Top 10 Mistakes When Buying a Home in the Caribbean
Is it your dream to own a piece of paradise? A lot of people do, and only a small percentage of people actually end up in their dream home. Buying a home in the Caribbean differs from what you might be used to. Make sure to always work with a local trustworthy real estate agent. I have been working in real estate in the Caribbean for several years. So sit back and learn from the experiences I had in all those years:
Buying Property in the Caribbean
The most common mistakes when buying a home in the Caribbean:
Trusting the ‘so-called’ professional
Believing the photos and descriptions online
Forgetting about extreme weather conditions
Thinking all the Caribbean islands are the same
Planning on flipping homes
Thinking that building a new home is cheaper
Not realizing how long the buying process takes
Forgetting about continuous maintenance
Believing your agent can properly price a home
Spending more money than you can afford
Mistake #1: Trusting the ‘so-called’ professional
The expression ‘fake it until you make it’ might be invented in the Caribbean. A lot of the islands attract fortune seekers from abroad, trying to make up for their miserable life back home. The Caribbean allows you to start over and be successful. There is a lot of money that can be made in real estate. So a lot of new agents pop up from nowhere. I personally have seen a lot of people coming and going into the real estate sector. Most of the inexperienced agents fail and just a few will make a buck by pushing a buyer into an (often bad) decision.
My advice: Please make sure you do a background check before working with just any real estate agent. Even if they are working for a big franchise name. A professional agent would do the same with you as a buyer. So make that effort.
Mistake #2: Believing the photos and descriptions online
Mistakes when buying a home in the Caribbean
You have found the property of your dreams! A beautiful big villa near the ocean with a gorgeous view and the price is just too good to be true. It might just be a great rendering to let you believe there already is a house, roads, and amenities. Or a picture shows a beautiful beach with a gorgeous ocean view. Often this is just the nearest beach and you do not have the promised ocean view. All the sellers are trying to sell you the dream which can easily be your biggest nightmare. I personally have seen desperate real estate agents lying to get the deal done.
My advice: Make sure to see the property yourself. Do this in person! Never buy off of photos alone. Investigate the property thoroughly, if possible with an independent third-party professional. A lot of the agents do not have any obligation to tell you the real reason why the seller is trying to get rid of their dreamy house. Find out for yourself.
Mistake #3: Forgetting about extreme weather conditions
I am from the Netherlands and most of the time it is pretty cold. I moved to the Caribbean for its year-round sunshine. Ok, so that’s not true. Some islands have a lot of rain. Green lush island = a lot of rain. Dry plains with some cactuses = almost no rain. When buying a home you completely forget that the weather here has a lot of influence. I lived and sold properties in Curacao and the BVI. Curacao is quite dry, but if it rains it can pour. BVI has a lot of rain showers.
A few tips you might want to take into account when buying a home in the Caribbean:
It can be pretty hot. The only way to cool off is to jump in the swimming pool or to stay in an air-conditioned room. If you like to enjoy outside life and not be swimming every time you’re hot, my best advice would be to choose a home with a cooling breeze. Look up the regular wind direction
Make sure your house can stand a flood. If it rains or in case of a hurricane threat it can easily turn into a flood
The rain, the sun, and the wind have a big impact on your home. If you live near the sea the salt in the air damages even more. You will learn that stainless steel does rust. So use durable materials in the building process. Be aware that living near the ocean will increase maintenance costs significantly
Hurricanes in the Caribbean can be devastating. Make sure the building is hurricane-proof. I know most of the inhabitants of St. John USVI had to replace their roofs during the last big hurricane. Even though an island is ‘outside’ of the hurricane belt, still prepare for it. You never know. And it’s not a luxury to have a backup generator.
I have seen a lot of houses in the Caribbean build in several pods. Which to me is stupid. Maybe fun for a vacation but a no-go if you need to live there. If it rains or you get caught in a hurricane you do not like to walk through the heavy rain to get from the kitchen to our bedroom.
Mistake #4: Thinking all the Caribbean islands are the same
The only thing Caribbean islands have in common is that all of them are surrounded by the beautiful ocean and the temperature is great. The Caribbean islands are very diverse and each is unique. Do the research. Your 2-week vacation may give you the idea you are in paradise but that is not enough time to tell you what you need to know. Look further than the postcard experience. What are your requirements? Do you like to retire in paradise? Then you should check if there is adequate health support. You can choose to live remotely and enjoy the tranquility or do you want to live on a party island? Find out how developed the infrastructure is (roads, water. electricity, phone, and the internet).
My advice: Before you invest your money in your idea of a piece of heaven, do the research and maybe start with renting a home to buy you some time.
Extra tip: Spend some time (several vacations) on the island and stay in different locations. Learn which area on the island suits you best.
