Caribbean Investment in Residential or Commercial Property

18 Replies

Hi Everyone, For anybody who has experience investing in the Caribbean, due to the recent hurricanes that have hit the area, is now a good time to invest in places like San Juan or Saint Martin (either residential or commercial)? Or, due to government obstacles and/or population outflow, should we just stay away?

I'm curious about this, too.  And looked at the same locations you mention.  The breakdown of law and order with armed gangs roaming the streets in St. Maarten leaves me very concerned about investing there.  OTOH, Puerto Rico was much calmer, even with the ongoing problems they still face.  But there have been large outflows of residents from PR, and the predictions are they won't return.

Originally posted by @Jon Holdman :

I'm curious about this, too.  And looked at the same locations you mention.  The breakdown of law and order with armed gangs roaming the streets in St. Maarten leaves me very concerned about investing there.  OTOH, Puerto Rico was much calmer, even with the ongoing problems they still face.  But there have been large outflows of residents from PR, and the predictions are they won't return.

 This is an interesting point, I wonder going forward if this will lead to higher appreciation in Florida, I heard on NPR this morning there are at least 190K Puerto ricans in Florida right now. That has to have implications in the housing market and politics since those puerto ricans can vote as soon as they establish residency

Michael, 

I'm currently in St Maarten, the real estate prices has stayed the same but there is rumors of large numbers of foreclosures coming in February when mortgage payments will officially start. If you need more insight about St Maarten let me know.  

Originally posted by @Jon Holdman :

I'm curious about this, too.  And looked at the same locations you mention.  The breakdown of law and order with armed gangs roaming the streets in St. Maarten leaves me very concerned about investing there.  OTOH, Puerto Rico was much calmer, even with the ongoing problems they still face.  But there have been large outflows of residents from PR, and the predictions are they won't return.

Count me in the curious class as well.  It's an interesting set of circumstances.  I can't recall off the top of my head where you've had this massive event AND the residents can immigrate without much friction to somewhere like the US.  

Originally posted by @Bill R. :
Originally posted by @Jon Holdman:

I'm curious about this, too.  And looked at the same locations you mention.  The breakdown of law and order with armed gangs roaming the streets in St. Maarten leaves me very concerned about investing there.  OTOH, Puerto Rico was much calmer, even with the ongoing problems they still face.  But there have been large outflows of residents from PR, and the predictions are they won't return.

Count me in the curious class as well.  It's an interesting set of circumstances.  I can't recall off the top of my head where you've had this massive event AND the residents can immigrate without much friction to somewhere like the US.  

 Katrina was something like this.  Lots of folks left New Orleans for Houston, Baton Rouge, Mobile and other locations.  According to the Wikipedia article, the population of Louisiana declined by over 200,000 after Katrina.  PR is already down (by 2016 estimates) from 3.8 million at its 2000 peak to 3.4 now.  According to a NYTimes article dated Nov 17, 168,000 people have left since the hurricane.  I've spent some time looking at residential investments in PR over the last few years.  But this population decline means less demand, so I'm not sure this is a good place to invest.

I would be concerned about infrastructure, the rule of law, and property management. I was talking with my kids track coach last night. His wife is from Puerto Rico. None of their friends or family down there have power back yet. The island has such huge fiscal problems, that maintaining the electrical grid was a low priority. They need an enormous amount of capital to build a grid that will last.

There's such a huge variation from island to island and nation to nation in the Caribbean. It would require a lot of research to fully understand a specific market. Having said that, one of my goals in the next 10 years is to acquire a tropical vacation rental property. We have enjoyed our times in the Caribbean and often stay in a vacation rental because we are a family of six.

As with any real estate investment purchase, let the metrics drive the decision.

Originally posted by @Jon Holdman :

 Katrina was something like this.  Lots of folks left New Orleans for Houston, Baton Rouge, Mobile and other locations.  According to the Wikipedia article, the population of Louisiana declined by over 200,000 after Katrina.  PR is already down (by 2016 estimates) from 3.8 million at its 2000 peak to 3.4 now.  According to a NYTimes article dated Nov 17, 168,000 people have left since the hurricane.  I've spent some time looking at residential investments in PR over the last few years.  But this population decline means less demand, so I'm not sure this is a good place to invest.

Agreed that there are some similarities and those similarities might shed some light on how PR will develop but also many differences.  NO, Houston, Baton Rouge, and Mobile all are mainland USA and have people in Congress to get them disaster funds.  PR doesn't have that advantage and I think it may be more appropriate for the purposes of this kind of analysis to think of them as a different country.  

Yes, they are US citizens but they have no voting rights in Congress and no electoral votes for President.  They have very little political capital and, as we've seen, are often treated as a non-US territory.  I really want to emphasize that I'm not making a value statement here.  I'm talking about political realities.  They cannot trade votes for investment like other states.  Currently, nobody is afraid of losing an election for not helping PR like they would be in other states.  

