Renting vs. Buying Houses in the U.S. Virgin Islands
Do you dream of a slice of tropical paradise to call your own? If so, you’re not alone. More people than ever before are moving away from cold northern climates and taking up residence in the sunny Caribbean. Some are even investing in a “second home” before they buy a first home!
Caribbean real estate is perfect for retirees, second homeowners, and a growing number of remote workers. For Americans in particular, the best place to buy a beach house is in the beautiful US Virgin Islands.
But when it comes to houses in the Virgin Islands, there’s one important question to consider: is it better to rent a home, or should you take the plunge and buy one?
There are pros and cons to both choices, but don’t worry. We’re here to help you decide which is the best option for you!
Advantages of Renting Houses in the U.S. Virgin Islands
Let’s start with a few reasons why you might choose to rent a Caribbean home (at least initially).
1. No long- term Commitment to the Property
Unless you’ve spent a lot of time on the islands already, chances are you’ll need to familiarize yourself with the area. Each island and town may have a different feel to it. Some are livelier with more conveniences, while others are private and secluded. How will you know which area you prefer if you don’t spend time testing it out?
Renting a home for a year or two allows you to discover what you like and dislike without tying yourself to one location. You might have your heart set on a waterfront home rental, and then discover a preference for a different lifestyle—for example, a mountain home with great views instead of beachfront property.
2. Repairs & Maintenance Fall on the Landlord
Annual maintenance and repair costs can total as much as 4% of a home’s purchase price. This is in addition to the time you’ll spend hiring workers or doing the projects yourself.
When you rent, you have much less to worry about when it comes to the actual property. If anything goes wrong or needs replacing, your landlord is the one who must sort it out (and pay the bill).
3. Smaller Upfront Financial Commitment
Some people view renting as throwing their money away, but that’s not always the case. Perhaps you’re still saving to purchase a home down the road. Or maybe you have other financial obligations that prevent you from buying something right now. Renting a house for a short period of time allows you to work towards those financial goals without emptying your savings account.
Advantages of Buying Houses in the U.S. Virgin Islands
Renting has its pros and cons, but what about buying a home in the Caribbean? Here are 3 reasons you should consider it if your circumstances allow:
1. Tax Benefits
Save on taxes while living in a tropical paradise? Yes, please! The Virgin Islands’ tax program is one of the most competitive tax benefits packages in the world. All the tax laws in effect in the US are “mirrored” to the US Virgin Islands, with VI residents paying income taxes to the islands instead of the US. For those who qualify, this may result in up to a 90% reduction in income taxes and a 100% exemption on property taxes.
2. Building Home Equity
An advantage to homeownership in the Caribbean (indeed, anywhere) is the chance to build equity through the property’s value. You also have the advantage of a set mortgage payment that won’t fluctuate the way rental prices do.
Rather than renting and helping your landlord pay off his mortgage, each mortgage payment you make helps you save for the future. And if you ever do sell the home, you could walk away with a lot of money in your pocket.
3. More Freedom to Do What You Want
When you rent, you’re limited in the things you can do to the property itself. You may also have certain restrictions as far as owning a pet or hosting visitors.
Many people choose to buy a home, so they have the freedom to do as they like. Whether it’s building a wrap-around porch, repainting the kitchen, or adopting a puppy, you can do whatever you want as a homeowner.
Other Factors to Consider
There are clear advantages to both renting and buying houses in the Virgin Islands. Here are a few other factors to consider if you’re still having trouble deciding which course to take.
The Caribbean looks tranquil in a postcard, but it’s prone to some of the most violent weather on earth.
As a renter, your landlord is responsible for making repairs in the event of a hurricane or other disaster. If you buy a home, you’re assuming full responsibility for the property yourself.
Real Estate Listings vs Reality
Whether you choose to rent or buy, never sign anything on a property you haven’t seen in person! Visit the home yourself so you can see if that million-dollar view is as good in real life as it was in the listing. This also gives you the chance to scope out the neighborhood, amenities, and road conditions.
Caribbean Real Estate: What Will You Decide?
So, which of these options makes the most sense for your circumstances? Renting houses in the Virgin Islands allows you to taste the lifestyle without making any major commitments. You also have less to worry about in terms of maintenance and repair work.
On the other hand, homeownership in the Caribbean offers tax breaks and the chance to build equity for the future. It also allows you more freedom to do as you please with the property.
Whichever path you choose, rest assured that you’ll love your new “island” lifestyle!
Are you ready to begin your quest for your dream tropical hideaway? Search our available houses in the US Virgin Islands. Need more time to think about it? Contact us to discuss any questions or concerns.