Put simply, buying a condo on Seven Mile Beach is a great investment! But I would like to delve a little deeper as to why buying property along this highly sought-after stretch of real estate is a smart move.
When people first come to Cayman and start looking for a property they generally have certain criteria to fulfil. Generally, they are looking for a home away from home in which they can build memories with their families. They have nearly always visited the Cayman Islands before, anywhere from three to five or more previous visits. They have found Cayman to be a friendly place, the service levels are comparable with what they have come to expect at home, the views along Seven Mile are particularly beautiful, all of which adds up to reassure the buyer that they have indeed found their home away from home.
Seasoned visitors will also have realised that the Cayman Islands is a uniquely attractive location because it is so convenient to visit from many major hubs in the United States via direct flights, and even the UK, with a frequent direct flight to London. Cayman also enjoys a diverse economic base that means the islands are not solely based on tourism, plus property ownership laws that are very conducive to foreign ownership.
Crime is also low when compared to our competitors – the easiest way I know to illustrate how safe we feel here is when I ask prospective buyers how they feel about walking about at night. They often say they feel safer walking around in Cayman than they do at home!
Buying condo from an investment perspective
So, why do people look specifically at Seven Mile Beach? In my experience, people looking to invest in the Cayman Islands tend to be the income providers within the family, those for whom a few weeks’ vacations each year is a precious thing. This means they will be guided in their buying choice by where they themselves would like to spend time each year, which is completely understandable.
What suits one person may quite likely suit another as well, with attractive features such as a well-maintained property that has been newly furnished and updated particularly appealing for many people in this sector of the market. The Seven Mile Beach corridor has thereby become an incredibly popular draw for overseas buyers, especially in recent years.
In addition, the return on investment from renting out properties, like a condo, along Seven Mile Beach has been an obvious important draw for would-be investments. I am pleased to say that investors can expect anything from marginal returns to up to 4 per cent, depending on the age of the property and when it was purchased. Capital appreciation is also another obvious critical factor. It should be noted that there is only a one-time tax to be paid on a property in the Cayman Islands, in the form of 7.5 per cent stamp duty to be paid on the purchase value.
You should keep in mind that the longer you own your property, the longer time you have to spread out this one-off cost for a return perspective. Unlike most countries, there is no annual property tax to be paid, which can seriously impact on an owner’s return over the long term.
In closing, one of the most important components of any investment in property is the preservation of capital. I can say that the Cayman Islands has provided real estate investors with this over the short and long term as, even in our worst hours, we have never had the sort of impact on our real estate industry that others have had even the bug first world countries. As such, our jurisdiction is extremely conducive to such an investment over the long haul.
I would love to hear from you if there are any points of interest as they relate to Cayman’s condo industry that you would like me to discuss in future articles, or if there are any questions you would like me to answer. Email: James.Bovell@bovell.ky