Tag: property advice

Maximize your vacation rental property income.

Outside of a pandemic, the demand for short term vacation rentals in Cayman is more than steady. As a coveted travel destination, second home investment properties in Cayman, provide consistent healthy profits for owners – often generating returns in excess of 10%.

The current landscape has undoubtedly disrupted the playing field. While tourists may be dreaming of our white sandy beaches more than ever, travel restrictions and our border closures mean those visits will, unfortunately, have to wait.

Recapping COVID-19’s impact on the Cayman rental market

At the onset of the lockdown period, we were inundated with calls and emails from anxious vacation rental property owners. To counter the closed borders and lack of tourism, we strongly suggested that these property owners switch from short term rentals (nightly or weekly) to long term rentals (six to twelve months). This strategy proved effective at attracting local renters, jumping at the chance to live on the beach at discounted rates. And although the return on investment would be less than the previous year, it prevented landlords being stuck with vacant properties.

Other property owners with more remote East End, Northside, and Cayman Kai locations, have reduced their nightly rates and offered specials to encourage local vacations. With residents unable to travel overseas, this has spurred Cayman’s very own ‘Staycation Nation’. A trend which continues as residents seize the opportunity for a change of scenery, at a discount. We know we are!

The end result? The COVID-19 pandemic caused the average price of rentals in Cayman to drop. This drop is a short-term response. We foresee a rental market rebound once Cayman’s borders reopen and we start welcoming tourists back.

Tourist High Season

In March and April, when property owners first made the decision to offer longer-term rentals and reduced rates, they were holding out hope for tourism to return in time for high season. The winter months, November through to April, when you can’t find a spot on the beach, let alone a vacation rental in Cayman.

Fast forward to today, we are now approaching the middle of October, and the borders fully reopening before the new year is looking less and less likely. The last few government press releases have made it clear that the risk tolerance, when it comes to potentially exposing the island to the virus from inbound travel, is minimal.

If you couple that with the end of the mortgage holiday, offered by the banks, it’s now time for investment property owners to employ a more long-term solution.

Cayman’s Global Citizen Program

The Cayman Islands government has announced they will start what is commonly referred to as a digital nomad visa. A visa specifically designed to attract employed individuals to the island. Bermuda, Barbados, and Antigua have already introduced initiatives similar to what the government is calling Cayman’s Global Citizen Program. The goal is to entice entrepreneurs and other professionals who can work remotely, to set up office on our beautiful shores. These digital nomads would provide an inject of money into the economy, without affecting the local job market.

Positive news for the rental market

After the rental market dip early this year, the Global Citizen Visa Program is definitely a win for Cayman landlords. The demand for long-term rental properties is going to increase, as more working professionals swap their home office for a temporary beach view. This will drive rental prices back up and make second-home, income properties more valuable.

Our advice: Minimize your risk

If property owners continue to hedge their bets on the return of tourism in time for the winter refuge from the north, they may be left disappointed with empty apartments and pockets.

Rather than rolling the dice, owners should consider listing their apartments in the long-term rental pool. This way, they can attract a digital nomad looking to live the beachfront dream while they work remotely in Cayman.

Yes, the monthly rental income generated will be a reduction from last year, but when amortized across the lifetime that you hold the property, it is relatively insignificant. And some money earned is always better than none.

If you have questions about renting your property long term, please feel free to contact us.

How to choose a real estate agent?

Let’s call it how it is. Real estate agents don’t have the best of reputations.  We get it.

Unfortunately, like any profession, a few bad apples can ruin it for the bunch.

Such a big life decision, buying or selling your home, deserves to be met with professionalism and integrity.

We care about you, and because we care we’ve compiled a quick checklist to ensure that you get the best possible representation, wherever you are on your property journey.

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Your Realtor Checklist

Whether you are a first-time buyer or an experienced investor, your Cayman realtor should have:

1.      Real Estate Expertise

The property market, particularly right now, is fast-moving. To effectively meet your real estate needs, you need an agent:

  • well versed in the local Cayman property market
  • who understands the financial requirements for purchasing a property in Cayman
  • knows the Cayman stamp duty tax rules and exemptions
  • able to interpret strata regulations and bylaws
  • who is comfortable overseeing the complete property transaction (including contracts, due diligence screening, market analysis reports, disclosures, and other legal documents – effectively managing any roadblocks to ensure a seamless experience for you)
  • who cares about you! Above anything else, choose an agent that has your best intentions at heart.
2.      Objective Real Estate Information

Your agent should easily be able to provide accurate and up to date information on re-locations, utilities, the rental market, zoning, schools, and more. They have objective stats about each property, data that should be shared with you so you can decide how to move forward with listing your home or placing a purchase offer.

