Carribbean hot spots within the next few years

52 Replies

Hello, I am fairly new to bigger pockets and this is my first forum question. I was wondering if anyone has experience with traveling to the Caribbean or buying properties in the Caribbean. 

I am wanting to purchase a vacation home, and also rent it out when we are not there. I have been to the Cayman Islands plenty of times, and love it, but I want to find somewhere else - a hidden gem maybe... that has yet to explode as a tourist destination, but close enough to a major town that airlines can fly into as I need to make it somewhat affordable and accessible to people who would like to rent it out. Of course we all want the best of both worlds; that is a hidden gem on a secluded/private beach, but close enough to a town to find good eats, drinks, and shopping. Not to mention interaction with the locals is awesome. 

I am open to any and all suggestions! However, I would like to avoid Puerto Rico, Dominican Republic, and Mexico, but that doesn’t mean if presented with a fantastic opportunity, I wouldn’t look into it. 

Thank you everyone! 

Respectfully,

Andrew James

@Andrew James why would you cancel out the Dominican Republic? they are the #1 tourist destination in the Caribbean, nice beaches and condos are extremely cheap...

I personally would not buy a house in a hidden gem that no one knows about....that just sounds like low occupancy and low prices to attract people.

Hidden gem near a thriving destination will at least guarantee occupancy, but as the vacationers won't be so close to the action, it may not guarantee high rental incomes. 

This is one of my favourite pastimes. I have done a ton of research and travel, and mild obsessing, and these are the destinations I have narrowed in on.

By no means am I an expert, and everyone has different opinions and desires for what they want in a destination.

For me, I prefer now non-touristy, tropical, authentic, safe(ish), and good bang for your buck. While places like the Exumas, Turks and Caicos, and Caymans are gorgeous, they are unfortunately out of my personal price range.

Here’s my short list:

Utila, Honduras - I loved this island. It’s small, safe, undiscovered and beautiful. It has that true island vibe and attracts divers and backpackers. Beachfront is still affordable and it’s accessible via both mainland Honduras and Roatan.

Ambergris Caye, Belize - It’s really starting to develop, but I loved the vibe, and the fact that it’s a build your own adventure destination. Small, easy to get around, beach bars, and affordable condos are still accessible (though I worry for how long and if it will end up over developed eventually). Belize also has title, and amazing low property taxes)

Samana, Dominican Republic - Though the beaches are gorgeous, I am not a fan Punta Cana and other touristy spots. Samana appealed to me - it’s gorgeous, green, mountainous and lush (surprisingly so), small, friendly villages, amazing beaches. And again, affordable real estate.

I almost wrote off Costa Rica because I got it in my head that I had missed the market, but a recent conversation led me to peek at real estate again, and surprisingly it is still within reach (Tamarindo area).

I haven’t been to Nicaragua, but that’s another one that keeps getting mentioned to me. I can’t speak to it though.

And I will add another one, because I really had no desire to return to Mexico, but was just reading an article about this topic, and it mentioned most of the places on my short list, and also added Isla Mujeres, so now I plan to explore that area a bit as well. The bonus of Mexico is the cheap, short, easy flights.

I would love to hear where others are looking/considering!

U.S. Virgin Islands. I hear this from some of my STR tenants. 99% of my tenants are contractors. They work on those big erections of steel you see at a petrochemical refinery and associated nitrogen fertilizer facility. Welders, pipefitters, boilermakers, electricians, instrumentation, etc. They tell me that they came from there or that they are going there next.

In other words, there is a lot of construction work being done in the USVI.  Those guys need a place to stay, whether it's a motel, camper or house.

Hi @Andrew James and everyone else,

Very interested in this too. I backpacked in Nicaragua in the Fall of 2014 (it was amazing, needless to say) and I noticed that there were a lot of 'for sale' signs and banners in front of gorgeous single family houses and villas near the beach around Juan del Sur, where I was mostly staying. I wasn't interested in investing at the time, but I did have a chance to talk to a local broker and remember the asking prices being shockingly high compared to what the locals make. Just by googling 'buy a house in Nicaragua' I now found the cheapest SFH going for $44k on one of the brokers' websites, a lot of them in the hundreds of thousands USD.

My main concerns would be:

- corruption

- collecting rent (what to do when tenants default?)

- vandalism

- unstable economy 

- and many other problems of an impoverished country

I'm sure once you have a good team (broker, agent, lawyer, insurance broker, contractor, prop.mgr) that you can trust, it's all doable, but building that might take time and money and physical presence. That said though, I'd also love to own a beach property in Nica, rent it out to surfers, maybe AirBnB it, and sell it when the time comes...

