Is the island a good place to invest in property?
Knowing which places are ripe for property development is sometimes difficult to get to grips with, particularly if it’s in a country like Turks and Caicos that you might not be too familiar with. You’ll see on the internet lots of real estate reports from the island talking about high returns etc, whilst this is true to a greater extent, agents may paint the island with positivity regardless of the market conditions. Due to the close location of the island near to the US, our market and currency is tied very much to what happens in the states. However, the island has been on an upward trend since the 80’s, with particular progress prior to the 2008 recession and up to the corona outbreak. There is still a lot of virgin land available to buy and many of the islands have been barely touched, so many opportunities exist for investor who can wait for value to increase as the islands beauty continues to be marketed around the world. If you are interested in what’s availalble on island, be sure to check out the TCI REA website
Any notable risks to investing
As with a lot of caribbean islands, there are some querks to investing in the island. Generally the island enjoys a devolved democracy stemming from it’s UK association. The island is self-governed, but maintains checks and balances with the UK. I’d say the government aren’t too unpredictable and know all too well the islands reliability on tourism for income, so they are never going to risk playing politics with that sector. Other than the government, security/crime is an increasing threat as the murder rate climbs each year. The police have doubled their stance against crime in response, and have just established an armed gun unit to deal with these criminals. In summary, the island is worse than it’s ever been for crime, but compared to some other caribbean islands, it’s still generally peaceful and the police are doing something about it now.
Government taxes on Air Bnb
If you are thinking of doing air bnb with your investment then you are now liable for the same tourist tax that hotels are. Make sure you build this into your variable costs when doing your sums.
Construction Methods
If you are thinking modular then you might have to think again, the government are very against ‘container homes’. It doesn’t mean however, you can’t build modular if you have a unit prefabricated in a container that slots out. Modular could work perfectly well on island, we have experience in London working on such projects. Fully finished containers are liable to import tax – so be aware. Implementing novel construction methods on island can be achieved, however the contractors tend to have a pretty traditional block and mortar approach to construction due to the lack of skilled labour. Often with property development, you have to weight up Architectural impact vs buildability to create a striking building that demands a decent price tag. Unusual buildings can be done, but just be prepared to fly in specialists to help them out the contractor. James Hamilton Architects have completed some more unusual buildings including La Cabanon. We enjoy a new challenge! The tourist website actually have an article written about the types of construction you can do if you want to read further.
What sectors are in demand?
Commercial space, and middle income housing is in very short supply. Doing well in property development in Turks and Caicos contrary to what you might have heard, could be in markets other than prime luxury. Partly due to the luxury perception of the island enticing high-end developers to build for the market they know well. There is a poor choice of middle income housing for the general working population. The golf course is one of the few places that caters to his market. Be sure to contact an agent if you have an interest at building an income property. Check out the link to a list of agents on the tourism board website. Tourism board real estate agents
Written by Tom Greenfield, Director – James Hamilton Architects