3.      CIREBA Qualifications

Real estate laws, regulations, and processes are intricate. You want a realtor who knows the ethical and legal requirements of buying and selling property inside and out. All members of the Cayman Islands Real Estate Brokers Association (CIREBA) must complete specific training and testing to demonstrate their understanding of real estate law, contract law, and their duties as an agent. CIREBA also has a strict code of ethics that all members must adhere to. So by selecting an agent who is CIREBA member, you can rest easy knowing you have a qualified professional in your corner.

4.      Trusted and Candid Real Estate Advice

Life can throw us some unexpected curveballs. It is essential that during these times, you have a trusted and experienced professional that you can lean on. Someone who will tell you exactly how it is and the best way for you to navigate your way out the storm.

“We were about to close on a Seven Mile Beach condo, and then COVID struck. Our household income, like many others, took a hit. And like the rest of the world, we felt uncertain about the economy and the property market. So to say we were stressed about our pending property purchase, was an understatement. I reached out to Jude for advice. We discussed the situation, weighing all the possible scenarios, and ultimately ended up pulling our offer. The feeling of relief was instantaneous. It was the right decision for us, and we can’t thank Jude enough for her honest advice. She put our happiness and security above everything.” – Dr Derek Spence, Property Cayman Client

5.      Real Estate Negotiations Skills

In the property business, there are many elements, unique to each sale, that are up for discussion. You deserve to feel well informed and confident throughout the negotiation process. An experienced realtor should provide helpful insights and knowledgeable advice. They should safeguard your needs throughout the entire property journey.  With the right agent, there should be zero doubt that they have your best interest at heart. Remember, the highest offer isn’t always the best offer.

6.      Professional Networks

Property transactions are complex. There are a lot of cooks in the kitchen – buyers, sellers, agents, attorneys, inspectors, lenders, and often financial or investment advisors. An established, well-connected agent can provide their customers and clients access to an instant network of qualified and trustworthy professionals.

7.      Real Estate Marketing

Believe it or not, houses do not sell themselves. Your real estate agent’s marketing strategy is absolutely critical. How your property is listed and promoted will directly influence the number of buyers walking through your door, and the quality of the offers you receive.

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In a nutshell, a good agent can efficiently manage all the intricacies of the real estate transaction process, protecting their client’s interests and minimizing their hassle.

It is about the client, not the sale.

The business of real estate is about relationships.

We provide candid advice, helping clients avoid costly pitfalls, allowing them to minimize the headaches of selling while maximizing their profits.

Thinking about buying or selling? We’d love to chat.

The Market Moves In Mysterious Ways

A completely reasonable and fair assumption dictates that during an unusually slow summer season, closed borders, zero tourists, and a reduced population count all resulting from a world pandemic we should expect ZERO sales right!? Well, when a market moves against all expectations it’s worth looking a little closer.

We have reviewed the Association movements between June and July 2020 (the new dawn) how it differed from July last year (the old world) and finally we also reviewed what we are seeing in August so far and what the latter part of the year will look like.

 

June 2020 Vs July 2020

40% up in Condo sales
150% up in House sales
25% down Land sales – but watch out got lots of August activity.
No change in commercial sales

 

July 2019 (old world) Vs July 2020 (the new dawn)

52% down in Condo sales
44% down in House sales
65% down in Land sales
66% down in Commercial sales


Property Cayman had 9 transaction sides in July 2019 Vs  4 in July 2020 – 44% decline. However that’s 4 more than we were expecting.


Observation:
This decrease is expected however it isn’t what you could have expected with a pandemic underway. Also note it’s only a temporary shift. Despite internal and external pressures, transactions and demand are still very clear and present. This level of activity is returning with gusto which is a direct testament to local confidence. Many are seeing the opportunity to lock in (with the help of pension withdrawals in many cases) a new home or long term investment before the borders open and population with demand increases again.

With a steady incline of new listings, new contracts and a decline of the Back on Market listings, the August/Sept/Oct pipelines are filling up nicely. 

Source: CIREBA

August 2019 (old world) Vs August 2020 (new dawn)

24 Condo sales last August and 8 sales so far this August10 House sales last August and 1 sale so far this August32 Land sales last August and 3 sales so far this August0 Commercial sales last August and none this August… so far


Property Cayman had 10 transaction sides in August 2019 Vs 14 lined up to close this August 2020 (pipeline contracts) – 40% up and we have 3 weeks to go! Watch this space.


Observation:
Another summer season with record number of transactions? Despite a reduced July (year on year) there’s a surge of activity to rebuild the pre-covid momentum. It says a lot. Local demand and confidence is holding its ground and we can expect some good catch up this month.

