A vacation home in Puerto Rico is a fantastic choice for a second home in the Caribbean! Not only does it offer tropical weather all year long but the Caribbean Spanish culture is very pleasing to the senses and the investment and lifestyle appeal is the same.
It’s affordable, wonderful and so close to home
In this article, we’ll take a look at the ins and outs of purchasing a vacation home in Puerto Rico. That includes the more accomodating towns and cities, the amenities and the rules and restrictions. When you’re finished reading you’ll have a much better idea of where to look in Puerto Rico and how to make your vacation home purchase as hassle-free as possible.
Is It Easy For Americans to Purchase a Vacation Home in Puerto Rico?
You bet it is! The reason why is simple and fantastic: Puerto Rico is a commonwealth of the United States! That means any American citizen can purchase property or a home on the island no problem. Also, when traveling back-and-forth there’s no need to go through customs which can save you a lot of time and energy.
Besides the fact that Spanish is the main language spoken in Puerto Rico, there’s practically nothing else that’s stopping you from purchasing a vacation home there. Frankly, the language barrier isn’t that difficult to breach either as many people in Puerto Rico already know how to speak English.
Is it a Good Time to Purchase a Vacation Home in Puerto Rico?
Very much so. Right now Puerto Rico is in a debt crisis which has caused real estate prices to fall. In some cases, they are 25% to 30% lower than they have been in over a decade! One thing to keep in mind, however, is that with a risky economy comes the chance home prices could drop even lower. If you’re looking to purchase a vacation home in Puerto Rico for investment purposes, be aware that the risk is moderate to high right now.
Why You Should Consider a Condominium
Purchasing an actual home in Puerto Rico, while it is possible, might not be your best choice depending on your needs. If you want a vacation home that is low maintenance and offers a beautiful location on (or very near to) the beach, purchasing a condominium might be a better choice. The purchase price of a condominium is also more affordable and, if you want to resell in the future, it’s a bit easier.
Another big plus about purchasing a condo is that if you want to use it to generate income when you’re not there, it’s much easier. That’s because there’s already a maintenance crew and property rental company in place in most condominium complexes.
Is Working with Real Estate Agents the Same in Puerto Rico?
The answer to this question is yes and no. While real estate agents show you homes (or condos) just like they do in the contiguous U.S., that’s pretty much where the similarities end. You see, in Puerto Rico, real estate agents acquire their own listings. Because of that, they will only show you the listings that they’ve acquired, for obvious reasons. What that means is that, once an agent has shown you all of their exclusive listings, you’ll have to find another agent to see other listings. This can be time-consuming unless you find a home or condo you like right away.
How Can You Perform Research Yourself to Buy a Home in Puerto Rico?
Unless you have made numerous trips to Puerto Rico in the past, the chance that you’ll know where to look will be minimal. Luckily, online real estate search platforms like Zillow can help you to find a place in Puerto Rico as easily as they can in the rest of the United States. You can use these online platforms to search for condos and homes before you travel down to Puerto Rico and save yourself some time. Your best bet is to make note of all of the places that might work for you and make a list of them so that, when you arrive, you can start your search ASAP.
Puerto Rico Can be a Tax Haven
Another big plus of purchasing a vacation home or a condominium in Puerto Rico is that, in most cases, you will not have to pay any taxes and interest, dividends, or capital gains. There are certain criteria that you need to meet including residing on the island for a minimum of 183 days per year. The even better news is that these tax incentives look to be paving the way for higher capital growth on the island, which will be good for Puerto Rico and her people.
Be Sure to Visit the Property in Person
While it’s true that photographs and videos online can give you a very good idea of what a condominium or home looks like, including the surrounding area, it’s a good idea to visit the property in person before signing any contracts. Not only that but you will also see what the surrounding community looks like so that you can get a feel for what it will be like when you live there. The last thing that you want to do is purchase a home sight unseen and, when you arrive, realize that you don’t like the area or it doesn’t offer the amenities you were looking for.
Rent a Self-Storage Unit
One very good suggestion is to rent a self-storage unit when you’re visiting Puerto Rico to look for your vacation home. That way, when you come back with all of your household goods, you will have somewhere to put any of the extra things that won’t fit into your new home or condo.
Big stuff like paddleboards and surfboards, outdoor furniture, and other items like that can more easily be stored in a self-storage unit than in your new place. You can easily get them out when you need them instead of letting them take up valuable space. Plus, if you live on a higher floor, having them in a self-storage unit will keep them on the ground floor. No lugging that big, bulky stuff up and down the stairs or in the elevator. If you have questions about this you can always call a friendly self-storage expert at Southern Self-storage.
Do You Need a Home Inspection in Puerto Rico?
Yes, definitely. Just like in the contiguous United States you should find a licensed home inspector to make sure that the home, or condo, you wish to purchase is in sound condition and doesn’t have any major problems. This is even more true in Puerto Rico where the heat and humidity can oftentimes cause damage and mold problems.
Renting Out Your Puerto Rico Condo
Renting out a condo in Puerto Rico, as we’ve mentioned, a good way to generate income. One suggestion is that you rent a self-storage unit so that you can put all of your favorite furniture and personal belongings away when you aren’t there. That will protect them from the damage, abuse, and theft that sometimes happens when you rent to tourists. When you get back to Puerto Rico to stay you can then easily get your things back out of your self-storage unit and they’ll be safe and undamaged. Southern Self-storage can give you all the information you need to do just that.
Are There Opportunity Zones in Puerto Rico?
When an economically distressed part of the United States is designated by the Secretary of the US treasury as an ‘opportunity zone’, investors are allowed to defer all of their capital gains for eight years as long as their profits are reinvested in that zone. Even better, if the investment is held for at least 10 years, all future capital gains from invested funds are exempt from capital gains taxes. That is exactly what is happening in Puerto Rico right now as the IRS recently announced that almost the entire territory has been designated as an opportunity zone.
Puerto Rico is a Phoenix Rising
One of the most interesting things that happen to a country (or island like Puerto Rico) after disaster strikes are that it tends to rebuild even better than it was before. In fact, if you study the facts about hurricanes, you’ll find that wherever they hit, the area grows stronger economically. Yes, it might take some time (and an amazing amount of effort), but Puerto Rico right now is coming back strong. Like a phoenix rising up from the ashes, this lovely island will soon be back to her former glory.
Whether you’re looking to retire or want to purchase a home or condominium in Puerto Rico for investment purposes, right now seems to be a very good time to do it. The island is recovering and, as we mentioned, most of Puerto Rico has been designated as an opportunity zone. When you add that to the fact that Puerto Rico is one of the loveliest places in all of the Caribbean with beautiful weather, very low crime rates, and is a part of the United States, there’s almost no downside.