Why You Should Buy Your Second Home in Aruba
Aruba is known as one of the best travel destinations in the Caribbean. It enjoys considerable tourist activity thanks to its beautiful beaches, pristine waters, thrilling adventures, and an overall tourist-friendly vibe.
These reasons also make it a coveted location for real estate investment. Many interested buyers from places like the US, Europe, and South America are buying second homes in Aruba.
But the question is, what exactly makes it so attractive? And if you're interested in buying a second home in Aruba, what should you know about before you do? You'll find it all here.
Why Buy Residential Property in Aruba?
These are the main pros of buying a second home in Aruba:
Features the least expensive property per square meter in the Caribbean.
A heavy tourist footprint makes it an ideal location for owning rental property and earning significant profits.
Aruba has an advantageous location, lying at the center of tourist hotspots like South America, the Caribbean, and Central America.
The real estate market is stable due to the strict mortgage requirements and little to no speculation.
High demand for property makes Aruba a profitable place to invest in for the coming years.
The process for buying real estate is the same for non-residents as if you were a local. Overseas investments are also encouraged by the government.
Let’s have a look at these in more detail.
A Booming Tourism Industry
Aruba's popularity as an exciting tourist destination has risen over the past years. It welcomes visitors from all parts of the world due to the locals' hospitality, political stability, and a variety of hobbies, activities, shopping, beaches, and luxury lodging.
Tourism is responsible for about 34% of Aruba's GNP. Moreover, North American tourists make up about 73% of those visiting Aruba. As a result, this Dutch Caribbean island is a great candidate for having a second home.
Aruba is also a part of the Kingdom of the Netherlands. As a result, it enjoys close political and diplomatic ties with much of Europe. This provides Aruba with a more secure environment, unlike other Caribbean islands. Aruba also has more direct access to the US and Canada.
A Healthy Real Estate Market
Aruba is an attractive location for many real estate investors because the prices are not as inflated here as in the US. Since the world opened up post-Covid, there has been a sharp upward trend in real estate prices in Europe and North America. Aruba, however, has not been affected by this trend as significantly.
Even though property prices are going up faster, it is still incomparable to other famous tourist locations. Land and property is in high demand in Aruba, and now is a good time to invest in it. The market has seen a boom in the past couple of years, and prices have been going up consistently at about 4% year-on-year. This makes Aruba an excellent choice for buying real estate, whether as a second home or as a rental vacation property (or both!).
Many banks in Aruba offer mortgages to residents as well as non-residents. Terms and requirements for non-residents do differ when compared to those offered to residents but these are made clear by the relevant financial institutions.
The annual tax you have to pay is called land or ground tax. This land tax is based on the selling price or the tax value, whichever is higher. Non-residents pay a tax rate of 0.6% of the property value.
Closing costs will roughly be between 7% to 10% depending on the value of the property and residency status. This includes a 3% transfer tax up to and including AFL. 250,000.00 and a 6% difference tax.
A Great Return on Investment
Last but not least, Aruba is one of the safest financial decisions you can make when it comes to investing in a high-ROI luxury vacation rental. The country is ripe with a booming tourism industry, and more and more people from Europe, the US, and South America are visiting the island each year.
But buying and managing a vacation rental property is not as simple as making payments and calling it a day. If you seriously want to squeeze the maximum potential out of your rental property, you must manage it in such a way that it stays consistently competitive and visible to interested tourists.
You can spend hours daily setting prices, doing property maintenance, and handling other responsibilities which come with this not-so-passive method of making money.
Or you can work with us at Bocobay.
We are a luxury property and vacation rental operator, committed to providing the highest level of service in the Caribbean’s most exclusive private residences.
Our tech-enabled solutions, managed from our London head office, underpin our best-in-class property management, while our concierge team coordinates operations on the ground to ensure an incredible, bespoke experience for every resident and guest.
