Our vacation house hack in the Islands - Montego Bay, Jamaica

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Our vacation house hack in the Islands - Montego Bay, Jamaica

Frank Robinson
Rental Property Investor · Peekskill, NY · Member since 2019 · 31 posts · 11 votes

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $10,000
Cash invested: $50,000

Purchase of 3 Lots (1.5Acres) in Montego Bay, Jamaica WI just 10 miles from the airport + 3 miles from the nearest beach. Construction nearing completion on the first 4 Units (2BR / 1 BTH).

What made you interested in investing in this type of deal?

We vacation in Montego Bay annually and also have some family still living here. Over the years my wife and I have dreamed of buying a vacation home instead of giving our money to the resorts all the time. We opted to first build some rental units since there is high demand. The side benefit to this is that it will eventually pay for our own vacation home.

How did you find this deal and how did you negotiate it?

We were lucky in that a family member purchased and built their home in the same community and we were able to witness the entire process as we visited yearly. Although we didn't get in on the ground floor we believe we got a great deal on our lots.

How did you finance this deal?

Cash purchase

How did you add value to the deal?

As opposed to building a vacation home for us to use a month or two each year we shifted to putting up rental units that will give us needed Cash Flow.

What was the outcome?

It was a long and slow process but we will

Lessons learned? Challenges?

Building a project such as this remotely is challenging to say the least. We could not have done it without the help and support of our family. The other item is that inflation and currency risk is a big problem in the Caribbean Islands and given that materials are imported the cost swing a lot. Move quickly on your construction and secure materials on the frontend or else you will pay later.

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    7y

    Interesting,  I thought I was going to read about a vacation house and  I am reading about how you will  get the money for that vacation house. Great idea.   Were there any legal challenges or differences you would highlight?   Any construction differences?  What is your target market for the rentals, short or long term rentals?   How will you manage this property?  remotely? property manager?

    0Reply
  • Bob B.
    Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    Pictures would be great

    0Reply
  • Frank Robinson
    OP
    Rental Property Investor · Peekskill, NY · Member since 2019 · 31 posts · 11 votes
    7y

    Hi Colleen, yes I understand.  I am mainly going for long term as there is high demand in this area.  We are also open to renting short term in the event of a vacancy.  There were no significant legal challenges given this is fairly small scale. Due to the risk of hurricanes we need to build the main structures from block, steel and cement.  So 2X wood structures are not ideal which drives the labor and materials cost quite a bit higher than they would be otherwise.  The property will be managed by a local property management company that currently handles units owned by my inlaws.

    1Reply
  • Hezron Anderson
    Summerfield, Clarendon · Member since 2017 · 19 posts · 3 votes
    7y

    Interesting. I am very familiar with this process as well. I've built a home in Jamaica as well and have 2 other properties (land). I am currently selling one of those lands- which is a beach access 18,000 sq. ft lot next to the beach in a private residential community on the North Coast- about $140K. I don't know if anyone here may be interested in that one- but if you are, you may reach out. It's about 5 mins walk from the beach. (My Display picture is taken from the beach itself). 

    When going into rental property development- the location in Jamaica is very important. if it's in a local town- you will literally only be looking at near to $600 per month. If it's in an upscale community, you can easily get up to $2000 per month (for just a 1 or 2 bedroom). If you are choosing to list it on AirBnb, then you can easily scale that to over 10K per month. If it's a big property and you choose to build like a bunch of townhouses on it (maybe 4-5 units), then you can actually sell each 2 bedroom townhouse for at least $250,000 (if it's 5 units, then you just made over 1.2M USD, (even though you may spend approx $110-130k or so to build one. 

    0Reply
  • Wesley Henry
    Rental Property Investor · Ontario, CA (Ontario) · Member since 2019 · 10 posts · 2 votes
    6y
    Originally posted by @Frank Robinson:

    Investment Info:

    Large multi-family (5+ units) commercial investment investment.

    Purchase price: $10,000
    Cash invested: $50,000

    Purchase of 3 Lots (1.5Acres) in Montego Bay, Jamaica WI just 10 miles from the airport + 3 miles from the nearest beach. Construction nearing completion on the first 4 Units (2BR / 1 BTH).

    What made you interested in investing in this type of deal?

    We vacation in Montego Bay annually and also have some family still living here. Over the years my wife and I have dreamed of buying a vacation home instead of giving our money to the resorts all the time. We opted to first build some rental units since there is high demand. The side benefit to this is that it will eventually pay for our own vacation home.

    How did you find this deal and how did you negotiate it?

    We were lucky in that a family member purchased and built their home in the same community and we were able to witness the entire process as we visited yearly. Although we didn't get in on the ground floor we believe we got a great deal on our lots.

    How did you finance this deal?

    Cash purchase

    How did you add value to the deal?

    As opposed to building a vacation home for us to use a month or two each year we shifted to putting up rental units that will give us needed Cash Flow.

    What was the outcome?

    It was a long and slow process but we will

    Lessons learned? Challenges?

    Building a project such as this remotely is challenging to say the least. We could not have done it without the help and support of our family. The other item is that inflation and currency risk is a big problem in the Caribbean Islands and given that materials are imported the cost swing a lot. Move quickly on your construction and secure materials on the frontend or else you will pay later.

     Thank you for sharing your information is definitely helpful as I looking to invest in Jamaica. Are the units townhouses or single house? And did you buy the land and construct yourself?

    0Reply
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