This is on top of the fact that PR had some substantial economic problems even before the hurricane.  The hurricane only exacerbated those problems putting further strain on an already stressed economy.  

Just saying that this makes it somewhat unique in that sense. 

@Bill R. @Jon Holdman Hey guys! Fellow puertorican here. It is in my knowledge that the government has given people the chance to not pay they're mortgages until January. If this is not extended, this will start another huuuge wave of foreclosures. The problem with this is that it takes forever for the property to be processed with the bank so these properties will be available in the coming years. I think in the San Juan area, because most jobs are here and more condensed population, it is a good idea to invest in rentals and airbnb. Hope this helps.

In my humble opinion... after living in Puerto Rico 20+ years and becoming very familiar with the political, economic and cultural situation of the island (after all I AM puertorican), I strongly believe that what the future holds for Puerto Rico is very similar to that of the Dominican Republic. Which quite honestly wasn't too far from being true prior to the hurricane. 

And what I mean by that is that I see PR becoming a destination for tourists & AirBnB users. An upper class that's well off, the majority of the people on the island living in poverty and a middle class that's basically non-existent. Where there's WAY too much corruption, government waste, and bureaucracy that it's almost impossible for the locals, without "connections", to run successful business' therefore not being able to stimulate the local economy.

Having said all that... no one can dispute the absolute beauty of the island. The beaches, the mountains, rainforest, and all of the eco-systems that exist on the island are stunning. The beautiful people and not to mention... THE FOOD! OMG hands down the best in the world!

So if I were to advise anyone on investing on the Island I would definitely tell them to consider purchasing property to accommodate tourist and people looking for vacation rentals. 

That's my .2 cents. You do your due diligence and research before investing. 

PS 

I'll be visiting the island from January 10th to the 17th. I'll be meeting with a several local Real Estate Agents so I should be able to come back with a much better perspective.

Apparently - investments are booming in Jamaica and there seems to be rapid changes in the Tourism industry as the country takes the lead on Caribbean Economic Leadership. Chinese investors have flooded the island, particularly the North Coast, which has been in serious expansion with Hotels, Housing units, AirBnB communities, Commercial build-outs and upscale residential communities. 

Additionally, over the past 5-10 years, almost all the hurricanes that threatened the Caribbean diffused after hitting those first countries from the right, leaving Jamaica untouched (call it- sheltered) in the middle. This has helped a lot, which has seen Jamaica make a turn as the leading Caribbean country for investments. While there may be incidents every now and then in certain remote areas, the crime rate has gone down and many overseas personnel are purchasing lands and ready-built apartments in Jamaica, mostly for AirBnb/vacationing purposes, as well as for commercial development. 

Just my 2 cents, based on experience and keen observation over the years. Feel free to reach out with any queries. 

Hezron. 

We had a stop in Montego Bay Jamaica on a cruise and went to a beach.  I liked it, though some folks refuse to get off the ship there, including some of our travelling companions.  I've looked into going back there, especially Negril.  And I've looked at a couple of small hotels there.  But there are issues that hold me back.  The biggest one is the abysmal health care.  Everything I've read about healthcare in Jamaica comes down to "you go to a hospital to die".  I'm sure its not quite that bad, and not as if health care is great on other islands.  But its a big enough concern to keep me away.  The other big issue is crime.  Its one of the few places in the Caribbean that the state department advises against visiting.  And while the usual advice is crime is mostly directed against residents it does affect visitors, too.

Good day guys, I'm a realtor in St Maarten and yes there allot of opportunities at very low prices. Specially fixer uppers and land. 

@Jon Holdman I am not sure where you got the news of gangs roaming the streets but this is not the case. After the Hurricane there was looting of damaged stores and that is all behind us now. We are now rebuilding and with every restart there always allot of opportunities. 

You can message me direct if you have more indept question on whats happening on the ground now. 

@Kareem Rombley that comment was from the immediate aftermath of Hurricane Irma.  It was from reports of people who were there at that time.  Perhaps overstated because looters can certainly look a lot like an "armed gang".  Nevertheless the situation was bad enough for the Dutch army to send in troops to quell the situation, so its not like this was a minor incident.  Despite also taking a lot of damage I did not see reports of similar problems in Puerto Rico.  I'm sure the situation has improved now.  Its that period of chaos that concerns me.

@Emily Royce , we have loved Belize and the Cayman Islands. Ambergris Caye in Belize is laid back with good food in San Pedro and lots of snorkeling or diving. The Cayman Islands may have more to offer, but that brings with it more people. They both felt very safe.

Originally posted by @Emily Royce :

@Bob Langworthy where would be a good first Caribbean vacation? Looking to go in wintertime where the water will still be nice and warm, with snorkeling and clean modern amenities, good food and reasonably priced.

 I would recommend Sint Maarten or Aruba, in terms of getting a property and being able to get it rented short term is easy and the island is easy to move around.