Diving into homeownership
Today, ICONIC LIVING is focussing on all things real estate, host Natalia Oh and a group of industry experts explore the process towards home ownership in Jamaica and the unique challenges that lie therein. Programme guests in this episode are PROVEN REIT’s CEO Aisha Campbell, TaylorLaw, managing partner Robert Taylor, and Lead Lending managing director Karla Henry.
Affordability & Integrity
Campbell, who boasts over 15 years’ experience as a civil engineer, real-estate developer and project manager kicked off the segment by offering advice on what future homeowners need to consider when looking to buy for the first time or to diversify their real-estate portfolio. Affordability, she believes, should be at the top of the list, then take everything else into consideration following that.
After affordability comes location. “Location is everything in real estate; also, the amenities you want to have included, and the purpose for buying the property.”
Other factors that topped the list included full disclosure and trustworthiness. Henry, who through her company Lead Lending manages brokering for six banks in Jamaica, explained that being forthright with your broker is critical in the process of connecting you with the right bank as it helps them to better advise you to get the best loan arrangement possible.
She also warned of the risks and consequences associated with not being transparent with your broker noting. “If you hide anything and we discover it in the middle of the transaction, it would derail the whole process. You could probably even lose your deposit because you were not truthful with the info that was required from the prequalification stage.”
The process of becoming a homeowner may seem very daunting, especially for first-time buyers. However, the process may be broken down into three basic steps:
- Identifying the desired property.
- Gathering a team of reputable professionals to help guide you through the process.
The team should consist of a mortgage broker, lawyer, and realtor. Robert Taylor offered further details nothing that “Once that prospective purchaser signs an offer to purchase, we’re looking at about 2-3 weeks for us to review the terms of the contract, have them sign and pay their deposit.”
Covering Your Bases
With interest rates in Jamaica at their lowest point in 40 years, now is a perfect time to invest in real estate. However, prospective buyers must ensure that no important details get overlooked.
When asked about investment advice for young entrepreneurs and how they can cover their bases when investing in property, Henry shared that it’s best that a business’s fund runs through a bank account to prove legitimacy.
How long your business is in operation for also plays a role in forming a reputable profile for banks. “You have to be in business for at least two years so they can see your history of earnings. You have that information ready in the form of a financial document.”
Discussing resources that entrepreneurs can use to further their financial standing, Campbell encouraged them to contribute to the national housing trust. “You can get a maximum of $5.5 million and if two people join together you can get $11 million, offering a range of rates starting as low as 6%.”
Spike in Real Estate Demand
In guiding viewers along the path of wealth creation, the guests shared their views on the current boom in real estate demand in Jamaica. One factor fuelling a lot of that demand for real estate in Jamaica is the advent of the Airbnb business. Taylor explained that another factor is the historically low mortgage rates being enjoyed by borrowers.
“A lot of liquidity has been moving, not just from private individuals but pension funds. Banks have been moving their investor’s capital into real estate which has caused this upsurge in real estate demands.”
Campbell also chimed in, giving her reassurance that this is, in fact, the best time to invest in real estate. “Real Estate in Jamaica is appreciating, you know your investment is solid. I encourage especially millennials, you will see the benefit in the near future, if not today.”
3 Quick Tips for New Home Buyers:
- Every mikkle mek a mukkle – Start putting aside money for your new home early.
- Study. Study. Study – Do your research, find the type of home and location you prefer as well as a mortgage broker you can trust.
- Hit pause – Stop any unnecessary spending and get your finances in order.