By Dennise Williams, Staff ReporterREAL ESTATE experts reveal that over $14 billion exited Jamaica's shores in 2003 to purchase pro-perties in the United States, with the state of Florida being the locale of choice.
WHY BUY PROPERTY OVERSEAS?
The reasons for this outpouring of currency from Jamaica are
varied. C.D Alexander realtor Alton Thompson believes, "people are not feeling secure and they are hedging their bets." Century 21 Heave Ho Properties executive director, George Cummings, states, "In the United States, getting a mortgage is very easy." According to his company's website If you are buying in the U.S., most mortgage companies require:
A 20 per cent deposit
References: usually from your bank
Two character references
Proof of income (and that all taxes have been paid)
Evidence of a U.S. bank account
Coldwell Banker managing director Andrew Issa opinioned, "There wasn't much inventory in Jamaica to buy. Florida especially has a wider selection of upscale properties to choose from."
BULLISH ON FOREIGN
REAL ESTATE
Basically, the realtors were bullish on investing overseas and did not view this trend having a negative effect on the local real estate market. Explains Mr. Cummings, "People are not choosing between Jamaica or Florida. They are just looking at overseas as an investment option. Most of our clients don't plan to leave Jamaica to live in Florida. They are fine living in Jamaica, but they just want to diversify their holdings."
Due to the relative affordability of homes in Florida, many Jamaicans look at having a hard currency cash flow. States Mr. Thompson, "You can't go wrong with real estate in Florida. In fact, it makes more sense to have a house in Florida than a house in Jamaica. Florida has a more stable economy. Plus, interest rates there are extremely low and people are taking advantage of the low rates to invest."
Mr. Cummings continues, "Persons with children in school overseas are opting to pay a mortgage instead of paying rent. At the end of university, they can either sell the unit or have it for their child. Also, people are looking at rentals to earn U.S. dollar returns."
Mr. Issa also sees this. "Florida has the right mix to support rental investments. Homes are affordable, starting at US$75,000. There are thousands of people moving into the state daily and it is close to Jamaica. Therefore it is easy to buy property where the rental
covers the mortgage payments."
And while mortgage rates in Jamaica start at 13.5 per cent, rates in the U.S. are even lower, at under six per cent.
Mr. Issa also explained that there was a lull in local construction, which created the impetus for investors to look to Florida. "Between 2002 and 2003, Geon was the only builder of upscale homes in Jamaica, but now that is changing."
PRICE APPRECIATION
And one of the benefits that early investors in Florida have enjoyed is price appreciation. Mr. Cummings states, "The Florida market has had a tremendous boom over the last three years. Prices are going up every day. I know people who bought units in South Miami in April during pre-construction with US$15,000 down. Since then, the units have gone up in value by US$15,000. And since there is no escalation in prices, the profit goes straight to the bottom line. Already, they have US$30,000 in equity." Mr. Issa has a similar tale of profit. "We sold units in the pre-construction phase of a development last year. The clients only had to pay 30 per cent down. Today, those units have appreciated by US$50,000. They have made a nice return."
JAMAICA STILL BENEFITS
One positive spin-off for the local economy is that many persons who have made their profits overseas are returning home to purchase real estate. States Mr. Issa, "Jamaica' real estate market is very buoyant now. Internationally, we have a good name and so I see a lot of re-investment of profits back in Jamaica. It is a good time to be in real estate in Jamaica."
