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Jamaica Real Estate is a Solid Investment despite World Economic Crisis

“Uncertainty in global financial markets has created a surge for more solid investments” says Edwin Wint, President of the Realtors Association of Jamaica. Mr. Wint goes on to say in a recent press release that, “real estate is a stable and concrete investment, and the global economic fallout is increasing demand for property in Jamaica.” The Association recently staged its First Annual Expo under the theme, “Secure Your Future with Real Estate”. The publishers of the Jamaica Real Estate Guide were there providing their valuable resource for all homebuyers and investors of Jamaican Real Estate.

Over on the North Coast of the Island, developments are abound with Solis The Palmyra Resort & Spa offering 277 apartments and 11 villas at prices ranging from US$500,000 for a studio to US$3.5 million for a beachfront villa. There is also the Colony at Half Moon with plans for development of 30 private villas. Richmond Development in St. Ann offers a World Class Residential Community with units starting at US$195,000. These developments have been marketing heavily to overseas clients who are looking for a tropical getaway that is in close proximity to the U.S. There are more than 300 International flights coming into Sangster International Airport in Montego Bay weekly and there are no restrictions to foreign ownership of Real Estate in Jamaica. In addition to easier access to beachfront property in Jamaica than in the U.S., Jamaica Real Estate is quite an attractive investment.

On the financial side of things, latest numbers from the Planning Institute of Jamaica in their report of Mortgages issued in Jamaica from NHT, NHDC, Building Societies, Life Insurance Companies and Credit Unions indicate that the volume and value of mortgages disbursed declined.  The total number of mortgages disbursed fell by 8.2% to 8,553 during January –September 2008 compared with January – September 2007.  This is a turnaround compared with the continued annual increases recorded in volume and value of mortgages disbursed.  The number of mortgages disbursed went from 10, 556 year ending December 2006 to 12, 469 year ending December 2007 according to the report.   The value of disbursed mortgages amounted to $31,595 million for the year ending December 2007, this compared with the $25,563.9 million disbursed for the year ending December 2006.

INFORMATION, INFORMATION, INFORMATION

In order to make an educated decision when investing in any commodity, you need information. It is no different for Jamaica Real Estate. The Jamaica Real Estate Guide aims to be a friendly and informative partner for prospective homebuyers and investors. The latest issue which was featured at the Realtors Association Expo 2008 at the Hilton Kingston Hotel on November 23rd has an article about Mortgage basics, a handy mortgage worksheet and a checklist of items for a loan application. Additionally, readers will find the usual delivery of full colour listings by Real Estate brokers and developers who promote their listings actively in this handy resource guide.

The Jamaica Real Estate Guide which was first published in 2006 started with the mandate of being a partner to the Jamaican Homebuyer, arming them with information about local real estate trends and the home buying process. With the demand increasing for Jamaica Real Estate from the local population and the Diaspora, so has the readership of the guide. The publishers of the Jamaica Real Estate Guide responded to demand by increasing the distribution of the magazine from 3,000 to 20,000 copies in print per issue. In addition, the website was redesigned to allow for free online viewing of the magazine. Response to the new website feature has been great with downloads coming from Countries like Australia, Bermuda, Canada, Denmark and of course the USA, Canada, our very own Jamaica and other neighbouring islands.

Property Management companies charge on average 7%-10% of the monthly rent collected for receiving and depositing the rent checks. When the unit(s) becomes vacant you have a slew of other costs including; placement, advertising, and cleaning and/or repair fees. These expenses can add up to thousands of dollars. The following ideas could be adopted for owners using property management or not.

Some of the costs saving strategies that I have adopted into my residential real estate business include:

1. I use free online advertising such as craigslist for tenant placement and my results have surpassed results from paid advertising and newspaper classifieds. Some of the benefits include:

Brings in potential tenants from other areas that are often willing to pay higher rents.

It’s free!

I have had quicker results, instead of having the house or apartment sitting empty for over a month I have had tenants lined up and approved before the prior tenants vacate.

2. Property management companies do provide a nice summary of income and expenses which make tax time easier. This however is not specific to just property management companies. I use and recommend tracking your rentals using any of the available property management software on the market. There are even very complete free applications which do the job just as good such as this property management software.

3. Find a good repairman with a diverse set of skills. I use a man who was referred to me by a trusted friend and things are working out fantastic.

I have had bad experiences with letting a property management company manage the repairs and have found that they have not always had my bottom line in mind.

Their repairman may not be trustworthy

Their repairman may be over qualified to do general repairs and specialized professionals cost a lot more than a “jack of all trades” would.

Provided you have the capacity, doing some of the repair work yourself would of course also reduce costs

Utilizing property management does have its advantages as far as saving time particularly for investors who have hundreds of properties and limited time to maintain them. But for the full-time or small-time real estate investor I believe it is an unnecessary expense.