Why buy a SMB condo?
Cayman’s status as a British Overseas Territory with its stable, pro-business government is a huge draw for investors based overseas. A home away from home, Cayman offers the first world infrastructure you have come to expect in North America or Europe, coupled with friendly local people who are happy to welcome you to their shores, along with amenities that are on a par with the top cities of the world, such as first class dining and bars, brand named stores, excellent well-stocked supermarkets and five star accommodation. Yet we also have the added benefit of almost year-round sunshine, a tropical climate that offers you heat when it’s snowing up north and one of the best beaches and diving locations in the world. It’s a heady combination that few can resist.
The Cayman Islands is also a first class holiday destination for families, offering safe, warm waters, no rip tides or dangerous currents and freedom from harassment on our beaches. Indeed, visitors can expect to enjoy the entire island free from harassment from peddlers, etc. Free from paparazzi, Cayman also makes the perfect getaway destination for the rich and famous, eager to leave their frantic lives behind them and enjoy a peaceful vacation.
Two tiers of investors
It’s interesting that as new buyers from overseas make contact with me they generally (initially, at least) fall into one of two categories. They are either a ‘getaway’ investor who seeks to purchase an additional home in Cayman to broaden their asset base, while at the same time looking to purchase a property that their entire family can enjoy as a holiday home. They tend to have visited Cayman before and fallen in love with all that it has to offer, familiar enough with the island that they are ready to make the next step and call it home, at least for part of the year. Once they begin to look around for their holiday home they also tend to increase their budget somewhat, once they realise the level of luxury available to them if they look to the next tier of investment.
The second type of buyer is a ‘strictly business’ investor who contacts me saying they are purely interested in buying a property with the intent of making money on their investment. But at the end of the day I would estimate that around just one or two in ten of the ‘strictly business’ investors remain in that category once they have visited the island. The minute they see for themselves the properties that I am able to show them, in particular some of the luxurious condos on Cayman’s famed Seven Mile Beach, they immediately start to envisage themselves in the property. Typically their own personal desires take over and the property selections then move to ones that meet their family preferences and level comfort that they want when on vacation. 8 out of 10 cross the line into the ‘getaway’ investor category, purchasing an investment that can be a beautiful base which the entire family can congregate once or twice a year and enjoy some real ‘family’ time.
So, why buy a Seven Mile Beach condo?
Although it’s called Seven Mile Beach the area is actually only a 5.5 mile long stretch of exquisite sand and sea, along which 44 condominium properties have been developed. Although some of these properties will be redeveloped over time, there is still currently limited capacity for ownership. Once you have purchased your condo, you will be pleased to learn that annual revenue derived from your investment can be excellent. If the condo property has a well-managed rental system, this can spin off a very nice income which can be used to offset costs of running and maintaining a property annually. And while this income may not completely cover mortgage payments, it may go some way to offsetting this cost as well. It is also very comforting to know that you can visit your vacation property, walk out, shut the door and hop on a plane, knowing that the property will be properly managed in your absence. This peace of mind offered by on-island and often on-site management of Seven Mile Beach properties only adds to the value of the investment in a SMB condo. Savvy buyers will also seek tax advice as to the advantages of owning a Cayman Islands property, which vary by country of origin.
For residents, investing in a Seven Mile Beach property also means you will have the benefit of complete flexibility. Should one need to leave the island, these properties can be easily and quickly put into a rental system for vacation rentals or can be rented long term, off -setting costs and generating a net return until the property is either sold or the decision is made to use it as a ‘getaway’ investor. This gives one the peace of mind that their property will be managed in their absence, while still being a stream of income.