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Now that I have the energy to put my thoughts together, here's a very long thread on:
Buying property in The Bahamas (with a focus on first time homeownership decisions)
Buying property in The Bahamas (with a focus on first time homeownership decisions)
First of all, these are some serious times. The economy is historically unstable right now, so some of these points may change over time.
I started this process over a year ago so I was comfortable enough at the time to sign contracts, but don't rush anything if you're uncertain
I started this process over a year ago so I was comfortable enough at the time to sign contracts, but don't rush anything if you're uncertain
Also some of these tips may be kinda Nassau-centric because... I live in Nassau. But this is just a general guide for those who are interested in or thinking about buying in the long run.
First thing to do is to get a general idea of the Bahamian real estate market. From my final year in university I browsed real estate websites every day and used mortgage calculators to get an idea of how much I'd need to have saved to be in a position to buy when I moved home
Generally, downpayments are 10% of property price. Ex: you put $20,000 down on a $200,000 property. Some banks offer less (CIBC does 5% downpayments if you're in a good position, especially young people). Ultimately the seller decides what amount they want you to pay down though.
The first official step to take is to set up meetings with banks so they can prequalify you for a realistic amount that you can borrow. That will tell you what price range to look at.
They'll want to get a good idea of how likely it is you can actually pay them back, so bring whatever you can to convince them.
The loan officer will ask about your salary, additional income, expenses, marital status etc. I made my own income statements for a few months so they could see my spending and saving habits*.
*May do another thread on this eventually.
*May do another thread on this eventually.
Once you can prove you're responsible, some banks may actually favor young people because the grim reality is we're more likely to live longer so there's more likelihood we can pay them back. So try get in there quick ay.
Try to speak to a few different banks because they don't all have the same interest rates and payback periods, and some may suit you better than others.
I went with CIBC because I felt like they were the first bank to take me seriously, and ise a gal who like pay for convenience & good customer service. Especially in this jokey business environment. This is VERY important in this process.
Anyway now you're looking at properties (yay!). Think about the location long term (easy road access? Jobs/schools nearby? Other developments in the area? Space to expand?) Arrange a viewing with a realtor or seller if they're selling directly.
When you're at the viewing, you'll wanna discuss with them what you're prequalified for. If you aren't prequalified or paying full in cash, theyne really hearing you.
Also the listing price isn't always set in stone, you can negotiate based on the seller's motivation/willingness
Also the listing price isn't always set in stone, you can negotiate based on the seller's motivation/willingness
A general rule when checking properties is to find an easy-to-read mortgage calculator (on a local real estate website), *estimate* a 10% downpayment, 5% interest and 30 year payback period. Again none of those are set in stone but it helps you to get a good idea when looking.
Once you & a seller come to an agreement, go back to the bank, tell them you want *this* property, and they'll give you a list of lawyers to choose from who will represent you in the sale and put your legal documents together.
Shoutout to 1/2 of my bomb lawyer team, @miguelmole
Shoutout to 1/2 of my bomb lawyer team, @miguelmole
Your lawyers and the seller's lawyers will negotiate the sale conditions (down payment, amount of time to close on the sale etc).
Once that's done, pay the downpayment to your lawyer's office, get the receipt and other documents the bank asked for, sign the sales agreement and submit the loan application to the bank.
It can take a month or so for the loan to be approved, after which the lawyers will conduct their Title Searches and do other lawyer-y things to get the legal work together.
Tbh the downpayment is the easiest part. You'll also have to pay stamp duty, legal fees and bank commitment fees. Stamp duty is 10% of property price. Generally, sellers and buyers each pay 5% but again, it's up to the seller. Make that one of the first questions you ask.
First time homeowners (and I believe also some islands but don't quote me on that right now) are actually exempt from stamp duty. Coming back to this later.
(This a lot of reading, stop and take a water break).
So I had some people tell me that they want to own property (at this age) but don't want to get in debt.
To be fair this can be realistic if you're looking at vacant land or small fixer uppers on some family islands. But if you want something already established in the city?