Mistake #5: Planning on flipping homes
Buying a home in the Caribbean
Your Caribbean real estate agent told you it was such a sweet deal. You jumped on it immediately trying to earn a quick buck. Think again! If you had read this article you wouldn’t have listened to the fortune seeker, calling himself a real estate agent. The Caribbean real estate market generally is a slow one so it can take longer to sell. Often it is not about dropping the price, there are just not many serious buyers. To make matters worse, your real estate agent also ‘forgot’ to mention that the government was planning an airstrip right next to your home. That was the reason the price seemed so ridiculously low. And selling your dream house is now a nightmare.
In general, when buying a home in the Caribbean, buy it because you want to spend an amazing time there with family and friends. The return on investment is all those incredible, precious moments.
If you like to make some money in the Caribbean my advice is to secure the perfect location. Waterfront is always a good way to go or choose an upcoming tourist neighborhood. The islands are small and great locations are scarce. If there is a shortage, the price will increase. Then, build a home that suits not only your wishes but also what ‘everybody’ wants. Choose neutral colorings for tiling, a good practical kitchen, and a nice, modern bathroom. Try and make your home as much suitable for vacation rental as you can. So if selling is taking too long, you can still make some money as a vacation rental. For example, make sure bedrooms are alike in size and make multiple bathrooms.
Mistake #6: Thinking that building a new home is cheaper
I lived through this mistake myself. I built my own home. My advantages over you; 1. I worked and lived on the island. 2. I knew a lot about the building process and knew the contractor. 3. I could get a good deal on the building price and I could make my own building contract.
I thought I knew what I was doing, but I still had to solve issues, every day! It was (sorry for my language) a shitload of work for me to keep the builders on track and building the house like the blueprint.
It will take more time (and money) than you estimated and if you can’t control the progress it’s going to be hard. Materials aren’t always available and that can throw you off schedule for weeks. Because most of the materials have to be imported, they can get quite expensive. Often, construction costs can multiply due to rain delays, construction companies going bankrupt and budgets were estimated way too low.
My advice: Don’t build yourself just because it is cheaper. It can be hard to find an exciting home for sale that will be exactly to your taste and in the right location. So in some cases, you do not have an option. Take on the stress and get involved in the building process. And hire a good project manager.
Mistake #7: Not realizing how long the buying process takes
Hmm. Even though islanders are easy-going, the Caribbean governments can make a process difficult for foreigners, even for locals, when buying a home. Government bureaucracy and the cultural differences can make purchasing your dream home a long and drawn-out process.
If you need a mortgage, every island has its own rules and restrictions, So make sure to talk to a local lender to be advised about the mortgage rates and the length of the process.
My advice: Take your time, be patient, and keep in constant contact with your real estate agent to be sure that the process goes according to plan.
Mistake #8: Forgetting about continuous maintenance
Oceanfront home Caribbean
Owning a home in paradise; no shirt, no shoes, sipping a margarita. Life can be so beautiful. I do not want to get you discouraged, but there is more to it. It is a lot of work maintaining your home. Especially for the buyers who buy a vacation home. When something breaks or e.g. your roof leaks, you might spend your entire visit working on your property or meeting up with the ones fixing the problem. Because everybody works on island time. If, and only if, the materials are on-island it can get fixed.
My advice: Hire a good property manager who can take care of all these problems and informs you while you are away. This way you will enjoy your holiday more.
Mistake #9: Believing your agent can properly price a home
Checking accurate market comps (what sold in the neighborhood and for how much?) is not so easy in the Caribbean. Sellers and real estate agents are often selling overpriced homes. Try to make comparisons with other listings online to get an idea of the average pricing in the area. Make sure to always check to local currency. Be aware of the exchange rates as you may be required to pay in the local currency.
Again, make sure you have a professional realtor because they won’t list any overpriced listings.
Mistake #10: Spending more money than you can afford
If the realtor shows you 3 houses: House #1. under your budget with some work to it. House #2. right on the budget but so so. House #3. extraordinary house but above your budget. Which one do you choose? The realtor already knows. Usually number #3.
Don’t fall for it to adjust your budget so you can buy the ultimate villa of your dreams. The whole reason for making a budget is you will be able to maintain all the expenses long after your purchase. Normally you need to have to put down a 20% downpayment and you can lend the rest according to your income.
I have seen several buyers make this mistake when buying a home in the Caribbean. Even more with buyers of land building their dream houses. They went above and beyond to make it impeccable. When the time comes to maintain the place or the taxes after it’s been appraised for a different value than first calculated, they are not able to effort its expenses. And the house isn’t as dreamy anymore but it’s becoming a burden.
Even if you view your home as a potential way to earn income through vacation rental, don’t count on that income to help you pay for the house. Keep in mind that when buying a home in the Caribbean, you don’t have to buy the ultimate beach house with a swimming pool and jacuzzi right away. It’s OK to start small.
My advice: Make sure to check your budget even before you start searching. Make sure to be aware of all the additional costs like taxes and building costs before bothering a real estate agent. Tell the realtor a slightly lower amount so you still have some wiggle room if he or she comes up with a perfect house just above your budget.