Guide for Canadians Buying Real Estate Property in the Caribbean
Lush islands, beautiful beaches, and cruises on true blue crystal clear water – what's not to love about the Caribbean? Here's how to invest in Caribbean property as a Canadian.
One thing that comes to mind when you hear about The Caribbean is "tropical paradise." Yet there's more to The Caribbean, which covers many countries with different cultures, cuisines, histories, laws, real estate markets and economies.
Still, the Caribbean is a popular hotspot for Canadians looking to invest in foreign property based on a report¹ compiled from average Google monthly search volumes. It offers many options, whether you want a place to call "home" in a stunning beachfront location or an excellent investment that generates good income.
The big question is where to start as a Canadian looking to buy a home in the Caribbean.
First step, use this guide to point you in the right direction before parking your cash.
Why buy property in the Caribbean?
There are many reasons why Canadians might want a slice of Caribbean haven. Here are some of the top reasons:
Strengthening Canadian Dollar. The outlook is good for the Canadian Dollar, which is expected to strengthen², thus making property investments more affordable for Canadians.
Proximity. The proximity of the Caribbean is such that the small Caribbean island country, Turks and Caicos, has been on the list of proposed provinces and territories of Canada. Buying property in a beautiful foreign country close to home certainly has its appeal.
Nice weather. If you're coming from a cold country like Canada, the Caribbean's tropical climate provides many opportunities to sit back, relax and soak up the sun while enjoying the clear blue skies.
Beautiful locations. The Caribbean is a wide and varied region with a host of countries, territories, and dependencies, all of which have many naturally beautiful destinations. Your options include the Bahamas (beautiful sunsets, amazing blue sea, and gorgeous scenery), Puerto Rico (authentic Caribbean experience), Aruba (big open white sandy beaches), Barbados (lovely reefs), St. John (incredible and breathtaking national park), Jamaica (amazing scenery, plants, and wildlife) and more.
6 essential steps to purchasing property in the Caribbean
The Caribbean property market is very open to Canadians, so follow these five basic steps to make the most of the opportunity.
1. Choose a prime location
Since the Caribbean is a varied region, you'll find an assortment of property markets to choose from. The right location for you depends on a wide range of factors, such as your preferred lifestyle, landscape, amenities, property type and whether foreign investments are welcome.
Learn more about the islands and countries of the Caribbean to determine if you're interested in buying a beachfront home, villa, townhouse, cottage or high-rise condominium in Grand Cayman, the Dominican Republic, Antigua, Belize or other prime locations.
Buying a house in the Caribbean is a glamorous idea, but don't overlook the mundane aspects, such as the resale market, ownership structure, tax laws and other red tape requirements.
2. Calculate the cost of buying property
Home price tags vary from location to location in the Caribbean but generally range anywhere from several thousand dollars to a million or more. The important thing is to consider both the price tag and ongoing costs. For instance, you must consider building maintenance costs for a beachfront home because the salt eats everything. Additional costs typically include utilities, mortgage payments, insurance, and taxes.
3. Secure financing
You can skip this step if you're paying for your Caribbean property upfront. But if you're wondering whether Canadians can get mortgages in the Caribbean, the answer is yes. Several Canadian banks like RBC offer cross-border mortgages for properties in the Caribbean, though you may still have to make a down payment.
You can also secure an international mortgage via traditional or private banking services, depending on your net worth, personal background and financial situation. This option generally requires a larger down payment and is secured against the property.
4. Find a suitable money transfer service
Transferring funds to the Caribbean is one of the most critical steps because it can make or break your budget.
Whether you need to pay a reservation fee, put a down payment or cover real estate agent fees or additional purchase costs, finding a money transfer service with great exchange rates, reasonable transfer fees and speedy processes is essential. International money transfer specialists like MTFX can provide this service, making it economical and convenient to transfer money to the Caribbean.
5. Hire local professionals to help facilitate the purchase
The best thing you can do when buying a Caribbean home as a Canadian is to work with reputable local professionals. First, you'll need to find a local real estate agent familiar with the market to help you locate the right property.
In addition, it's best to find a local attorney to walk you through critical issues, such as costs, country regulations and tax and legal implications. You'll also need to engage a local insurance agent and find a competent property manager to cover property maintenance.
6. How to pay for property purchases in the Caribbean?
The U.S. dollar is the currency of choice for Caribbean property buys, so there’s generally no need to investigate other exchange rate pairs.
Most islands peg their currency to the US dollar and Canadian buyers can easily and quickly calculate the cost of potential purchases in Canadian dollars using the MTFX live rate converter.
Where to find the best exchange rates?
If you need to transfer funds to the Caribbean and make payments in foreign currency, finding the best exchange rates is essential if you want to squeeze every ounce of value from your money. Unfortunately, banks have a culture of offering unfavorable exchange rates and expensive transfer fees that drive up the cost of the property you're buying.
That's why it's better to work with a high-volume foreign exchange provider like MTFX that shares profits and protects you from currency exchange fluctuations. As a result, you can expect bank-beating rates that are 3-5% lower, meaning you can save as much as $25,000 when you purchase a $500,000 townhouse in Barbados. This great deal also comes with turnaround times of 24-48 hours, expert guidance and support, and the ability to automate your payments.
Paying online without going to the bank
Buying remotely in the Caribbean is easier than ever these days for Canadians, thanks to innovative foreign exchange services. For instance, MTFX provides a secure online platform you can access 24/7.
That means you can send money and snap up your dream property without going to the bank or setting foot in the Caribbean. Paying online without going to the bank is one of life's greatest conveniences, especially if you need to make regular automatic online payments to pay for your mortgage and other ongoing costs.
Invest more in your property with MTFX exchange rates
You can send money from Canada to the Caribbean today if you're ready to purchase that luxury villa or oceanfront property overlooking turquoise waters. Whatever you have your eye on, MTFX is dedicated to helping you invest more of your money without worrying about currency conversion losses.
Can I get residency after investing in a Caribbean vacation property?
Yes, you can use your investment as a gateway to obtaining residency. For instance, Antigua & Barbuda, Dominica, Grenada, St Kitts, and St Lucia are all Caribbean countries with citizenship by investment programs³.
Any tips for Canadians looking to buy property in the Caribbean?
It's always a good idea to travel, explore and discover your options before you buy. Investigate the seasonal weather, the infrastructure, your visa requirements, security, tax laws, healthcare, the ex-pat community, etc.
The Caribbean relies on imported products, so costs can add up. This is why specialist affordable foreign exchange services are recommended when importing your money to the Caribbean. For instance, MTFX offers favorable exchange rates when converting your Canadian dollars, so you have local currency in your pocket to ease your budget.
The best tip that covers everything is to research, research and do more research. Get an idea of the prices of property in the Caribbean, run the numbers to see if the investment makes financial sense and check out the property ownership laws or even rental laws to know what you're getting into. In short – make a fully informed investment decision.
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Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.
Please read the following update before logging in to your MTFX online account
We have updated our online dealing system to provide you with better functionality, more unique tools and an overall enhanced client experience. MTFX Online 2.0 is now available for your dealing needs. You can begin using our enhanced online portal today.
Please note that the traditional portal will be available for use until MAY 30th 2021 at which point it will be decommissioned.