To be fair this can be realistic if you're looking at vacant land or small fixer uppers on some family islands. But if you want something already established in the city?
You can get a decent apartment in a decent area for $150,000-ish. I'll let you do your own calculations based on your current income to figure out how long it would take to save enough to buy that in cash.
This is why, as long as you're young and without a family, it's probably not the best idea to buy a 4 bedroom house and pay a mortgage on that. I won't tell you how to live your life, but an investment property makes more sense.
Obviously not everyone is in the position to be able to jump from living with their family straight to buying a place, and not everyone can avoid paying rent. But if you are lucky enough, it makes more sense (to me) to avoid it as a young, single person if you can.
The drawbacks:
1. You're responsible for all maintenance costs
2. You're locked in for X years, opposed to the freedom of renting.
However:
1. If you own 2 units and rent out the other, you have more of a crutch to cover overall maintenance.
2. If you wan move, sell it.
1. You're responsible for all maintenance costs
2. You're locked in for X years, opposed to the freedom of renting.
However:
1. If you own 2 units and rent out the other, you have more of a crutch to cover overall maintenance.
2. If you wan move, sell it.
Another con of buying investment property first is that it reduces your eligibility for your First Time Homeowner Stamp Duty Exemption. Ex: if you buy a duplex you're only eligible for half the exemption, because your "home" is only half the property. I love it here.
If you plan to have a family, think about when they grow up.
I mentioned it's better financially to live home as long as possible but let's be honest, this isn't enjoyable.
Consider giving them something to inherit while supporting their independence w/ somewhere else to live
I mentioned it's better financially to live home as long as possible but let's be honest, this isn't enjoyable.
Consider giving them something to inherit while supporting their independence w/ somewhere else to live
(I tried to squeeze a lot in a few characters there but basically: if you buy an apartment now and move into a family home later, your future kids will still benefit from the initial investment).
Obviously investment isn't everyone's goal, but I just wanted to give y'all something to think about. Whether you want a home, apartment or multi-family investment property, it's good to start thinking about and visualizing how you're going to get there from now.
Just whatever you do, unless you have links in the construction industry, somewhere secure to live already and many years to waste before you actually wanna start building, don't try to build on your own (as a young person) 
that's a thread for another day!
that's a thread for another day!
Hope this was helpful and if y'all have more questions (especially regarding specific figures of certain things) you can DM me!
Also remember a lot of this was personal and subjective, your plans and preferences are entirely up to you.
Also remember a lot of this was personal and subjective, your plans and preferences are entirely up to you.
Some questions I've been asked since posting this (in case anyone else was curious):
Stamp duty, legal fees and bank commitment fees aren't included in your downpayment. The bank will put the total amount on hold in your account until the sale closes.
Banks also require you to have life and homeowner insurance. The younger/healthier you are, the cheaper it is.
Banks also require you to have life and homeowner insurance. The younger/healthier you are, the cheaper it is.
Land, even if you plan to build your first home on it, is no longer eligible (or at least not right now) for First Time Homeowner Stamp Exemption. Again, I love it here.
A tip to save a lot of stress and heartache (not just in this process but for life in general) that I've learned is:
Whatever amount of time/money you think you may need, double it. You don't wanna get caught out without that extra cushion.
Whatever amount of time/money you think you may need, double it. You don't wanna get caught out without that extra cushion.
Something very important I forgot to bring up before is climate change.
Before buying anything, make sure you drive by to see how the property looks after a heavy rainfall. Does it flood easily? Is the initial investment worth the cost to eventually repair longterm damage?
Before buying anything, make sure you drive by to see how the property looks after a heavy rainfall. Does it flood easily? Is the initial investment worth the cost to eventually repair longterm damage?
Most banks and lending companies require you to be in your fulltime job for 2 years before applying for a loan.
You can still meet with them to see if they can negotiate, or to at least get your foot in the door before you get to that point.
You can still meet with them to see if they can negotiate, or to at least get your foot in the door before you get to that point.
