Property management market on the upswing, overseas buyers interested
Andrew James, president of the Realtors Association of Jamaica, has indicated that property purchase and management contracts are on the increase, with overseas buyers looking for a return on investment, “especially short term rentals such as Airbnb”.
He also indicated that the group is scouting for pre-construction deals and are primarily in their mid-40’s.
Other realtors, while also agreeing that there was an uptick in overseas interest, said that it was often hard to distinguish between buyers originating from Jamaicans abroad and their related parties living here.
Edwin Wint, CEO of Better Homes and Gardens Jamaica, said that “both diaspora buyers and foreigners are seeing good value in our real estate market”.
Data James secured from the National Land Agency indicate that total registered property transfers in 2017 included 10 properties for CDN$1.067 million, one property for €55,000; 33 properties for £3 million, 9,320 properties for J$102.13 billion and 483 properties for US$251 million.
Values for total registered transfers in 2018 included three properties for CDN$296,000 in total, 24 properties for £2.43 million, 9,076 properties for J$103.1 billion, and 553 properties for US$242.37 million.
Whatever the geographical location of the buyer, the realtors state that many are asking property management companies to take charge of what is essentially an investment.
Howard Johnson, president of Howard Johnson Realty, said that “our annual rate of appreciation in values and growth of rental income over the term buoys our market attractiveness as well as the appeal of destination Jamaica”.
He added that “whereas I can’t speak about any other agency, at Howard Johnson Realty Limited we have seen an uptick in recent times. With the publicity of the growing tourism, infrastructure improvement and expansion, ease of connectivity between major towns and attractions, as well as timeliness and quality of the developments, demand is increasing.”
Johnson said location and amenities also play a major role as most new developments are now gated and considered safe.
He said that “overseas investors are working with realtors who are looking out for their interests. We are selling, and we are also entrusted to manage these properties.”
Rates for property management, he explained, varies on what is being managed and the services offered.
Transaction tax stimulus
Edwin Wint said hotels, second homes and investment property sales are the main drivers of foreign investment in the Jamaican real estate market at this time, as well as lands for development.
The recently announced changes in the transaction taxes is expected to stimulate more foreign investment in the local property market, he added.
Howard Johnson gave the example of two clients, who were overseas buyers and who have asked for property management.
One buyer bought two townhouses in St Mary priced at $23 million each. They are being rented at US$1,300 per month. Another buyer purchased a Kingston apartment for $25 million. The property will rent for US$1,350 per month.
Johnson said he could not disclose management fees because of competitive reasons, noting that new units under management were often rented by managers.