask is what they                                                               to be. For tourists, the year      the US Dollar as their currency.            responsible for renting their property       That said, there is no doubt that it is
       wish to achieve when buying a                                                                     is divided into two seasons,           Many of the Caribbean islands have      themselves, normally through an              currently a buyers’ market with
       property overseas. A purchaser                                                                    high (mid-December                 considerable tax advantages for             independent agent, or through a rental       investors able to make offers against
       looking for a second home, where                                                                  through mid-April) and low         investors with no estate taxes, capital     programme established by the                 asking prices that previously would not
       holiday rentals may be required to                                                                (mid-April through mid-            gains taxes and, in certain                 developer. When renting independently,       have been considered.
       subsidise the annual running costs,                                                               December) with the weather         circumstances, no personal or               the owner should be aware of the fee            The traditional property investment
       will likely purchase a very different                                                             generally pleasant                 corporate taxation. Offshore                and commissions involved which can           in the Caribbean was of a house on a
       house from a purchaser seeking to                                                                 throughout. The summer             companies can be used to acquire            quickly erode rental income if relying       covenanted residential estate or a parcel
       move abroad permanently.                                                                          months can be humid and            property, which can provide further         on third parties to manage villa             of land for custom development. This
       Likewise, some houses may suit the                                                                the hurricane season, which        benefits to the beneficial owner. Prior     preparation and guest bookings.              type of investment, where the
       rental market but may not be                                                                      runs from June to                  to embarking on the acquisition of          Establishing a good rental track record      homeowner is essentially responsible
       practical as a permanent home. Set                                                                November, can produce hot,         property in the Caribbean, investors        and direct repeat bookings will go a         for the management and rental of their
       out some practical criteria for the                                                               sultry weather interspersed        should first seek professional advice on    long way to turning this into a more         property, has been the foundation of
       type of house you are seeking to                                                                  with more vigorous weather         tax matters, particularly when moving       profitable exercise.                         property development regionally. Our
       save both yourself and the agent                                                                  patterns. Hurricane                permanently abroad.                                                                      general advice is that an investor
       considerable time.                                                                                preparedness of homes,             Acquiring Property: Investors should        RESEARCHING THE MARKET                       acquiring this type of property should
                                                                                                         including the installation of      carefully research the regulations             As with any acquisition, groundwork       consider this a long-term capital play
       THE CARIBBEAN                              considered a favourable feature by         hurricane shutters and a stand by              regarding the acquisition of property in    will pay dividends.                          with any rental proceeds, at best,
       The Caribbean is big. It extends in a      purchasers seeking a quieter life.         generator, can be an essential part of         each target island. Some islands, such      Resources: Most islands have a wealth        covering the running costs of the
       broad arc of more than 4,000 km and        Health: In many of the smaller islands     Caribbean living.                              as the TCI, Cayman and Barbados, have       of information available normally            property. It is unlikely that there will be
       contains many cultural influences,         in the Caribbean, health services are                                                     relatively open markets, while many         from the local tourist board, Chamber        sufficient income from renting a villa to
       mostly historic, that have effected        under-funded and facilities may not        FACTORS INFLUENCING                            other islands require investors to apply    of Commerce or Government                    cover a mortgage.
       development on each island. European       meet international standards.              INVESTMENT                                     for a landholding licence. Generally, the   investment agency.                              Investment into resort residential
       countries have played a major role in      However, the more developed islands,       While there will be many factors               licence application is a straightforward    Real Estate Agents: Locating a               developments needs to be carefully
       shaping the region, but nowadays,          such as Barbados, The Bahamas, The         influencing an individual’s purchasing         document, requiring police records,         competent and responsive real estate         researched. The developer’s track
       tourism and real estate attract visitors   Cayman Islands and Puerto Rico,            preferences, the following are some of         personal and financial references,          agent can be a frustrating experience. If    record, amount of project financing
       and investors to a world where sitting     generally have perfectly adequate          the major factors that will determine          although the processing time will vary      uncertain about who to choose, a local       and number of committed sales are
       under a palm tree with rum in hand is      facilities. In smaller islands a good      investment choices in the Caribbean.           from island to island. Some islands         bank will usually only recommend the         all pointers to whether a development




