In Jamaica’s existing economic dilemma Jamaica real estate seems to be, if not the single best investment opportunity in the country but many argue in the Caribbean. Most investment managers will always cite that real estate should play a crucial role in planning of an investment portfolio. This is specifically because property rarely losses value and normally appreciates at a steady pace. This had been true of the North American realty until early 2008 when property prices crashed leaving many owners holding mortgages well in excess of property values. glenn delve
Though this scenario was the precursor to the plethora of foreclosures across the USA, this problem was not felt in Jamaica. Property prices continued their steady rise of at least 3.5% per annum. Despite cumbersome legislature which seemed designed more as a hindrance to the buy and sell process, property sales were still on the rise. As more and more global investors have taken up some of the many offers in the Jamaican realty market, there is still some lack of real transparency and due to such a high demand, prices have still remained buoyant.
In Jamaica, property investors who are seeking short-term returns often target developments. These investors purchase pre-construction (i.e. before the dwelling is completed) and then quickly resell the property within a few days after completion, earning significant returns on their initial capital investment.
Others that are planning ahead for retirement, might have much different investment objectives in mind and hence invest in already developed properties to garner rental income revenues and still earn based on capital appreciation of the property. When the property has substantial equity, the investor can access that equity to purchase another lot of residential property, repeating the cycle as they go along. However the prospect of investing in Jamaica properties is certainly not as easy as it may seem initially.
Barrier to entry into the market include the sizable capital investment required ranging from JMD$8 million to JMD$14 million (just about USD$120,000). On the open market in Jamaica that price could purchase a two bedroom apartment or townhouse.
Another of the major risks in Jamaican real estate investing is purchasing in desolate location, there might be no demand or little demand because of factors such as crime, water and power supply and communication hindrances.
Jamaica property Investors should stick with the Kingston and tourist trafficked environs such as Montego Bay and Negril where U.S. dollar rentals are much more possible than in any other region island wide.
Though regardless of your property and real estate investment objectives, one must not forget there is a cost to own property. While investing in the stock market or mutual fund market, Jamaica real estate has operating costs, these include monthly maintenance, property insurance, ongoing repairs, Jamaica property taxes and management fees if you utilize a property manager.