Real Estate Talk | Four reasons to invest in real estate

"Real estate investing, even on a very small scale, remains a tried-and-true means of building an individual’s cash flow and wealth." — Robert Kiyosaki.

We've all heard it from the world’s wealthiest entrepreneurs, industrialists, and investors — owning real estate is key to unlocking lasting wealth and financial stability. Here are four reasons why investing in Jamaican real estate is a surefire path to wealth generation.

1. Real estate provides a secure and competitive return on investment

In Jamaica, average rental yields start at around 6 per cent and can easily climb higher alongside the steady appreciation of property values. With demand for real estate consistently rising, developers are working hard to meet these needs, albeit at a slower pace, due to the unique characteristics of land and real estate. As inflation chips away at savings and income, savvy investors turn to assets that preserve their money’s value — real estate being a prime example, as property prices often rise in tandem with other costs.

2. Resilient real estate market

The Jamaican real estate market has proven to be incredibly resilient, even in the face of challenges like the COVID-19 pandemic. While the Services Industry in Jamaica declined sharply by 20.6 per cent during the early pandemic months (April–June 2020), the real estate, renting and business activities sector showed remarkable stability, second only to Government services. Within the goods-producing industry, the construction sector emerged as the highest-growing sector throughout the pandemic. This resilience underscores the strength and stability of the Jamaican real estate market, making it a reliable investment choice.

3. Robust rental market

Jamaica's booming tourism industry and the influx of expatriates fuel a strong demand for real estate. As one of the world’s top 25 destinations according to the 2019 Travelers’ Choice Awards, Jamaica attracts millions of tourists each year. Many visitors seek authentic experiences by renting local properties instead of staying in hotels, and the returns are impressive! In 2021, Airbnb bookings surged by 55 per cent, and Kingston hosts alone earned US$2.4 million from Airbnb services in 2017. Short-term rentals have become the go-to option for real estate investors, and with tourism now surpassing pre-pandemic levels, investors can expect even greater returns. According to Minister of Tourism Edmund Bartlett, Jamaica's tourism sector is on track for record arrivals, with October 2022 figures already surpassing pre-pandemic levels.

Have you heard of a home equity loan? Local financial institutions offer this unique loan, allowing homeowners to borrow against the equity in their homes. The loan amount is based on the difference between the home’s current market value and the remaining mortgage balance. With a home equity loan, you can finance virtually anything — starting a business, pursuing higher education, or even making a down payment on a second home. By leveraging your home equity, you not only benefit from higher resale values and competitive rental rates but also achieve personal and financial goals, paving your path to wealth.

Tianna Porter is a marketing and sales officer at Proven Properties. Email feedback to realtalk@weareproven.com and lifestyle@gleanerjm.com.