Investing in property is a huge financial decision, and one you need to thoroughly research before you make a decision. The question is, if you live in the Caribbean, should you consider buying in Costa Rica or the Cayman Islands?
Living in the Caribbean doesn’t just provide sun, sea, and sand. In fact, the investment opportunities in this area are second to none, including in real estate.
Two of the most popular countries to invest in real estate are Costa Rica and the Cayman Islands. This is not just down to how beautiful these regions are, but the amount of money you can make on properties there.
The only decision you have to make is whether investing in Cayman Islands real estate, or Costa Rican, is the right option for you. In this post, we’re going to lay out the benefits of investing in property in both countries so you can figure out which is the best fit for you.
What Are the Benefits of Investing in Costa Rica vs. Cayman Islands Real Estate?
Both Costa Rica and the Cayman Islands are great places to invest in real estate, but what are the benefits of each country and is one of them a better choice than the other?
The Benefits of Investing in Costa Rican Real Estate
1. Luxurious living
If you’re planning on living in the property you invest in, there are lots of luxurious homes to choose from in Costa Rica.
Depending on where you buy your property, you can even get discounts at local restaurants and access to private beach clubs as part of your home maintenance and property insurance. The homes are also well maintained in a lot of areas, which means there’s less renovation work for you to do when you invest.
2. Popular with tourists
Costa Rica is also a popular tourist destination, so it shouldn’t be too difficult to rent or Airbnb the property when you’re not living in it to make some extra cash.
The country hosts 1.7 million tourists every year, mostly from the US and Canada, which earns Costa Rica more than $1.7 billion dollars a year. The government of Costa Rica has estimated that up to 80 percent of these tourists come to do eco-tourism activities.
It helps that Costa Rica has a stable political system and is a friendly, peaceful country that is included in the happiest countries in the world.
3. Affordable real estate
The properties in Costa Rica are quite affordable compared to prices in the US and Europe, but the prices are rising fast with more foreign interest.
The good news is with increasing prices means more return on your investment if you choose to sell your property a few years down the line. It’s better to get in there sooner rather than later if you want to get the most you can for your money.
4. Agreeable weather
There are only two seasons in Costa Rica; the dry season and the rainy season. Even in the rainy season, the days are usually sunny.
This means that you will be able to use the property for tourism all year round if you want to. Or, if you choose to live there, you’ll never have to deal with those pesky four seasons ever again.
5. Low taxes
Costa Rica boasts astoundingly low property taxes due to the fact that they’re based on property values, which the local municipality tends to set a lot lower than their true market value.
Also, the current property tax is only 0.25 percent of the recorded value of the property. This would make the annual cost just $750 for a $300,000 home, which is considered a luxury sized home in Costa Rica.
On top of the low property taxes, you also don’t have to pay capital gains tax when you sell your home. So, you receive both the original cost of the house plus the appreciated value tax free.
The Benefits of Investing in Cayman Islands Real Estate
1. Diverse choice of properties
To an outsider, it might seem that the Cayman Islands only caters to the super rich, but that’s not actually the case. There’s a wide selection of properties available, from high-end luxury houses to more affordable homes.
You can find small family homes in West Bay that are luxurious in their own right, a condo, or villa on Seven Mile Beach if you’re looking to rent out your property to rich tourists. Also, there are plenty of vacant land opportunities in and around Diamond’s edge if you want to build your own property.
2. No annual property or capital gains tax
Much like Costa Rica, the Cayman Islands doesn’t have capital gains tax and actually has no property tax whatsoever.
This makes the country attractive to people who want to buy a property to live in or rent out, as there is no annual property or tourist tax. During the pandemic, the rental market shifted towards ‘Staycations’ but should move back to short-term rentals now that the pandemic is dying off.
3. Clear title guarantee
If you’ve ever tried purchasing a home in the Caribbean, you’ll know how stressful it can be trying to obtain a clear title. Without one, you could face property disputes and other issues that can call your ownership of the property into question.
Thankfully, the Caymanian government is fully aware of this issue, and they offer a clear title guarantee on every piece of land or home purchased in the Cayman Islands.
4. High return on investment
The current return on investment (ROI) in the Cayman Islands is very high, and its real estate has seen very little fluctuation over the last two decades.
The profit you can make investing in Cayman Islands real estate tends to be a lot higher than the money you invest, whether you’re selling the property or renting it out. For example, a 2-bedroom flat can be rented out for $1700 to $2,700 a month, and this number has increased year-on-year.
5. Properties are in high demand
The demand for property in the Cayman Islands has been growing, with the value of sales increasing by 7 percent between 2019 and 2020.
At the end of 2020, there was an 84 percent increase in pending property transactions, which influenced an astonishing 98 percent increase in the value of real estate. This bodes well for the continued growth of real estate prices in the Cayman Islands.
Popular Phrase ‘Pura Vida’ Crossed Borders and Was Welcomed by the Costa Rican Society
So, Which Country is Better for Real Estate Investments?
In this post, we’ve shared the benefits of investing in property in both Costa Rica and the Cayman Islands.
Both countries have their own benefits and, based on what you’re looking for, it’s down to you which country you think is the right fit for your investment. Hopefully one of these countries has exactly what you’re looking for. We wish you good luck in your property investment.
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained investment professional. Be sure to consult an investment or real estate professional or solicitor if you’re seeking advice regarding a property investment in the Caribbean. We are not liable for risks or issues associated with using or acting upon the information on this site.
Photo credits:
Beach property – Photo by Leonardo Rossatti from Pexels
Sunset in Costa Rica – Photo by Samuel Charron on Unsplash
Property on Seven Mile Beach – Photo by Marc Babin on Unsplash
SP
