A Pool of Opportunities for Foreign Investors
Over two years ago “The Great Storm,” Hurricane Dorian, hit Marsh Harbour and the Cays with never before experienced full force. It destroyed most of Central Abaco, also inflicting serious damage to many other parts of the island before continuing its ravage onto Grand Bahama.
The destruction, however, did not diminish the resiliency of many Bahamians who, barely a few months later, were seeking to invest in stressed or abandoned properties. Halfway through 2020 foreign investors had followed suite and, before the bulk of reconstruction had started, many real estate properties had been sold contributing to the steady climb of real estate prices.
A year later properties located on the water on Green Turtle Cay, Great Guana Cay, and especially on Elbow Cay had jumped back to before Dorian prices. The quick cash deals were gone!
So you would ask, what is left for present days foreign investors wanting to come to Abaco with the hope of making a return on their money?
According to local realtors, attorneys, business owners, and local Government officials Abaco still offers many investment opportunities. Dorian destroyed so many houses that have not been rebuilt yet, and might never be, that the island is suffering a major shortage of rental properties. Because of the influx of foreign managing staff and domestic workers from other Bahamian islands rental properties are in demand in a broad range of prices.
Some of the former owners who left the island after the hurricane with no intention of coming back have collected the insurance money and are selling their houses at a reduced market price. Therefore considering buying a “fixer upper” could offer a certain lucrative future, the timing of which depending on how long the buying process takes.
Short terms rentals are also a major possibility. Many houses on Green Turtle Cay, Elbow Cay, Great Guana Cay, and Man Of War Cay, are already on short-term rental sites such as Air B&B and VRBO.
For the environment- friendly investor, another long-term possibility might be to seek government land in areas relatively close to Marsh Harbour or Treasure Cay Airports to develop eco-lodges. Areas such as Snake Cay, Camp Abaco, Casuarina Point, Israel Creek, even further North or as far South as Sandy Point (boasting a small airport) would offer definite possibilities for such an endeavor.
Certain businesses are reserved for Bahamians only. However, if willing to partner with a local, an investor might consider for example, developing a marina or approaching the BAIC (Bahamas Agriculture and Industrial Corporation) to find out possibilities.
A foreigner wanting to invest in agriculture or light industry would have to submit a proposal to the National Economic Council of The Bahamas as well as proof of funds to support the project and apply to the Prime Minister’s Foreign Investment Office. A favorable government’s approval could be granted if they think the project is in the best interest of the country.
For example, an easy-growing crop such as Blue Agave would not be in opposition to what local farmers grow and would allowthe creation of a small industry to extract the Agave Nectar or a distillery to produce tequila.Investing in agriculture or light industry would also fall under the real estate regulations, as it would involve the purchase or lease of land.
Let’s review the real estate buying process for a foreign investor.
After viewing properties with a realtor, an initial price offer on the chosen property will be communicated to the seller, which the seller will either accept, counter or reject. When a sale’s price agreement has been reached, the parties will sign a letter of Intent prepared by the purchaser’s realtor. Vendor and buyer will then each retain a Bahamian attorney of which the vendor’s attorney will draft a formal agreement for sale (unless otherwise agreed upon). The parties will both sign the Agreement for Sale and the buyer will place a minimum of 10% deposit of sale’s price to be held in escrow by the seller’s attorney. The title search and title examination will be conducted by the buyer’s attorney, followed by an application for permit to purchase from the Bahamas Investment Board, if required. Once the title is approved, the closing documents will be prepared. The vendor & purchaser will execute the closing documents and buyer will provide the closing funds.
The above-mentioned process usually takes approximately 60 days.
After closing, the buyer’s attorney will take care of paying the VAT on conveyance, of having the real estate property tax transferred to purchaser, obtaining the Certificate of Registration from the Investment Board and if relevant, notify the Home Owners Association. Then the purchaser’s conveyance will be sent for recording.
The Bahamian Government is presently offering an incentive to buy properties under $250,000 (two hundred and fifty thousand Dollars) by cutting the conveyance VAT from 10% to 6.5%.
Since summer of 2021, reconstruction around Marsh Harbour and the Cays has been moving at a very fast pace, especially for commercial buildings. It seems that for many, the Thanksgiving and Christmas deadline that they had set for re-opening their businesses was approaching fast and they wanted to be ready for the start of the tourist season.
So come and visit Abaco for a night, a week, or longer. Get in touch with a Realtor.
Meet with an attorney. Consider the endless possibilities besides real estate, some of them being agriculture or light Industries.
To quote Ms. Hull, one of the attorneys who provided the legal information, “Opportunities go as fast as they come.” The present inventory of homes and business might soon be gone!
Before Dorian, Abaco was the second biggest contributor to the Bahamian economy and it will be again.