The idea of investing in real estate or buying a second home in Aruba is tempting. As one of the most popular vacation destinations in the southern Caribbean with a lot of exciting activities and awesome places to visit, Aruba has a diversity of property market offering everything from sprawling luxury residences to affordable beachfront condos. However, investing in real estate is not always easy as most people think – since it is not just about you invest in your property. You need to consider your options as well as the benefits and drawbacks to make a wise decision.
If you’re considering investing in real estate in Aruba, but you’re wondering “what are the advantages and disadvantages of buying a second home in Aruba,” then you’ve come to the right place. In this post, we at Ben Real Estate are going to show you the pros and cons of buying a second home in Aruba to help you make the right and a well-informed decision.
- According to the GlobalPropertyGuide, Aruba has the third-lowest price per square footage in the Caribbean. That makes its real estate and investing in a second home in Aruba more affordable than investing in other Caribbean islands.
- Aruba’s strict local mortgage rules prevent any kind of problem even from the very beginning of the home buying process.
- Foreigners can own a property or a second home in Aruba.
- Aruba has low property taxes with garbage pickup included in it. You can also take advantage of the tax breaks for homeowners.
- It is your home so you can go in anytime you want, host your guests and cook any food that you like, anytime you want. If you’re a vacationist, this is even more beneficial as you can visit Aruba with your friends and family anytime you want without the need for any reservation or additional lodging charges.
- You can decorate the home anyhow you want and carry only small luggage when traveling down to Aruba since all you need is already in your home.
- Aruba has a large tourism sector with numerous unique, rugged landscape and beautiful beaches to explore. That means you have a high-income generating potential when you use your home as an investment by reselling it or renting it out. You may even use the proceed of your investment (especially rent) to cover your mortgage.
- You have the freedom to choose your desired home location. That means you can buy a second home near your favorite vacation spot and explore Aruba to your heart’s desire since.
- The value of properties rises on a controlled, steady pace. That makes unrealistic gains and short term virtually impossible.
- You would have to pay for your home maintenance. You have to spend time and set aside funds for routine and unexpected home maintenance expenses to keep your home in good condition.
- Your home is not a liquid asset. If you need to sell it due to job relocation or other reasons, selling your home for as much money as you like or as quickly as you want might not be possible.
- There is no guarantee that your home will not lose its value over time.
- It requires cash investment, which means that you have to use your savings for closing costs, down payments, and other homeownership expenses.
- Finding the most reliable real estate agency in Aruba can be a challenge since Aruba has a seemingly uncontrolled growth of real estate agencies.
- The yearly property tax is usually based on the selling price. However, it is determined by the tax office. This is revised every 5 years.
- Property tax for individuals is 0.4% and for company owned properties the tax is 0.6%
- Closing Cost: When buying a home, the following cost will be incurred by the Buyer.
- These closing costs are approximately 6 to 8 percent of the selling price.
- The closing costs are calculated as follows:
- Transfer tax, (one-time tax), six (6) percent of the purchase price of the property
- Notary fees transfer deed: two percent of the selling price approximately.
- Notary fees mortgage deed (if applicable): one percent of the selling price approximately.
Above are the benefits and disadvantages of owning a second home in Aruba. While owning a second home on the beautiful happy island can be a wise choice, finding an extremely reliable real estate agency in Aruba to help you find your dream home and advise you all step of the way can be a daunting task. That’s why we are here to help.
Ready to buy or invest in Aruba? Contact us now, and we will make your dreams come true!