Would love to hear from someone who's actually done it. But like @Lucas Carl said, life might be way easier if you make your money here and enjoy a stress-free vacay in a prime destination.

Nicaragua???  I would be afraid of ending up like Benito Mussolini after WW2.

If you don't know, he and his mistress and his generals were summary executed and their bodies were hung upside down in Milan at the carport of a gas station.  Unhappy Italians threw rocks at the hanging bodies.  

Personally, I would not invest in Nicaragua.  The scheme of things is too close to Mussolini's Italy after WW2.  

Heed my advice and I won't read about you in a newspaper.  

All this sounds kind of scary, but don't let that discourage you about investing in a 3rd world country where you could be summary executed for being an American.

Check out St. Kitts. Lots of virtues with good infrastructure, govt. and tourism industry, not on the main hurricane track, still laid back and not a huge scene. Speaking to the place as a destination and solid place to own for what you say. Haven't investigated real estate value though and would be curious what you find.

@Paul Sandhu @Jan Kutrzeba I do hold similar concerns for Nicaragua. I haven't been, and I haven't done my own due diligence, I'm only suggesting it because it seems to be having a moment in the real estate discussion right now. I keep seeing it pop up on lists, and it's seen a recent tourism boost, so I think it's worth exploring for those who are narrowing down destinations. I've heard the political temperature has cooled there, but I fully agree that would be my hesitancy as well. 

I have similar concerns for Utila, while I love the island, I don't place a lot of trust in the Honduran government, and taxes are really high (off the top of my head, I think they're 18%). As well, all the Roatan tourism taxes and cruise port taxes go straight back to the mainland. There are definitely downsides to each destination.

Friends of ours, boat builders and lifetime sailors, actually went into the British Virgin Islands post hurricane and bought up damaged boats that they're fixing with a goal of launching their own charter company (which is a similar model to vacation rentals). I've been poking around at real estate there, but even with the hurricane damage, it's still pretty pricey. 

I'm super interested in exploring vacation rental ideas and destinations, so if anybody wants to chat more, don't hesitate to reach out. 

A good friend is from Nicaragua.  A couple of weeks ago he went down for his grandmother's funeral, and came back with the rest of his family because it's about to descend into civil war.  The U.S. has sent away all its "nonessential" diplomatic personnel and issued travel advisories.  According to my friend, the US media is giving almost no coverage, and very watered-down coverage, to the situation there.

If the natives are leaving because of unrest, pretty certain you don't want to be investing there right now.  Though you can probably get a good price if you want to risk it getting burned down in a riot :p 

Our Ocean's are rising so keep that in mind when investing near the coast. If you are in too low lying of an area, it may not be the wisest long-term play (unless we start building dwellings under water!)

@Jami Kloet I was just in Costa Rica last week with my son vacationing.

I definitely had my eye out for something that would make sense for a vacation rental. The problem would be the financing. As I spoke with some friends there, bank financing (according to them) was at around 12%. So really this investment would either need to be cash or bring in a few investor friends and co-own the property. And I’m not sure what the laws and limitations would be or if a syndication would be necessary. I guess some people could get together and create a business entity and buy it that way.

@Julie McCoy Thanks for that insight. I think it's easy for people to get caught up in the beauty and adventure of it all, without seeing the big picture. I will definitely be following the political landscape there. 

@Shiloh Lundahl Yes, I've been exploring business models like that and would love to see somebody doing it successfully on a small scale (say four properties on four different islands). It would be ideal - throw in an Orlando property, so you can take the kids to Disney once a year :) Belize, Mexico, Costa Rica. Each owner gets two weeks at each location per year, and the rest goes into rental pool. Like a timeshare, but on a smaller scale. I'm sure it could be done.

I would look at Belize. They have undiscovered areas to the south or you can look at Ambergris Caye to the north for a more developed area, although I’ve heard they are having issues with water. They have a good exchange rate and English is the primary language.

Another option would be to look at areas recently damaged from Hurricanes, a lot of Snow Birds will be ready to cut bait on their properties

We live aboard a sailboat part of the year --- That way we can see all the islands and if you don't like your neighbor-- the boat moves. ;)

@Jill F. My dream! Where do you tend to sail? 

We did a 10 day sail of the Exumas with friends this winter and I don't think I can ever vacation the same way again. We are planning to join our BVI friends next year and sail the islands there, and possibly join them in Newport this summer as well. It's an unreal way of travelling. 

