Seven Issues When Buying Property in the Caribbean

1 Choosing the wrong location
Some people pick the wrong island in the Caribbean, or even the wrong location on their island of choice. You must do your research to find out if your location has all the facilities and sporting activities that you want. You must also consider current prices, rental potential and future prospects for capital growth. Property purchasers should choose a politically stable country with potential for good capital appreciation and good rental returns.

2 Choosing the wrong sector of the property market
Do not buy an apartment if prices are falling, or buy a property at the luxury end of the market if nobody can then afford to rent it. Examine the historical price trends of properties on the Caribbean island you chose to find out what capital appreciation has occurred in the past.

3 Failure to consider your tax liability in your home country
Some people do not research their tax liability in their home country when purchasing a property in the Caribbean.
· What is the income tax liability on rental profits (revenue less allowable costs)?
· What are the rules on capital gains achieved when selling the property?
· Are there tax treaties between your home country and your choice of Caribbean country to ensure that you do not get taxed twice on the sale of a property?

4 Failure to secure adequate title
Title to land or property is defined differently in various countries in the Caribbean. Again you must do your research and employ reputable lawyers that understand the local land and property laws. It is always best to get local representation.

5 Failure to take exchange rates into account
Exchange rates can significantly influence both the revenue you achieve and the costs you incur (mortgage, management fees, maintenance costs, etc) from your property in the Caribbean. Property purchasers can have their profits reduced or increased by currency fluctuations that occur over time. It is important to decide in which currency you will take out and repay the mortgage because adverse currency fluctuations will lead to an increase in mortgage payments.

6 Failure to research an exit strategy
There must be an active resale market in the location you chose to buy. Otherwise you might have difficulty in selling your property in the Caribbean.

7 Failure to get personally involved
Some people do not visit the various Caribbean locations that interest them before they buy their property and are later unhappy with their choice.

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