Many visitors to the Caribbean dream of owning a little slice of tropical paradise. Particularly as the region is one of the most sought after destinations for vacation and retirement homes. So if you are considering purchasing a home in the Caribbean for vacation or retirement here are 10 tips to ensure the purchase goes smoothly.
1. Do your research
Your five-day vacation may have felt like a little piece of heaven but that is not enough time to tell you what you need to know. If you’re buying for investment, i.e. you plan to rent the home, be sure that the property is close to amenities and facilities such as shops or the beach. If you’re looking a property for retirement, find out if adequate health and support services are available. Look beyond the postcard experience to find out how developed is the infrastructure (roads, water, electricity, phone and internet). Issues like safety and emergency response should also be taken into account.
2. Secure a lender early
Before you go searching for property you should be aware of how the purchase will be financed. If you intend to secure a mortgage, seek pre-approval from your lender before you go house hunting. Some Caribbean islands require that you have all the funds needs to purchase. Whereas in some location, you can get a mortgage. Getting a mortgage from a Caribbean lender varies only slightly from the institutions in your home country, as you will still need to show documentary evidence of your ability to repay the loan.
3. Hire a real estate agent
Real estate agents working in the Caribbean are usually well versed on the property laws and regulations that vary from island to island. They will be able to help you find the dream property and steer you to the shortcuts to bypass red tape that can frustrate the process. A good real estate agent will have in-depth knowledge of the island, is well connected and able to recommend you to other professionals and services you will need to complete the purchase.
4. Hire an attorney
When you decide on the property you will need to make an offer to purchase. However, the laws surrounding the purchase of property by overseas residents vary in the Caribbean, so it is prudent to have an attorney to help you interpret these laws. When choosing an attorney, try and get a referral from a fellow expat who has gone through the process and currently lives on island.
5. Make sure you are eligible to purchase property
Some countries like St. Lucia require you to be on the island to sign the conveyance documents for purchasing property. In Jamaica, you must have a unique taxpayer registration number issued by the Tax Administration Department before the purchase can proceed. Other islands have mandatory requirements for overseas property buyers.
6. Get a surveyor’s report
In addition to registering your tax obligations, you will need a valuation and survey report. The valuation should provide information about the property to determine its true market value. The survey report will determine the legal boundaries of the property and whether there are any encroachments.
7. Prepare for the true cost of buying
Buying property does not only involve the cost of the land. There are attorney’s fees, real estate commission fees, the cost of valuation and survey, land transfer taxes and other fees that some islands require upfront. For example, some countries ask you to apply for a residency permit or pay a non-national fee before you can purchase land.
8. Be patient!
Cultural differences and government bureaucracy can turn your search for a dream property into a long and drawn out process. It is important that you be patient, keep in constant contact with your attorney and real estate agent to be sure that things are proceeding according to plan
9. Learn about the foreign exchange rate
Exchange rates vary in the Caribbean, and as such you will find many properties priced in US Dollars or British Pounds. You should be aware of the exchange rate as you may be required to pay some fees in local currency. Though this will likely be handled by your attorney, it is wise to keep track of your finances.
10. Protect your new asset
After the purchase of your property is complete, be sure to include it in your existing will. If you do not yet have a will, now is the perfect time to get one.