November 28, 2008 —NASSAU, BAHAMAS— There are hundreds of books on the
topic, but even for a well-read potential investor, purchasing that first home for investment purposes can be a scary undertaking.

So in addition to all those tips to be learned from real estate investing books, here are some things to keep in mind from a real estate broker’s perspective when making an investment home purchase, particularly regarding Exuma Bahamas real estate.

Rental Options
It’s a good idea to look at other rental options in the area, said Rachel Pinder, principal broker of Island Living Real Estate in Nassau.

Knowing what other rental properties charge can help the investor make a wiser purchase. Typically, investors purchase properties in which the rental income enables the property to pay for itself.

“You need to know how much you can reasonably expect to make in rental income to ensure that income covers your mortgage and maintenance expenses,” Pinder said. “If you are considering purchasing a home with a $3,500 per month mortgage, but rentals in the area average $2,500 per month, you need to know that.”

Vacancy Rates
Investors purchasing a property in an investor-dense area need to keep that fact in mind when making the purchase. The more rental vacancies there are in the area, the more competitive the market will be for locating tenants, Pinder said. On the other hand, if most rental properties in the area stay rented throughout the year, that is a good sign that there is a great deal of demand for rental units there, and the chances of finding and keeping tenants typically are greater.

Rental History
Investors who purchase real estate that is currently being rented should ask about the rental history of the investment property. The stronger the rental history, the more confident a buyer can feel that the property will be easy to keep rented.  Rental property that has sat vacant for several months can be an indicator that rentals in the area are down.

Increase Investment Value
There are several ways in which to make a real estate investment increase in value and in income potential, Pinder said. Doing renovations, particularly to update out-of-date looks, making physical improvements or building on to the structure all can increase a property’s value.

Larger properties can be subdivided and developed for additional income potential, or the property’s original usage could be converted if it is capable of another use that would result in more income and an increase in property value. For example, a residential home in a commercial area wouldn’t be capable of as much income as it would if the property was converted to a commercial use, she said.

Learn What Tenants Are Looking For
Real estate investors who will need tenants ought to gain a general understanding of what tenants are looking for before they purchase a property, Pinder said. It’s not a good idea to purchase a six-bedroom, five-bathroom home with the intention of renting it out if most tenants are seeking three-bedroom, two-bathroom rentals.

Making a few calls to property management companies and leasing offices within subdivisions and apartment complexes can help investors learn more about what tenants are looking for in housing, she said. Having this knowledge in hand can help the investor hone in on the types of properties to consider when making a purchase.

A Good Investment Opportunity
The Bahamas has become increasingly friendly to foreign investors to purchase Exuma Bahamas real estate, Pinder said. Under the IPLA, approval automatic approval is granted for foreigners to purchase residential property if it is less than five acres on any single island in The Bahamas. The only exclusions are if the property consists of more than half the land area of a cay, or small island, or involves owning a marina or airport. 

The IPLA also exempts foreigners from having to pay real property tax for up to two years if the land they purchased is undeveloped and the investor begins developing it during that two-year period.

Learn More
If you are in the market to invest in Exuma Bahamas real estate, please visit Island Living’s Web site: www.islandlivingrealestate.com, or call them for a consultation: 1-242-322-7979/80.

About Island Living Real Estate
Island Living Real Estate has more than 25 years of experience in real estate sales and rentals throughout the Bahamas. Island Living’s main office is located in one of Nassau’s oldest historic buildings on Bay Street, named “Red Roofs.” Red Roofs was built in 1896 and has been home to various families, a Gourmet Deli and now Island Living.

We don’t just help you get the keys to your new home… we give you the keys to your new life.  Welcome home!

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