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Views On Caribbean Investment

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First time poster - following the forum for a while now. I'm in the process of making a property acquisition in the Caribbean and wanted to seek some views on the investment opportunity.

Island - St Lucia is one of the smaller Eastern Caribbean islands formerly a banana and sugar led economy now opening up to tourism. Two new major golf courses going in, marina develoment in Rodney Bay etc.

Property - Its a four bed resale villa in the Cap Estate area built about 15 years ago (the upmarket estate in the very North of the island). Villa is approaching 400 sq metres and priced at £800 a sq metre. I expect to get a yield of 6% from long term rental and with some minor improvements drive the yield up to 8% or higher either by attracting better tenants or converting to a holiday let. Quite good demand from tenants due to amount of development work on the island at the moment although this may reduce longer term. Also the price paid is likely to be between a third to a half of the cost of a new build property in the area. Captial values currently appreciating at around 10% per annum - certainly land values are.

Long term - after ten years we are looking at the property as a winter bolt hole.

My major concern is cost of local finance at around 7.5% which means any debt funding will need to come from another source. Investment will not be debt funded until works have been completed.

Iinterested in views from HPC regulars on whether this represents a decent investment or not?

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