The real estate market in the Caribbean is hotter than the weather – Turks and Caicos alone saw a 16 percent increase in sales in early 2018. Why is this market still booming after so many years of success? The answer is easy. To illustrate, if you’ve ever been to the Caribbean, perhaps while on your honeymoon, you likely experienced at least one moment where you sighed and said, “Wow, I wish I lived here.” If so, you’re not alone. The people are cool; the weather is warm; and the potential profits are hot. But you can’t just throw on your Tommy Bahama shirt and cha-cha your way down there with a wad of cash. Like all investments, you have to enter the Caribbean market strategically and with your eyes open.

Getting the Capital to Get Started

Before you wade into the warm waters of Caribbean investing, you’re going to have to accept what can be a harsh reality for some: you’re going to need some cash. In more developed first world countries, OPM works quite well, but in the Caribbean it stands for “Oh, Please, Mon.” Cash is king. However, that doesn’t mean you need to have a lot of it, and when it comes to how you get it, a little creativity can go a long way. You can join forces with friends, relatives, or even establish a trust in your home country. Just make sure everything is in writing and legally sound. You also cannot ignore the power of simply saving up the money you need. In both little and big ways, you can make changes to store up that precious capital. Make sure you get a return on your investments, taking advantage of loyalty schemes, and keep track of your expenses, including food, using an itemized budget. Saving a few hundred a month will go a long way. This is because the Caribbean market is very different from that in the States.

What Makes the Caribbean Market Unique?

This won’t come as a surprise: location, location, location. But the reasons Caribbean locations are so appealing are usually diametrically different than what makes first world locations so marketable. It’s not about the jobs in the area, the schools, or the infrastructure. It’s about the dream of waking up to warm breezes, cool, colorful, fruity drinks, friendly people and a simple life whenever and however you want. And the reality is that is exactly what it’s like. As an investor, this is what you’re selling people. The key to success is making sure you do it the right way.

Buy Low, Sell High Caribbean Style

First, we have to dispel some myths. This ain’t America. In the Caribbean, you cannot find a piece of property online for a great price and then buy it “low” and sell it “high.” Those deals do not exist. If the advertised price is low online or in a newspaper, it’s because the house is worth about 30% less than what it’s advertised at. In other words, it’s a rip-off. The only way to buy low and sell high in this market is to buy a distressed home in a good location and fix it up. Also, it’s OK to lowball. People will pretend to be offended, but keep a straight face. Eventually, they will cave because that property has been a pain in the pocket–and they can’t wait to unload it.

Building on Locally Sourced Property

If you’ve built and flipped before, this will be simultaneously familiar and strange. The profit margins from building a simple, yet nice house are compelling. In the Caribbean, the margins are at least as juicy. But here’s how to truly capitalize: go and talk to the locals. Will they charge you more because of your accent and clothing? Yes. But will you pay as much as you would if you went through a real estate agent? Nope. Many of the local residents in a place like Belize, for instance, literally paid less than $3,000 for a property that was given them by the government. At the same time, they already have a home on their family’s lot that they are quite satisfied with. If you offer $20,000 for their extra lot, they may very well say yes. It’s as simple as walking into a local bar and chatting up some of the guys. And, no, not an expat bar. Just let someone know what you’re looking for and see what people say.

Once you grab a property for around $20,000, you can build a modest home on it for $30,000, and then sell it for $150,000. Or you can rent it, Airbnb it, lease it, or short term lease it using a property manager. But once you’re in, you’re in. It’s literally that simple—well, almost. You have to do your research first.

Do Your Research Before Visiting

Make sure you know everything there is to know about the local real estate laws before you go down to check things out. Some, like Belize, are fairly simple and based on the British system. Others are more complex. The bottom line is to make sure the seller has a title in hand that can be transferred to you. If there is any doubt, shake hands and walk away. No harm, no foul. Hire a local attorney to take care of the transaction for you. This will avoid a lot of headaches.

The Caribbean market is sweeter than a margarita at sunset. The best way to capitalize on it is to get in on the local level and keep asking questions until the deal looks right. Do your due diligence. Ensure the title is legitimate and transferrable. And soon enough, you will have your piece of the Caribbean pie.