                                                                                                                                                                                                                                     programme whereby they receive >
       considered the norm. Their legacy is a     health insurance policy, including air     Political and Social: Political stability is   have introduced Economic Citizenship        more reliable agents.                        could be successful. However, the
       diversity, which changes from island to    ambulance coverage, will probably be       one of the most important aspects              programmes, which allow investors           Lawyers: A good lawyer will be               investor must be prepared to accept
       island. Some of the considerations         sufficient protection for most.            influencing the investor’s decision-           meeting certain (normally monetary)         necessary to advise on local laws            a different (higher) level of risk
       investors should investigate are           Language and Culture: Each island in       making process. Fortunately, the               criteria, to be exempt from some taxes      relating to the acquisition of property,     when acquiring either a lot for
       discussed below:                           the Caribbean has a distinctive culture    Caribbean in general is considered             when purchasing property. Closing           the preparation of a sale contract and       development or completed residence
       Access: This is perhaps the most           which will set it apart from all others.   stable with most islands adopting              costs also vary between islands and the     transfer of clear title.                     within such a property.
       important factor determining where         However, investors will probably           parliamentary democracies. Most                extent of closing costs should be fully     Engineers: A competent structural               A resort development will generally
       investors end up. Most of the larger       distinguish between the various mother     islands embrace external investment            understood prior to purchase. On some       engineer will advise on the structural       offer a structured management and
       islands are easily accessed by direct      tongues that divide the islands in the     and investors will quickly determine           islands the vendor or purchaser is          condition of a property prior to             rental programme. Due to American
       flights from North America and Europe      region. English, Spanish, Dutch and        which islands have favourable policies         responsible for closing taxes while         purchase. In a location that is prone to     SEC (Securities and Exchange
       while most smaller islands, such as the    French islands all offer something         towards investment.                            others levy taxes on both parties.          hurricanes or earthquakes, this survey       Commission) rules, a developer selling
       British Virgin Islands, Anguilla, St       different and will appeal in different        Another determining factor is the              Investors acquiring land may be          could well be essential.                     to Americans cannot give detailed
       Barts, Nevis, Bequia and the               ways to investors.                         standard of living found in each island.       required to enter into a development                                                     information on projected returns an
       Grenadines, require an additional             The mix of influences has created a     Local standards of living will determine       commitment with the Government,             PURCHASING FOR INVESTMENT                    investor can expect, with information
       island hop on smaller regional             fascinating fusion where no one island     costs including construction and labour        which requires the investor to invest a        Like the major North American and         generally limited to rack rates on
       airplanes. The relative remoteness of      has a dominant culture and the choice      expenses, which will make building in          minimum amount within an agreed             European economies, the Caribbean            rentals and historic occupancy rates.
       these smaller islands has protected        from one island to another can only be     some islands considerably more                 timeframe. These commitments are            enjoyed unprecedented growth in real         Purchasers are now offered a rental
       them from mass tourism and is              based upon personal preference.            expensive than others.                         not draconian but ensure that               estate values from 2002 to 2007. This



