Capital Growth and Rental Returns
At the moment property on Margarita Island is still cheap but the large influx of tourism means that soon, finding a cheap Caribbean home on the island will be a thing of the past.
If you are looking to invest in bricks and mortar for capital growth and rental returns then it’s time to consider the exciting new emerging property market of Margarita Island.
If you imagine going back in time to the property prices in Spain 10 years ago (and imagine you could buy then) you will get some idea of the opportunities on Margarita.
Capital Growth
With an average temperature of 30 degrees centigrade Margarita is a year round holiday destination. This exciting emerging market can hardly keep up with the current demand for rentals. This shortage of properties is good news for both investors and those looking to buy a holiday home.
You needn't take our word for it either with Margarita Island's potential continually being featured in the national press both in the UK and abroad. 'A Place in the Sun Magazine' reports:
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Venezuela is coming late to the property party, with capital growth of around ten per cent in 2004-05 doubling to 20 per cent in 2006, at the same time as other Caribbean prices rises were slowing down. More northerly Caribbean destinations seem to have priced themselves out of the market. And while Florida’s property boom has hit the buffers, investors have been looking elsewhere for capital growth and seen this equally beautiful – but in many ways safer – place to put their money on the other side of the Caribbean.
Andy Davies of Your Place Abroad points to the simple buying process, based on Spanish Law, the low property-buying taxes (under £200) and the rental guarantees that companies like this offer. “The local hotels are not very high quality, yet still achieve 70 per cent occupation levels. Our apart-hotel properties can better that because they are built to a higher specification.” While Spanish is
the default language here, many people understand English, which is another advantage.
It isn’t just Isla Margarita that looks good for continued growth. According to The Economist: “Emerging-market indicators show that Venezuela is the fastest-growing country in the world. GDP growth is up 11.2 per cent year on year (2005 figures), and it is the only country in the world that registered a double-digit growth rate.”
Rental Returns
Isla Margarita receives approximately 2,300.000 visitors per annum (up from approximately 1.5 million in 2005 and 2 million in 2006). The Ministry or Tourism wants to make Margarita an international tourist destination and is encouraging the development of 5 Star Resorts with a wide range of facilities.
The new off-plan property resorts will be situated in prime locations thus maximising our clients investment. During peak seasons such as Carnival, Easter, summer and Christmas there are enormous quantities of people who require such properties.
Figures for our Marina Caribe development which operates a resort-wide rental pool indicate that at current average occupancy levels for the island our investors would see a 6% (of the purchase price) per annum return on their investment.
- Occupancy level 50% = 4% return
- Occupancy level 60% = 5% return
- Occupancy level 70% = 6% return*
- Occupancy level 80% = 7% return
* Current island-wide occupancy level
Return On Investment
Below we have included an example of the likely return on your investment over a five year period. This conservative estimate takes into account current capital growth figures on property in the region and 6% per annum rental returns (see above for rental analysis).
| Year | Property Value | Rental Returns |
| Purchase Price | £49,500 | |
| Year 1 (Construction Capital Growth 20%) | £59,400 | |
| Year 2 (Construction Capital Growth 20%) | £71,280 | |
| Year 3 (Capital Growth 15%, 6% Rental) | £81,972 | £2,970 |
| Year 4 (Capital Growth 15%, 6% Rental) | £94,268 | £3,267* |
| Year 5 (Capital Growth 15%, 6% Rental) | £108,408 | £3,594* |
| Totals After 5 Years | £58,908 ROI | £9,831 |
Figures based on current trends and are no guarantee of actual returns
* 10% annual growth added
Now is the time to “get in early” and take advantage of buying off-plan - directly from the developer. With new projects about to be released clients can now purchase fully furnished off-plan 5 Star Apartments from around £49,000 or Villas from £69,950.
Click here to go through to our Margarita property pages. The search for your dream home in the Caribbean starts here!