Monday, June 24, 2013

Should You Buy a Vacation Home in the Virgin Islands?

My intention of this blog is not be advertising my real estate brokerage on here, but rather give readers what it is like to live here in St Thomas and the Virgin Islands. I though I would take a look at how owning a vacation home here may work for some!

Does it make sense to own a condo here in St Thomas?  Well, after doing some math, it may make sense!

I have a one bedroom, one bath, 780 Sq Ft condo for sale near Sapphire Beach. It is currently listed for $139,900.

Now let's say you purchase this condo for list price.

Now you rent this condo out on as a vacation rental for $125/per night and you only have it occupied 50% of the time. Of course you will want to spend some time using the condo and of course your friends and family will want to use it too?

Your annual income of $22,875 minus expenses of $11,539 (HOA dues, power, water, repairs, etc) would be 8.1% of your investment or $11,336.

Now let's look at a conservative appreciation over the course of ownership for 5 years at 3% appreciation a year, you would have an annualized rate of return of 11.1 %, not bad considering what are your other choices are for investing your money these days?  Not mention, living in paradise part of the year?  Oh and don't forget how much you can save too by having a kitchen and making some of your own meals?

Many people opt for a timeshare route, which after a purchase price of about $35,000 for a week, maintenance fees of $1500 a year and after five years, what would your timeshare be worth?

If you are interested in vacation real estate here in St Thomas, please contact me.  I can also send you the spreadsheet I have on condo investments here.

Sapphire Hill Village, Dominca 165
Listed by America's Caribbean Realty
*All investment scenarios are strictly hypothetical, contact a professional financial planner for any real estate investment.

1 comment:

  1. I live in Las Vegas and would like to learn more about moving out there


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