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62 | REAL REPORT



       income only generated by their unit. Rental pools are no                        THE RITZ-CARLTON, GRAND CAYMAN
       longer permitted, although some developers may still                            LUXURY RENTAL PROGRAMME
       operate them. Investors into established resort
       developments can generally take comfort in a visible track
       record. Investors buying off-plan can be attracted to
       founder’s programmes offering reductions off the list price,
       however investors should be aware of the increased risks
       associated with front-end investment. Some developers have
       encouraged investment with guaranteed rental returns.
       While attractive in the boom times, this type of guarantee
       can seldom be met when the market turns.                                        The Ritz-Carlton in Grand Cayman provides a monthly Rental
                                                                                       Program to owners whereby guests can experience life as an owner,
          Visiting the islands is an essential part of the decision-                   albeit one with access to all the elite amenities on offer at one of the
       making process, as weighing the bustle of some islands                          world’s most exclusive and luxurious resorts. Opportunities to rent
       against the solitude found on others can only be done once                      are available at:
       experienced first-hand.                                                         The Deckhouses at Dragon Bay
          Whether buying a villa or developing your dream home,                        • 7000 square foot waterside villas consisting of five-bedrooms, four
       the Caribbean can offer a wonderful living experience                           and a half baths, private manmade beach, boathouse, infinity-edge
                                                                                       swimming pool and detached guest cottage
       enhanced by a region that is politically stable. The well-
       established real estate agents and lawyers on each island                       The Residences at The Ritz-Carlton
                                                                                       • Distinctive one, two and three-bedroom luxury condominiums
       will be able to provide professional advice which will guide                    situated within private oceanfront towers which occupy the widest
       you through the purchasing process, but the decision of                         stretch of world renowned Seven Mile Beach
       which island to invest in will remain a personal choice.
                                                                                       Those availing themselves of the rental program enjoy full access to
       While returns on investment and increases in value can be                       the unmatched amenities and services on offer such as Greg
       important considerations, in the Caribbean being happy                          Norman’s Blue Tip Golf Course, Nick Bollettieri’s Tennis Club, as well
       with your new island home is paramount.                                         a private residences entrance, including: private elevator, concierge,
                                                                                       bellman and 24-hour security team. A dedicated pre-arrival
                                                                                       concierge assists with transportation, dining and activity
                                                                                       arrangements in advance of one’s arrival.
      [   Further resources can be found at:
                                               [
          www.reallifecaribbean.com                                                    For more information contact Tracey Kline, Director of Resale
                                                                                       and Rental Operations (345) 326 1278
                                                                                       or visit www.residencesrentals-cayman.com

       CAYMAN VILLAS, CAYMAN ISLANDS                                                   OIL NUT BAY, BRITISH VIRGIN ISLANDS
       PRIVATE CONDO AND VILLA VACATION RENTALS                                        EXCLUSIVE RENTAL PROGRAMME




       Established in 1970, Cayman Villas has been in the vacation rental              An elite, luxury residential resort community on the island of Virgin
       business for 40 years, making them the most experienced,                        Gorda, Oil Nut Bay is leading the way in eco-progressive living
       knowledgeable and professional vacation rental agency available in              and lavish rentals. Accessible only by helicopter or boat,
       The Cayman Islands. Representing over 100 privately owned, one to               homeowners can choose to participate in the Rental Program,
       seven bedroom beachfront condos and villas island-wide their portfolio          while visitors have the opportunity to rent either beachfront villas
       ranges from modest to deluxe, traditional to modern, comfortable to             or secluded private estates.
       lavish. Each property is fully equipped and managed independently to
       ensure that the maximum rental potential is achieved for the owners             Villa & Estates:
       and that guests experience the perfect vacation.                                Bringing together distinctive architecture that is in harmony with the
                                                                                       unparalleled natural beauty of the lush surroundings, Oil Nut Bay is
       Owner benefits:                                                                 only available to 88 families in order to maintain the pristine 300-
       • Cayman Villas assists with preparing the property for government              acres it occupies on the eastern tip of the private island.
       inspections, advising and liaising with property management,
       advertising the rental, managing all reservations, assisting guests             Each unique, custom-designed home offers tastefully designed
       before and during their vacation and managing payments and monthly              interiors, a private pool, seclusion and majestic views of the ocean
       statements for owners – meaning owners can simply enjoy the rental              and neighbouring islands.
       income they receive.
                                                                                       Amenities:
       Guest benefits:
                                                                                       The spectacular amenities available to guests and owners include:
       • Receiving personal attention before and during their vacation, guests
                                                                                       a marine nature centre, kids club, full-service spa and wellness
       are greeted upon arrival and assisted with the arrangement of services
                                                                                       centre, beach club and marina, amongst other services such as a
       such as: private chef, maid services, baby equipment rental and
                                                                                       24-hour concierge, housekeeping and docking privileges.
       services, island activities and excursions, grocery shopping, car/boat
       rentals, wedding/event services and any other special requirements –
       allowing guests to feel at home while enjoying the ease and luxury of
       additional personal services.
       For more information contact Penny, Sherry or Juliet at (800) 235 5888,         For more information call (284) 495 5400 or 800 761 0377,
       (345) 945 4144 or email reservations@caymanvillas.com or www.caymanvillas.com   email info@oilnutbay.com or visit www.oilnutbay.com




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