Why buy property in Jamaica once you have successfully settled into a foreign land? Well, it depends on whether Jamaica is considered your home away from home; or it may depend on whether you wish to invest in Jamaica, or it may simply be the case that you are now at a stage where you can manage to treat yourself and the immediate family to some private accommodation independent of the usual stop over at the relatives.
There are numerous ulterior motives for wanting to be master of your own place in Jamaica. This two part article discusses some of the practical considerations of acquiring Jamaican realty and reviews pointers for successful property management.
In considering the acquisition of property in Jamaica one of the early questions must be whether such an ambition is within your affordable means. However once you get pass the financing options, which can be endless in their variety, the next task is to start to identify the type of property.
Whether the property is intended to be used as a home or for investment, the security of your return must be a mindful deliberation from the outset.
For investment purposes, realty is commonly regarded as being a safe long term security. In terms of the growth potential for the value of your investment, the relative appreciation value of realty is more likely than not to out perform most alternative types of investments.
Whilst macro-inflation has the effect to devalue liquid savings, it has no such affect on the price of realty. Whilst shares may be vulnerable to stock market crashes, realty is immune to the conditions of share trading. The truth of the matter is that the long term trend of property prices is always on the up. The main influence which affects the price of Jamaican realty is the fact that there is a static supply of land for an ever increasing population, who are enjoying ever improving means to access property ownership.
Part 1 of this two part article looks at the various choices of different types of properties and there respective suitability to be subjects for investment.
Choosing the right property
Whether to decide to buy a lot or an existing house / apartment are basic questions when choosing the right property for your circumstances. From an investment property perspective, there follows a brief review of relevant considerations when purchasing Land, Apartments, Town Houses or Houses:-
Land – A person may purchase undeveloped land as an investment or with the intention to later construct their ideal custom built house – perhaps for your retirement. Land may be sold as a lot, being part of a housing development scheme, or on an independent title. Land situated in a sought after location can be relatively expensive when compared to the same size lots in alternative less expensive locations. The importance of situs of the property is discussed more particularly in part 2 of this article.
When purchasing land as an investment, it is recommended that this exercise should only be undertaken as a long term venture, with a minimum duration of between 5 – 10 years. When purchasing or selling any realty, professional legal fees, statutory charges, transfer tax and stamp duty will accrue. These are standard unavoidable conveyancing costs, which a prudent investor should expect to recoup on the resale of a property, nevertheless it is good investment planning to avoid their too frequent repeat.
In purchasing land situated in a housing scheme one must be mindful of the conditions of sale and the restrictive covenants endorsed on the title. Some housing development schemes may impose obligations for the new owner to begin to construct a house within a set time. Other obligations may involve there being a minimum value requirement of the building to be constructed. These types of conditions are designed to generate the orderly development of the housing scheme. Whilst these requirements may sometimes seem onerous, in the right measure they are essential aspects for creating an organized self-regulating housing scheme. It should be pointed out however that such schemes do not provide fitting conditions for purchasing their lots as investment holdings.
Apartments – These are usually located within a complex. Some complexes have security personnel stationed at the entrance gate. All apartment complexes should have a collateral owners’ agreement covering the contribution arrangements for the maintenance of the roof, the common areas of the apartment block and the upkeep of the grounds of the complex.
Apartments readily lend themselves to being utilized as second homes to overseas owners. In a good complex the external common parts of the property are regularly maintained and the grounds well kept. A sound apartment in a secure complex can either be let to tenants or left empty for months at a time. It can be used intermittently or hired to facilitate visiting family or friends. In many respects an apartment is suited to double as both a second home and investment property. On the other hand, proximity to neighbours and lack of private garden space may make apartments an inappropriate choice if you are looking to purchase property solely as a retirement home.
Town Houses – A town house in Jamaica is effectively a terraced house, ie, situated as part of a row of houses. They are far less common than houses or apartments. In terms of their suitability for non-resident owners or as an investment property, they are in many respects similar to apartments. When the Town house is situated in a secure complex, the grounds will be maintained under a scheme common to all the house owners. An added benefit of a Town house is that unlike apartments, they may include their own garage, which could be handy for keeping a stand-by vehicle. The downside of Town houses is that there are less of these types of properties to choose from, and the location and the size of the property should be two matters of paramount importance.
Houses – Like any property, a detached house must be maintained inside and outside. It must be protected from weather, secured as to not look abandoned, and the lawn grass must be periodically cut to prevent the yard looking unkempt. If there is a trusted relative or property management agency available, a house is as good an investment as any other type of property. A cautionary note, however, is that careful forethought should be given if choosing to purchase a house solely for the purpose of long term investment.
Part 2 continued….January 1st, 2007
Hamilton Daley is a practising Attorney-at-Law in Jamaica [tel. (876) 967 0224], Solicitor Advocate in England and Managing Director of T.R.A.D.E. Ltd. Entrepreneurial Diasporians Jamaica calls you to duty. TRADE exists to facilitate trading bridges between Jamaica and the rest of the world.