Cuban real estate

As the winds of change sweep through Cuban real estate, prompted by the retiring of Fidel Castro, hundreds of investors from North America and Europe will have flocked to Cuba. The largest island in the Caribbean offers a tremendous long term investment opportunity in Cuban real estate and the various sectors searching for investment are numerous.

In Cuba we have the wonderful opportunity to enjoy and discover a rich and diverse culture of one of the most articulate, bright, and passionate peoples in the Caribbean islands.

Located only 90 miles form the U.S., Cuba is sometimes called the "Pearl of the Caribbean" for its beauty and boasts over 70,000 square miles of breathtaking terrain, 2,000 miles of coastline, towering mountains, spectacular landscapes, quaint colonial towns and a couple of cosmopolitan cities like Havana. The 300-odd unspoiled beaches, bays and inlets surrounded by the beautiful crystal-clear waters of the Caribbean have always been the island's main attraction and a place where you can enjoy your favorite outdoor activity. In Cuba there is plenty to do, lots of fishing, swimming, dancing, hiking, diving etc.

Baby Boomers some 80 million strong will begin to retire in the next decade. The search for new retirement havens may soon turn south of the border. In the growing "Global Age" the United States will eventually work out its differences with Fidel Castro's successors. Cuba will join Costa Rica, Mexico and Belize as Latin America's prime retirement havens. Aging Baby Boomers, savvy entrepreneurs, snowbirds and expats of all ages will see Cuba as an affordable place to maximize their lifestyles, be lured by the warm climate, abundance of new business opportunities and one the hottest travel destinations ion the world due to its proximity to the United States and mystic.

Cuba is home to 11 million people that are friendlier to visitors than most North Americans.
Since the fall of Communism in Europe, the Cuban government has taken great steps to develop its tourism industry,
and today more than 2 million visitors sample its Old World charm each year.

Regulations issued in 1996 legalize private land ownership making it possible to invest in real estate and own property. Consequently most foreigners invest in foreign real estate. Property rights are now recognized and protected from state expropriation. This opens the door for real estate investment and development. There is a potential windfall in redevelopment in Havana or where housing has become substandard. Dilapidated buildings abound, needing new plumbing, water, electrical work and structural redesign.

One area that promises to be a potential gold mine is the run down decaying buildings which border Havana's sea side malecón. This area has the potential to become another tourist Mecca like Miami's South Beach. It is only a matter of time until this type of transformation will take place.

About 80% of Cubans own their own homes. Those who owned homes before the revolution and stayed have been allowed to keep their homes. Others have acquired homes since then. By law Cubans can trade homes but cannot sell them. The Urban Reform Law of 1960 changed rent payments into mortgage payments on a five to 20 year basis. This made owners out of renters. Today a large percentage of Cubans own their own homes and pay no property taxes.

There is a tremendous housing shortage at present in Havana with some houses and apartments housing several families

When looking to invest in land or housing don't assume that the person who is selling land is honest. Proceed with caution. Hire a trustworthy attorney to explain the finer points of local laws. Have your attorney check out any documents and to help you at every stage of negotiations. Make sure he finds out who is the rightful owner of the property and if there are any liens and encumbrances. It is not unusual for scam artists to sell the same piece of property two or three times to different individuals.

Also, be sure to talk to your future neighbors. Ask them about water shortages, safety, burglaries or other problems in the area. Inspect the property in person-never sight unseen. Check to see if you need special permits to build. Be sure to compare land values in your area to see if you are paying a fair price. Make sure that roads and streets are in decent shape and that telephone and electrical services are available if you are building in a remote area. If you can you are wise to rent in your favorite area first in order to find out if it is really for you.

Beach property is always a good investment if you can find it for sale in Cuba. Be sure to check out restrictions when buying property adjacent to the beach. Before you decide to move to an isolated beach area or resort, be aware that the novelty of living at the beach full time wears off quickly. Visiting the beach for a few days or weeks is very different than living there. The humidity, boredom, lack of emergency medical facilities in isolated areas, tourists and crowds are factors to consider.

The sale of real estate in Cuba is a relatively new addition to the local economy and one that has materialized through the intense demand from visiting tourists.

Recently it was announced for that, 1 the first time, foreign tourists will be able to buy condominiums and time-share units as a part of a $250 million Canadian-Cuban joint venture. The project, backed by the Cuban government, calls for construction of 2,000 luxury units over the next ten years and is one of the biggest outside investments yet in Cuba's tourism industry.

There will be many new projects with apartments ranging from a simple studio unit to luxurious penthouses, villas and condominiums. All will have swimming pools, garages, central air conditioning, power generators and all of the other amenities of home. Most of the projects currently underway are in the Havana area extending from the eastern beach region to the upscale Miramar area. There are currently no mortgage services available on the island although these services are bound to be available in the not too distant future as demand for new housing grows.

At least in the short term, American citizens won't be among those buying into the new resorts. But other foreigners have no such constraints. However, all of this is sure to change once Cuba and the US normalize relations, hopefully in the not too distant future.

A fresh wind of opportunity is about blow into Cuba with the announcement of the construction of nine golf resorts that is to commence as early as this May. Well known for its communist regime, Cuba might finally enter a new era as the government is keen to attract more overseas investors and tourism.

While the thought of buying a £70,000 property in the Caribbean might attract many, there are many things to consider before you actually part with your money.

There seems to be no doubt that with the retirement of Fidel Castro might come new and better opportunities for investors into Cuba, but the process is still tiresome and riddled with red tape.

If you are happy to acquire new property in Cuba for a bargain compared to other destinations in the Caribbean with a 75 year lease rather than outright freehold rights, then yes, you could become a new property owner in no time. However, this only applies to non American citizens as they are currently not allowed to buy property in Cuba.

Europeans and Canadians have free range to take advantage of the favorable prices but we think it is fair to say that most would cringe at the 75 year lease clause. Why would one want to invest thousands of dollars to own a property for a short amount of time in the first place?

To make matters even more worrisome, Cuba also sits right in the destructive path of a Hurricane alley and residents of the island certainly suffer the consequences of some damage most years. Not entirely a comforting thought for those ready to part with their money.

The Cuban property law also prohibits locals from selling their own properties; they are only allowed to swap if they wanted to move or change. While many still do deals under the table and money changes hands unlawfully, this also poses a problem to overseas buyers who decide to sell for profit later down the track. This law limits them from selling to locals and with the ever increasing cost of flights it might also become an issue to sell your Cuban property to another overseas buyer.

There is no doubt that Cuba offers buyers a lot in terms of cost efficiency and scenic beauty, but when we look at the other aspects of buying such as infrastructure, laws and ease of ownership it is clear that buying property in Cuba isn’t as straightforward as one might think. In the least you should inform yourself about all your options before you rush to buy those property bargains.