Jamaica-- Real Estate and Business Opportunities?
I will be headed to Jamaica in January for a week (Ochos Rios) and was wondering what kind of business opportunities or real estate opportunities exist in that area that I might be interested in checking out.
If there are any, with whom should I get in contact to get more information? What kind of hoops am I going to have to jump through in Jamaica to start/buy a business or buy real estate?
Thanks.
Insight into real estate investing in Jamaica
IN THE current environment of relatively low money market interest rates, rising property values and tepid stock market returns, real estate investing continues to be very attractive.
General Manager of FirstCaribbean Building Society, Lenworth Tracey, explains the benefits of real estate.
"There are real estate investors who want short-term returns and could consider new developments. In this arrangement you buy pre-construction (before building is completed) and then resell when the development is completed to earn significant returns.
"However, for someone who is planning for retirement, the investment objective would be long-term. This investor would consider a more established property where they can get rental income and a more modest capital appreciation.
"And once the property has adequate equity, you can access that money to buy another property, start a business or fund education for themselves or their children."
However, investing in real estate is not as easy as it may seem.
First of all there is the cost of entry. Realtor Joyce McEchron of McEchron & Clarke explains that the mid-range price for investment property would be around $8 million to $14 million. "In this market, that price would buy either a two-bedroom apartment or a two-bedroom townhouse."
However, this can be financed and Mr. Tracey explained that second-time buyer could access a mortgage at 15 per cent, or use a home equity loan at 18 per cent.
LOCATION
Next, is the location. The experts say that this is one of the biggest risks in real estate investing. If you buy in the wrong location, you may not be able to resell or have to cut your price to create demand.
Mrs. McEchron adds, "Investors should consider the Kingston 6 and 8 areas where they can command good U.S. dollar rental."
And if the thought of collecting U.S. dollars is your idea of landlording heaven, Janet Phillips of Keyland Real Estate cautions that you have to provide a hotel-like atmosphere for these discerning tenants.
"Tenants who pay U.S. dollars usually come to Jamaica with only their suitcases. And so, as the landlord, you have to provide every single thing. They want all fixtures, 24-hour manned security, furniture, air conditioning, washing machine and dryer, forks, napkins, dishware, swimming pool anything they would find in a hotel."
However, for investors with a more modest budget and expectations, Mrs. Phillips advises that the rental market in the $15,000 to $25,000 per month bracket is underserved. "There is such strong demand that these properties almost rent by word of mouth."
And regardless of your investment objective, there is the cost to own. REIdepot.com says, "Unlike investing in the stock or bond market, real estate has ongoing costs. There is monthly maintenance insurance, repairs, property taxes and property management fees if you are an absentee landlord."
Note that local property managers charge, on average, 17.5 per cent plus general consumption tax of the monthly rental income.
http://www.realtorsjamaica.com/ - I found this site is very useful when I wanted to start a real estate business.. I wasn't cut out for it sadly too competitive.. but they help you advertise and give you information on loans and loan agencies. etc
Well when you come to the island look up a good lawyer. Thats the best advice I can give
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