While I dream all day of vacation property, you hit the nail on the head - buy a boat, and explore all the islands. I actually just said to my husband, forget the Caribbean, let's buy a gulf access home in Florida, and a sailboat. Best of everything! We do need to polish up on our sailing skills though, we're not quite as skilled as our friends, but we could probably get there. 

@Jami Kloet

Hi Jami,

We are still only semi-retired. We bought the boat at the end of 2009 and did a major refit. We got to spend one winter in the Abacos, and one in the Florida keys. One  summer we spent a good bit of time up on the Chesapeake but we usually travel in the winter and end up spending a good bit of time in Cocoa, Fl (just north of Vero Beach) because I grew up there and still have family there. We recently bought the boat a home-base slip in Little River, SC. where we are using it as a "summer place". We are are currently waiting for our new main sail to be delivered and are hoping  to head for the Exumas next January. If I had known how much I would enjoy sailing/cruising I think I would have sold all my stuff and my house and bought a newer, bigger boat ;).

Originally posted by @Jami Kloet :

@Jill F. My dream! Where do you tend to sail? 

We did a 10 day sail of the Exumas with friends this winter and I don't think I can ever vacation the same way again. We are planning to join our BVI friends next year and sail the islands there, and possibly join them in Newport this summer as well. It's an unreal way of travelling. 

While I dream all day of vacation property, you hit the nail on the head - buy a boat, and explore all the islands. I actually just said to my husband, forget the Caribbean, let's buy a gulf access home in Florida, and a sailboat. Best of everything! We do need to polish up on our sailing skills though, we're not quite as skilled as our friends, but we could probably get there. 

 Whenever I have friends tell me they want to go to the Bahamas, I say forget the big cruise ship to Nassau - that's a waste. THE way to go is private vessel in the Exumas. Absolutely breathtaking, one of the most beautiful places imaginable. I'd go back again any time.

Also, something to consider on the investment front - when I was vacationing in Panama last year, I rented a stateroom on a sailboat and sailed around the San Blas islands, which were also spectacular.  A loosely affiliated group of nomadic sailors would list their staterooms on AirBNB.  I'm certain similar listings exist throughout the Caribbean, that's just the first time I'd encountered it.  But certainly a way to meet new people and offset some of your costs while exploring the Caribbean in your sailboat!

@Julie McCoy I couldn't agree more. The Exumas are the most gorgeous place I have ever visited and I can't imagine doing it any other way than on a sailboat. The water just sparkles, and the beaches are endless. It's unreal. I dream of Staniel Cay on a daily basis. We spent one day in Nassau before we set sail, and it definitely wasn't my scene. Although, we departed from Palm Cay and that spot was pretty gorgeous. 

@Jill F. Enjoy! I hope that's me some day! There's nothing like being on the water. My Oma used to say, "It's like a tonic." 

@Andrew James - as a new investor, I’d urge greater than usual caution when considering the Caribbean as your first investment. Distance makes investing more challenging, as does seasonal occupancy and governments which operate differently and/or are less stable than our own(though our own government has not been a paragon of stability lately.)

By investing in the Caribbean, you’re adding those challenges plus you’re throwing in the occasional hurricane.  Furthermore, many owners in the Caribbean bought their properties as vacation homes, diminishing the connection between what a home rents for and what it sells for(and not in the direction an investor would like.) 

But if you must invest in the Caribbean, consider what most early investors/developers did on Grace Bay in the Turks and Caicos. They bought land, built condos, then sold those condos. Often, management is on site and many condos are kept in the rental pool. This usually just means the owners don’t have to pay maintenance- I’ve never heard of anyone profiting from buying a condo in this way. 

So the developers have performed some interesting magic- they’ve sold condos to people who cannot hope to profit on the cash flow. I guess if the cash flow were compelling, the developers would’ve kept the units for themselves😂.

I suggest buying locally(or more locally) and using real estate in the Caribbean for its primary purpose- kicking back and chilling out 🍸 

I guess the discovery question here is are you looking at the Caribbean as an investment or a second home for yourself/family and rent when vacant?

That will help narrow down the questions - if an investment you'll focus on the high tourist area with major airports flying in/out, good local transportation system, less than an hour drive from the airport, a low crime rate etc.

If personal then you'll look for an environment that suits your taste (tropical, party central, secluded, dive-friendly, luxury, affordable etc).

Almost every island I've visited has realtors from America who decided to setup shop there and help out-of-state investors purchase property. I would google your destination and start reaching to realtors to get a sense of the real estate market and what's happening.