August and beyond

With borders closed and pension withdrawals slowing down in the latter months of the year we can expect to see a decline in properties going to contract and a consequential increase in inventory (lowered demand with increased supply). We feel however that things won’t slow down and that when borders open up we can safely forecast new and positive influences on the market.

With open borders the market will quickly absorb any oversupply of inventory. With extended border closure into November we can expect pricing pressures to take effect but in reality it will be more of a stabilizing effect than a significant decrease in pricing.

Either way, whilst numbers are averaged down by 50%, most sectors of the market won’t see any significant decreases in pricing as seller’s continue to be patient. Markets ebb and flow over time so be sure to establish your big-picture property plan and consider the different chapters of YOUR journey. If you wait for a market to change to your advantage you will miss out on the opportunities currently in front of you.

This analysis is broad and general and more designed to spark the conversation. We would be delighted, as always, to assist you along your personalized property journey so feel free to reach out and let us know your thoughts, ideas and even concerns. We can cut through the noise and give confidence to your next move which every direction that might take you.

NB: ref: CIREBA stats

Your safety: Our priority

The impact of Covid-19 on our industry has been unprecedented. Showing properties, which has always been core to what we do, was no longer. 

Fortunately, 90% of what we do, can be done online. We have adapted to the current reality and continue to actively offer guidance remotely and online, keeping you apprised of trends, changes and projections in the Cayman Real Estate market.

As of Monday 8th June, with Government approval and strict safety measures in place, our office is back open and we are able to show properties again. We are definitely not ‘back to normal’ but welcome you all to the new normal…😷

Scroll down for new showing protocols and FAQ ⬇

Image: “The New Normal”-
Your Property Cayman team + Pablo 🐕

Update 17th July 2020: Property showings are in full swing and all properties are able to be viewed safely. Whilst restrictions have eased, we are still taking safety precautions- wearing masks, social distancing and sanitizing. Prospective buyers and sellers are no longer required to complete contact tracing forms.

Property Showing Protocols –Prospective Buyers

  • Property Access and Contact Tracing Forms to be completed and signed by every Prospective Buyer.
  • Maximum of 2 adults persons named on the PACT form shall be present at the property along with the agents.
  • Prospective Buyers will be required to meet the agent at the property and will not be driven to the property by the agent and must remain in their vehicle until called to enter the property by the Agent.
  • Everyone will wear a protective face mask(s) before entering the property.
  • Everyone will maintain 6 feet distancing at all times.
  • The viewing is contactless, and will not touch anything whilst in the property.
  • Everyone will sanitize their hands with hand sanitizer upon arrival to and departure from the property.
  • Neither the agent, nor the buyers will use the washroom facilities during access.
  • If prospective buyers should develop symptoms of the COVID‐19 virus, or are later diagnosed as having the COVID‐19 virus, they will contact the CIREBA agent immediately, so that the agent may follow the necessary procedures which could require testing and quarantine, to protect any parties that may be involved.

Property Showing Protocols –Sellers/Occupiers

  • Wherever possible, we will ask that properties are vacated for the duration of the showing.
  • If properties cannot be vacated, occupiers must stay 6 feet from the agent and Prospective Buyers at all times. The best way to achieve this is by staying in one designated room for the duration of the showing, then leaving that room when they need to view it.
  • Properties where someone is shielding, self-isolating, or has any symptoms associated with coronavirus (a fever, a new & persistent cough or flu-like symptoms) will not be shown.
  • We ask that occupiers leave all internal doors open, to minimise the need to touch any surfaces.
  • If the property is vacant the Agent is to disinfect the lockbox, all doorknobs, surfaces, light switches and counters with antibacterial/germ killing cleaners after Prospective Buyers have left.
  • A record will be kept containing the names of those who have visited the property.
Image: Property Cayman Agent Safety Kits

FAQ

I am interested in buying or renting a property, am I able to view it? 

Short answer yes, long answer below.

Viewings are only permitted on your corresponding day based on your surname. A-K being Mondays, Wednesdays and Fridays and L-Z on Tuesdays, Thursdays, and Saturdays.

We also strongly encourage prospective buyers to exhaust all digital and virtual options before scheduling a viewing. There are lots of steps to buying a property, and most of these can and should be thought about before ever stepping foot in a property. Click here for a helpful list of considerations and questions that will help get you started. 

What steps must I take before viewing a property?

Contact your agent for the required forms to be signed prior to any viewing.

You must not be showing any flu like symptoms. If in doubt, stay home and reschedule the viewing for a later date. 

You will be required to find your own means for transport to the property, wear a mask and disinfect your hands prior to entering the property.

I would like to sell my property. Can I work with an agent in the current climate?

Yes. Our agents are able to meet via phone, video or in person to discuss the listing process. All documents required can be submitted digitally.

