Buying Property, Income-earning, Island-Living, The Cayman Islands

REAL ESTATE INVESTING IN THE CAYMAN ISLANDS: WHAT TO EXPECT IN TODAY’S FAST-PACED MARKET

The Cayman Islands have always been an attractive prospect for real estate investors and developers worldwide. Whether it be due to the picturesque natural environment that boasts world-renown beaches or simply because property ownership is not barred by the neverending committment of property tax (tax-free is key!) – the Cayman Islands boasts one of the most vibrant and successful real estate markets of any other islands in the Caribbean and even many places across the globe.

There is no handbook on how or what form of real estate investment to make at any given moment within the Cayman Islands, and quite honestly, according to the great variation of investor and developer types within the islands – it is evident that you can break in to the Cayman Islands real estate investment market with relative ease.

As the local economy continues to experience an increased stimulation, and the population presently being at a steady climb; the need for additional residential and commercial units (both for sale and rent) has grown tremendously in the past three years with no apparent intention of slowing down anytime soon.

At this moment the most difficult consideration for any investor looking in to purchasing or construction additional properties is simply – to short-term let or to long-term let… or perhaps just to sell.

As more and more persons seek opportunities in the Cayman Islands for work and business the demand for long term rental units is massive, with many local real estate agents overwhelmed by the number of potential tenants seeking rental accommodations in a market that has far less units than what is currently required by the population. In fact, local housing statistics show that about 65% of Cayman’s population rely on rental accommodations.

Many innovative and keen investors and real estate developers have already spotted this trend and moved rapidly to fill the need with the construction of new complexes for long-term rental purposes. In fact, there has been such an upward swing of construction during the current boom that our local planning and building control departments have increased manpower to efficiently handle the workload as the Government has acknowledged the urgency of increasing both commercial and residential units for both ownership and rental purposes in order to swiftly meet increasing demand.

With all of this in mind, it is quite obvious that only a non-real estate guru would reject an opportunity like buying or building property in the Cayman Islands right now.

An experienced developer or investor can expect returns even before the new building designs are completed as pre-comstruction bargains are a major attraction and the buyer trust within the Cayman Islands real estate market means it does not take much to convince a serious buyer to tap in to the market through a viable purchase.

When considering Cayman Islands real estate as an investment option there are a number of things to keep in mind. You would think the fact that success in the market is not restricted to a specific development type would make it easier to decide the best investment option for you – but instead, it makes the deciding factor that much more difficult unless you are in the position to invest in multiple properties across a variety of property genres.

As you look in to your options, calculate a budget and set expectations for any Cayman Islands real estate investment you hope to make, here are a few considerations to ensure you are clear on what you want from agents, designers, contractors and project managers and your overall investment outcome:

  1. To build or to buy? This really depends on your own stamina for the amount of coordination it requires to get a project off the ground and whether you have experience in the local market already or not – it also depends on what type of property you want to materialize. If time is of the essence and you want to speed up returns, buying is an obvious choice. If you are investing to rent and want to begin earning within a few months, just buy and get it over with. However, as I have ranted about above, the current real estate boom means there is also a shortage of properties suitable as rental units that would provide the type of ROI a seasoned real estate investor would expect on such an investment made at this time – this time being, a time of excessive real estate return. So here is where we would promptly start the build process, so call your architect quickly.
  2. If investing to rent – how many units? Luxury or low-income? Inland, beachfront, canal? This all depends on budget. Many real estate investors fresh on the Cayman real estate scene opt for low income investments first to wet their feet for all the obvious reasons. Some reasons being: far less initial investment required, potential owners are quite easy to work with because their own real estate apetite is not as acquired, very high demand, initial land purchase is much lower and the location is not as important – the beauty of this is that many of the super successful local developers began this way and the investments were so lucrative that they are now serial-developers of superior high-end homes and complexes – so tapping in to the Cayman Islands real estate market by any means necessary is really what’s important.
  3. Set a reasonable deadline: whether building or buying, expect delays and plan for them. Even with delays it is still possible to keep a project’s momentum going by revisiting plans, budgets, touching base with service providers, suppliers and contractors, keeping all teams updated and working closely with new buyers and potential renters as everyone anticipates the project’s completion.

The small size of our privileged country and the willingness of our local Government to work closely with investors and developers to ensure the continued sustainability of our infrastructure and economy means that any person or entity that seeks to spread their real estate empire in to the Caribbean will find a vibrant, flourishing, laid-back market in the Cayman Islands of which all manner of real estate diversity is welcomed and appreciated.

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