The Problem With “Cheap Real Estate”
Many people that visit the Caribbean think everything is cheap, which is a major misconception. Many things are cheap, but not everything. Just because something it is cheap doesn’t mean it is good quality. Sure you can find some cheap food that tastes great but when you start dealing with bigger, more expensive things then you don’t necessarily want to go the cheap route. Quality is much more important.
We all want a good quality home, not a cheap home that we have to spent time repairing on a regular basis.
Buying cheap real estate isn’t the best option for you.
Many foreigners are so eager to move to another country and purchase property there that they aren’t thinking clearly about all the factors that go into selecting, vetting and purchasing real estate.
Yes there are homes you can find in the $10,000 to $20,000 USD range, but they are in areas that you don’t want to live and most likely aren’t very livable structures themselves. In the US and other developed countries we are used to having certain things in a home such as carpet, hardwood floors, nice cabinets, etc…and many of these cheap home don’t have those things. They come with concrete floors and storage space under the sink for your dishes, maybe a couple of shelves to store dishes on.
Also many lack any appliances at all or only have old and extremely used appliances. Maybe of these cheap home lack a stove or oven. Many just have a portable electric stove top which isn’t conducive to cooking for an entire family. Especially when these portable electric stove tops only feature 1 or 2 burners, that’s when cooking can become difficult.
One of the many problems with cheap real estate is that it’s often in remote locations. This can be a problem for people who want to live near attractions or other things they enjoy. It also means that they may have to deal with bad infrastructure and lack of public transportation.
There are many reasons why people buy cheap real estate. Some people buy it because they are looking for a place to live and not a place to invest. Others buy it because they are on the lookout for an investment opportunity.
The problem with cheap real estate is that you can’t find anything good in it, which means that you will have to spend more money fixing up the property or building something new on top of it. You may also have to deal with remote location, bad infrastructure, not near attractions, etc. Not all countries have an MLS or even require home inspections. Skipping the home inspection can be an unwise decision, which causes you to spend more money and time fixing all the issues with the property.
Buying quality real estate has its own set of benefits. It is possible that there are some good deals out there and you can get something at a relatively low price but in good condition. You also don’t have to worry about remote location and bad infrastructure.
Our ‘Resources’ page is a great place to find a real estate lawyer, lender or custom home builder.
Location Location Location
Cheap real estate usually isn’t in the best areas of the city or that particular country. These areas usually have faulty infrastructure, unpaved roads and poor internet connection just to name a few. You can forget about finding tenants to rent your home, it’s not going to be attractive option for them.
Road signs will also be missing, then on top of inconsistent internet service let’s be real, Google Maps isn’t always accurate 100% of the time, which makes find some rural places more difficult. You don’t want a cheap house on the outskirts of the city suffering from poor infrastructure and more prone to crime.
If it’s a cheap piece of real estate you will most likely need to rent a car to get to it. Probably won’t have grocery store near, harder to find supplies for the house, harder for people to get to, like the repairman. Because you bought a cheap property not in a good location you spend a lot of time travelling to and from the grocery store, beach, mall, etc…which allows you to spend less time at home (less leisure time for you).
That nice country home 2 hours from any major city might be a good place to escape to on the weekend, but not really a viable place to build rental income.
There isn’t any ROI in cheap real estate.
The lawyers aren’t cheap. Bilingual lawyers from established firms usually charge a higher premium than other firms. You are going to need a lawyer to help you verify all the documents concerning the property, some rural properties might not have all the proper documentation. Record keeping concerning some properties might not be up to date which causes more problems in the purchasing process.
Having a bilingual lawyer in a foreign country that has helped foreigners purchase real estate is a plus. They will be ablet o keep you up to date on all the new regulations concerning real estate and help you avoid wasting money on real estate in bad locations.
You are going to be paying for lawyers, might as well pay for good quality, bilingual lawyers.
Home insurance is common in some countries, others not so much.
Overall, if you desire to purchase cheap real estate thinking it is going to be a smart investment in the future, it most likely won’t and will turn into a waste of your time and resources.
Very few times has it played out well for someone to buy cheap real estate, 25 years ago on the beach in Punta Cana would have been a great time to take part in purchasing cheap real estate which you now could turn into serious profit, but for the most part those days are over.
Cheap real estate is a problem, quality real estate is the solution.
A place that is built correctly with quality furnishings in a good location with amenities in the surrounding area is your smartest investment.
Be sure you check out our blog to find out more tips when it comes to purchasing Caribbean real estate. If you ever have any questions concerning purchasing Caribbean real estate then feel free to shoot us an email on our Contact page.