The majority of our industry has exemptions to operate so we are also able to get professional photos, videos and virtual tours done, in order to showcase your property in the best way possible. 

My house has been listed for sale/rent and I am worried about having potential buyers/tenants coming through. How do I handle the situation?

Your safety is our priority. In adherence to the Public Health Law we have implemented strict safety measures for all property showings. See details above.

We also offer virtual tours as an alternative to in person showings. The virtual tour will only require one person to enter your home to shoot the content which will then be made available to any prospective buyers or tenants. Reach out to your agent if you would like to schedule a virtual tour.

Is your office at 51 Fort Street open?

For the next few weeks, our office hours will be Monday – Friday from 9:00 AM to 4:00 PM. The reception door will be locked in order to control the flow of traffic in the building so please try and call ahead.

Our preference will be to schedule meetings in an open environment outside of the company’s premises.

If a meeting has been scheduled within our office,  we ask that proper hygiene and safety precautions have taken place prior to entering, masks or face coverings must be worn and social distancing must be respected.

Amidst uncertainty, we do know that this too shall pass. It may be weeks, it may be months, however, if we remain proactive to these changes, it will never be years. And know this — We are strong and able to overcome these challenges as any nation on earth.

As a final word, we say in unison, thank you, to our exceptional medical community, to those who wake up every day with the mission to be a helping hand, the people who are risking their health in providing essential services, and our political leaders at all levels, who are working tirelessly to keep us safe.  The Cayman Islands owe you all our endless gratitude.

Insider’s Guide To Building Your Own Home

Author: Kate Ryley

‘Some buyers don’t even think about buying land or building their own home – they just assume it’s out of their league or out of their means. But all options are worth exploring and that’s why we’re here 🙂 I’ve been there personally, where I’ve been stuck with buying land vs. buying an existing home, and it can all feel extremely overwhelming. I took out a scrap piece of paper and started jotting down the pros and cons, and it really helped me wrap my head around it all. I figured if it helped me, it would be worthwhile to share my thoughts with our potential customers too!’ – Kate 

Pros to building a house: 

Competition:  When you build a home, the competition factor decreases. If you find yourself in a Seller’s market, there is lower inventory. This, combined with more Buyer’s in the market makes it harder to win that home of your dreams! 

Customization: When building, you’ll get to personalize all the details of your house when you construct from the ground up! This is one of the biggest advantages – from architecture to design to furnishings, you control it all.  

Satisfaction: It’s not easy work, so when you’ve completed your home it feels good! It’s an accomplishment in and of itself, and people say there is a feeling of an emotional connection living in a new home that you have created. 

Cons to building a house:  

Time/ Bridging: It takes an average of about 12 months to construct a new build. That time matters if you are relying on the sale of your previous home in order to pay for construction. Keep in mind that you may have to live in a rental until your build is complete (we all know how much we love moving! 😉 ) 

Variable costs /un-expected expenses: Compared to buying an existing home, the costs associated with the purchase and build are not always clear from the start. Expect out-of-pocket costs that are unplanned.  

Stress: Building a home requires patience. It’s not an easy feat! There will undoubtably be hurdles that will take you on an emotional roller coaster.  

Pros to buying a house: 

Convenience: We can simplify the process by helping you find verified properties, guide you through negotiations and assist you with deal paperwork and lawyers. You will be able to close on the property and move in as soon as possible, generally within 60-90 days. 

Turn-key: The fast rate at which you pay for a house and when you move in is incredibly exciting. Plus, you know exactly what you have purchased. You have touched it and felt it – you know what you are getting! 

Costs: The costs associated with buying an existing home are more fixed than variable. This makes it much easier to budget and balance your personal financial requirements. 

Appreciation: The nice thing about existing homes is that there’s history: You can research the home’s previous sale prices, as well as prices of similar homes in the area (known as comparables) to get a feel for whether prices are rising or falling in your area. If the prices for your home and others in the area have been steadily rising, odds are decent that the trend will continue, which bodes well for you if you decide to sell later on. 

Cons to buying a house  

Perfect” may not exist!  You may not get exactly what you want, and you’ll have to forgo one of your checked boxes. You’ll have to prioritize what matters to you most, and stick to those when looking for a home. It is unlikely you’ll get absolutely everything – floorplans, architecture, kitchen design, flooring, ceiling heights, finishes to name a few! 

Appreciation: New homes, particularly in up-and-coming neighbourhoods, are more of a gamble. Without a proven track record of lots of comps, there just aren’t enough data points to really know what could happen down the line. This is also true for all the latest amenities you might request in your home (think self-cleaning toilets). Are you going to see this return in upgrades down the road? 

Efficiency: Existing homes are less efficient and may need various replacements such as windows, doors or heating/cooling systems. Replacements and updates may be our of your budget after purchasing your new home.