How to Start Investing in Real Estate in Curaçao?

Investing in real estate can be exciting, rewarding, and highly profitable. However, it often requires more time and effort than passive index investing. While some tasks can be outsourced, this can ultimately reduce your return on investment. Depending on your skills and goals, outsourcing can still be a smart move, especially when it comes to tax implications. We will dive deeper into that later, but for now, let’s explore the fundamentals of real estate investment in Curaçao.

Define Your Goal and Path to Success

Before diving in, take a moment to consider why you want to invest in real estate in Curaçao.

• Are you seeking monthly cash flow?
• Do you want to flip properties (buy, renovate, and sell)?
• Are you thinking about long-term investment for retirement, where you own properties that are paid off and can later be sold to fund your lifestyle?

There are many real estate strategies, each with its own pros and cons.

Generating Cash Flow

If your goal is cash flow, the next question is: What type of property are you interested in?

• Will you invest in residential properties?
• Or are you considering commercial or industrial real estate?

Investing with Smaller Amounts

Perhaps you prefer investing in real estate with small amounts or want to enjoy the benefits without the hassles of property management. In this case, crowdfunding platforms or private loans might be a better fit, allowing you to invest indirectly in real estate.

Rental Properties in Curaçao

The most common (and frequently asked about) approach is renting out residential properties. This guide will primarily focus on buy-to-let properties in Curaçao.

Key Factors to Consider Before Investing

If you’ve decided to invest in an apartment or house for rental purposes in Curaçao, here are essential factors to investigate:

• Average property prices in the desired area (price per m²).
• Current market supply and demand for rental properties.
• Rental rates in the neighborhood.
• Ongoing costs – Homeowners association (VvE) fees, property taxes, insurance (liability, home, theft), and maintenance (both routine and major repairs).
• Maximum mortgage/loan availability (typically 70% of the market value in rented condition, which is lower than the unoccupied value).
• Interest rates on real estate loans in Curaçao (approximately 5%, depending on the bank, terms, and conditions).
• Property management costs – If you already have a job, outsourcing property management may be necessary.

Answering these questions will give you a head start in understanding your niche in Curaçao’s real estate market.

Viewing Properties

When buying a home for personal use, you likely focus on comfort and lifestyle. However, for rental properties, the perspective should shift to profitability and tenant needs.

Key Considerations:

• Vacancy risk – How likely is it that the property will remain vacant?
• Maintenance needs – Are any immediate repairs required? Review VvE documents if applicable.
• Neighborhood development – Is the area improving or declining?
• Accessibility and amenities – Parking, nightlife, public transport – how appealing is the location to tenants?
• Improvements – Can you enhance rental appeal by adding a bedroom or upgrading the kitchen/bathroom?

Small Properties or Apartments

Smaller properties, or apartments with multiple tenants, often yield the highest returns.

Viewing 10-15 Properties

As a beginner, success rarely comes from viewing just one property. Expect to visit 10-15 properties before finding the right one. This process sharpens your instincts and understanding of the market. Over time, you’ll need to view fewer properties before making successful investments.

Consider bringing a contractor during viewings of fixer-uppers to get quick estimates and assess feasibility.

Consult with Real Estate Agents and Property Managers

Curaçao’s competitive real estate market makes finding profitable properties challenging. Build relationships with agents, property managers, and industry professionals. A strong network can provide insights into hidden opportunities.

Financial Planning – Do the Math!

Always calculate potential rental income and assess the financial feasibility of each property. If you overestimate rental income and the tenant leaves, vacancies can quickly erode profits.

Financing Real Estate in Curaçao

Securing financing for rental properties can be challenging. Here are common methods:

1. Bank Loans – Real estate mortgages for rental properties. Large banks like MCB, Vidanova, Orco Bank, and RBC typically offer the most competitive rates (5-6%). However, these banks may limit financing to 70% of the rental property’s value.
2. Crowdfunding – Some platforms focus specifically on real estate investments, allowing up to 90-100%financing at higher interest rates (5-7%).
3. Private Capital – Networking can lead to private loans, providing faster access to cash. These short-term loans often cover up to 100% of the property value but come with higher annual interest rates (7-10%).

Property Valuation for Financing

To secure financing, banks often require a property appraisal. This process assesses the property’s value, often by multiplying annual rent by a factor (usually 10-12 in Curaçao). For example:

• Property with NAF 800/month rent and a factor of 12 → Value in rented condition: NAF 115,000.
• With 70% financing, the maximum loan is approximately NAF 80,500.

This example highlights the need for significant personal capital to cover the difference and associated costs.

Exit Strategy

Always have an exit plan. Eventually, you may want to sell the property – whether due to personal reasons, financial challenges, or market shifts. Avoid properties that are difficult to sell, such as vacation homes in B-locations.

Buying Your First Property in Curaçao

Negotiating the purchase price is crucial. Set a maximum budget and stick to it. If negotiations fail, be prepared to walk away. The purchase price directly affects your profitability.

Once a deal is made, a preliminary purchase contract is drawn up, either by the agent or independently. Seek legal advice if dealing with complex transactions or multiple units.

Upon contract signing, the notary finalizes the transfer, and you become the property owner.

Property Management and Rental

Managing properties involves tenant screening, rent collection, and maintenance. Property managers typically charge:

• 0.75 to 1 month’s rent for tenant placement.
• 10% of monthly rent for ongoing management.

Outsourcing is often worthwhile for risk mitigation and tax benefits.

Contact Us

For more information on real estate investments in Curaçao, feel free to reach out.

📧 adriaan@sunlife.realty
📱 WhatsApp: +5999 686 2994

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