Buying vs. Renting Real Estate
There are many Barbados properties available to buy or rent and this guide will show you how to decide which option is best for you. We have outlined both the benefits of purchasing property in Barbados and also the benefits of long-term rentals.
If you never visited Barbados before, but for whatever reason are now looking at the island either as an investment or as somewhere to relocate to. We recommend you visit the island and rent a short-term apartment or house so you can get a feel for life on the island of Barbados.
The island is 21 miles long by 13 miles across and wherever you decide to stay you can get around easily enough viewing Barbados property and deciding where you would like to make your long-term commitment.
If you have been to Barbados you may already have an idea about the location of your desired property. Maybe you are coming to Barbados for work, in which case you may only be on a short-term contract and may have your company paying for your accommodation.
If you are visiting alone or with your partner you may like to rent an apartment or condominium that has a communal swimming pool allowing you to make the most of the weather on your days off.
If you are bringing your family you may find a house with a garden more comfortable for the children. If you are with your family then chances are your working contract will not be short-term and would be looking for a house on a long-term lease – these are usually for a minimum of one year.
People often decide to rent when they are first relocating to Barbados as this gives them the chance to get to know the island and where they would like to live permanently.
Another reason for people choosing to rent property as opposed to buying in Barbados is the interest rate from Barbadian banks and lenders is high compared to the UK and the US at around 8.25% at the time of writing (September 08). This means long-term rental prices are typically about 50% of what the mortgage payment would be on the same type of property; therefore this is an easier option for young couples and young families.
However, renting is not a permanent solution, and is not an investment in property ownership, but in the short term it can make your life easier.
If you are planning on making Barbados your permanent home it is often a wise financial decision to buy property in the long run for investment purposes. Even though your outgoings are higher at least the property will be yours in time and is usually a good investment of your money.
Perhaps you are thinking of buying a second home in Barbados and have your main residence in another country. You would be advised to seek financing in your country of residence, as the interest rate will typically be lower and much easier to obtain funding.
However, Barbadian banks and lenders are willing to offer mortgages to non-nationals for purchasing land or property in Barbados, it entails additional paper work and a higher interest rate. You will need to have money going into a local bank account each month to cover the mortgage payment.
If you are paying for your property without the aid of a mortgage, you will need to register your funds with the Central Bank of Barbados when bringing your funds into the country. If and when the time comes to sell the property you will be allowed to take the money from the property sale out of the country.
Please read our section on Barbados Real Estate laws for more information.