Investing in real estate on Curacao in times of a crisis

26 juli 2020

Is buying real estate on Curacao a good investment in times of a crisis?

After a stock market crash or during a crisis such as the corona crisis, many investors who have had to take a loss are moving away from investing in shares on the stock exchange. At such times, most investors take a wait-and-see approach or park their assets in a savings account. Due to the usually low to no interest that banks offer, investing in real estate on Curacao is a good alternative to be able to achieve a return on your equity, because those who invest real estate still have something to sell afterwards. When you invest in real estate on Curacao, you not only have to deal with rental income but also with an increase in the value of the purchased object. An interesting return potential in terms of rental or sale are already let properties with associated 3 or 5 year lease agreements, these objects are usually in the hands of private investors and are sometimes favorable to buy because they have entered a different phase of their life, whereby having real estate in Curacao is not ideal.
To assess the attractiveness of real estate and estimate the possible return, it is best to seek advice from a real estate agent. When is it a good time to buy real estate? And is real estate still interesting? As a real estate agent on Curacao, I get these 2 questions asked daily by both private and professional investors. My answer to this is very simply the best time to buy that was 5 years ago and in five years time I will give you the same answer again. And whether investing in real estate on Curacao is interesting depends on the following factors: the purchase price in relation to the market value of the object, the maximum return to be achieved, the location, exit strategy and your own expectations.

Investing during and after a crisis

With the crisis at the end of 2008 in mind where many investors have suffered financial losses, the smart investor who has certainly learned a lesson from this will withdraw for a while and from that moment on he tries to build a return full real estate portfolio.
Investing in real estate or putting the assets in the bank?
That is why many investors ask themselves whether there are interesting opportunities in the field of real estate. In contrast to the risks of equities, real estate offers the security of stone. When you buy a home or business premises, you have something material in your hands, a kind of security that you do not have when you buy shares. Moreover, there are possibilities to get a return on it in the long term. However, letting your cash sleep in a savings account at too low an interest rate does not make much sense.

something to think about

What every crisis entails is that people become interested in money matters and in particular how to get as much return on equity capital as possible so that a financially stable situation for the future can be created. If you invest in real estate, you will receive rent and increase in value in return, and when sold you may benefit as a bonus from an increase in value. To invest in real estate you really do not have to have a large equity capital, but there are many roads that lead to Rome

Important factors

Investing in real estate on Curacao is a long-term vision, think for example of an upgrade of the environment in which your real estate is located, or an exponential explosion of tourism in an even further developed resort where the real estate you want to purchase is located. In that case, the value of your real estate will increase and you can make a nice profit on its sale. When purchasing, make sure that you are well informed about the positive and negative environmental factors that can influence the increase in value. Make a list for yourself and conclude whether a certain object is a good investment. You can of course also have the latter assessed by an expert.

what can a real estate advisor do for you?

As a private individual, it is often difficult to have an accurate picture of the state of affairs in the Curaçao housing market. Are prices really falling that sharply or is there rather a relative calm in the market? Would you better wait a while to make an investment or is the time to put your money to work? Real estate is therefore a sector where it is difficult to discover a fixed line in terms of prices, especially if you are interested in different parts or neighborhoods on the island.
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