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Return on investment of you second home

Return on investment of you second home

The return on investment of your second home is much higher than the return on your savings account!

The interest on your savings account is decreasing or is in some cases nothing at all, saving is no longer attractive. Many investors are looking for a safe and profitable investment and opportunities for the purchase of a second home on Curacao and then offer these for rent.

The purchase of a second home on Curacao gives more security, and yields a higher return. The risk of vacancy is in fact very limited. In the Caribbean there is a great shortage of social and private rental housing due to the huge number of expats and interns on the islands. If you want to enjoy your investment in addition to return, you can choose for the purchase of a holiday home. If you do not use your home yourself, you can easily rent it out by Airbnb, booking.com and many other online platforms. On Curacao there are several Management and Rental organizations that can assist you during the stay of your guests or even take over the entire Rental and Management process.

For many individuals, renting a house is often the only option. For investors this is a good opportunity of return of investment because the mortgage interest rate in the Caribbean averages 6%, investors benefit from very high rents. Partly by buying smartly, renting out a rising housing market and under attractive conditions, you can safely invest for a return that can be up to 14%. The profit on sales is not included in this.

Buy calculation example with your own money:

You buy a second home for € 200,000 and rent for € 1,500 per month. Then your gross return on an annual basis is € 18,000 / € 200,000 = 9%.

Buying example with a loan capital:

Because financing by a Dutch bank is rather difficult, most investors choose for a local bank on Curacao. With a private contribution of 50%, most banks apply 6% interest with a repayment period of 15 years.The purchase price of the second home is € 200,000. Own contribution € 100,000, debt via bank € 100,000.
You rent out the house for € 1.500. The rental income is still € 18,000 – 6,000 interest, debt is € 12,000.
That is 12% return on your invested capital!

As an investor, you want to limit the financial risks to a minimum. Buying a second home for rental is a safe investment with limited risks. The biggest risks you run are vacancy, rent arrears, damage and rental notice. You can minimize these risks by renting out your second home or apartment to expats. Expats are often looking for temporary housing, and receive a budget from the employer that in some cases even pays the rent. The advantage of this is that you have more certainty regarding the rent payment. In addition, your second home or apartment is not permanently occupied, which significantly reduces the chance of damage. By renting your property in a furnished way, rental income increases, but take into account the depreciation of furniture and other items.

Damages and repairs can be contractually recorded. Be sure to be assisted by a local partner on Curacao who knows the pitfalls on the islands like no other. For you this means that you reduce the risks and get more return on your investment.

Buying a second home on Curacao for rental is a safe investment. Because you have the certainty of ownership, and can always sell the property with added value, you run few risks. As an investor you benefit from the high rents and increasing demand for living space. Buying and renting a house is not something you do every day. When buying and renting a second home or apartment on Curacao, many things come to look at what you, as an investor, may not have the time or knowledge of.

As (rental) broker Dushi Homes helps you with: offering your home to expats, calculating the maximum rental price, thoroughly screening and selecting the candidates, taking care of the viewings and drawing up the legally tested contract. If required, we take care of managing your second home or apartment on Curacao. The advantage of this is that you do not have to worry about it yourself, and the letting of your second home is done according to laws and regulations. With the result: maximum return on your investment.

Dushi Homes = Skilled » Fast » Reliable » Personal

Because of our years of experience in renting accommodation on Curacao and a large network of expats, offered homes through Dushi Homes are usually let within 2 weeks. Benefit from our local market knowledge and still offer your home today. Contact us for free advice. Our rental and sales brokers are ready for you.

This article is written by Adriaan Smit, Real Estate

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