Bahamas Real Estate Investments

If you hear the whispers below the rumble, you know that the recent financial and housing meltdown in the U.S. has actually created some great real estate opportunities for smart investors in the Bahamas.

The price on some homes, especially second homes and vacant real estate in the Bahamas islands, has adjusted to more realistic levels – in some cases, far more realistic levels. This environment is favourable for long-term gains.

It may not be for everyone, but if you're in the right financial position, you may want to invest in a second (holiday) home or well situated piece of Bahamas real estate. However, there is a right way and a wrong way to invest - it's the wrong way that led so many to suffer in the recent housing crisis in the U.S. In our office, some persons have spoken of forming investment clubs to take advantage of new opportunities.

Don't think about investing in a second home until you've saved up for your nest egg and have held or reduced your expenses to keep it growing. Your money doesn't work for you unless it's your money.

Similarly, don't begin your Bahamas real estate investment adventure until you've polished up your credit standing. The best opportunities go to those with upfront cash and excellent credit. Maximise your borrowed capital by making sure you get the lowest interest rates and best terms. Shop around!

It then follows that you should not over-borrow. Real estate markets, in the Bahamas as elsewhere, are continually cycling up and down. Learn the lessons of the recent debacle, and don't over-leverage yourself to the point you can't survive a down period in the cycle. If you're smart about it, you won't get rich quick, but you will get rich right!

Over the years, we've seen second home and vacant property prices double, even triple, in value, especially in the Bahamas islands of Abaco, Harbour Island and Exuma. Some investors have made a mint. Others over extended themselves and were sorry they rushed into the investment without thinking it through.

If you are investing in Bahamas real estate, pick a home or vacant property in a good location, either on or near the beach, or elevated with sea views. It should be close to amenities with wide appeal. See if there is a rental history if you are interested in a home. Do not assume that the rental income will pay your mortgage! Factor in insurance costs, maintenance, etc.