Buying Commercial Realty in Vanuatu
Acquiring real estate is the most substantial financial commitment you may ever make. It is a turning point and will impact your lifestyle.
Many have never bought real estate in Vanuatu so choosing a choice property in the desired area can be a challenge.
Bukh Global is experienced and can help you identify priorities as you look for the property most suitable for your needs, budget, and taste.
Investment property is property purchased with the intent of collecting a return on the buyer’s investment by renting the property, selling later when property values are up — or both. The property can be for the long-term or short term.
The method in which investment property is used impacts its value. Investors often conduct surveys to determine the best use of a property.
Financing A Home Or Investing in Property
While borrowers typically secure a loan for a primary residence, it can be more challenging to find financing for an investment property — other than if it is used as a primary residence.
In most countries when a person sells an investment property for more than they purchased it, there is a capital gain and must report the earnings for taxation. Vanuatu, currently, has no capital gains tax.
Not A Bust
Investment property can be a great way to open a real estate portfolio. While it’s easy to be caught up in a first property purchase, slow down and move forward with caution. Jump the gun, and you may face a costly lesson.
Expatriates face no limitations when purchasing property, but an expatriate may have to prove financial wherewithal. The evidence comes in the framework of a ‘financial reference’ provided by a local agency. A Vanuatu Investment Promotion Authority (VIPA) Investor’s Certificate is not needed unless your acquisition also mandates a business permit. Vanuatu Financial Intelligence Unit sets out the requirements to meet Vanuatu’s sales condition.
There isn’t any freehold land in Vanuatu. If a home is recorded it is a leasehold title.
Bukh Global Investment Property Tips
Don’t Be Overeager
Don’t ‘chase the deal’ or be in too big a hurry. It’s easy to overpay because of the excitement, but make sure you know the numbers when negotiating.
Spend Some Time At The Property
Visiting the property early in the morning and again late at night before signing the paperwork. It can pay to know what’s going on in the neighborhood during those hours. Keep in mind there is no mandate for home buyers to live in Vanuatu.
Check The Value
Whenever you buy property under the appraisal, you have hit a home run. Other factors enter such as repairs and remodeling, but when you still come in under the assessment, congratulations.
Head. Not Heart.
First-time investors don’t have a ‘gut’ feeling. So forget about that. You need to buy on as big a margin as you can to account for all the things you don’t know — and provide an additional buffer. Investment property can be expensive. A couple of bad selections will know you out of the game, so buy if the numbers make sense.
A key tenet of buying investment property is ‘location, location, location.’ If you invest in property which pays for itself, the chances are the appreciation will make for decent investment returns through increased sale value and higher rental income.
Get The Numbers
Make sure to get the numbers right. Often investors buy a ‘flip deal’ without leaving any space for error. In a hot market, wholesalers, agents, and brokers don’t mind closing deal which doesn’t make sense.Only buy flips when the cost is under 68% of fair market value. The first step in buying investment property is to approve a “Sale and Purchase Agreement” and place a deposit, normally 10%, into your representative’s trust account.
When the settlement takes place, as the purchaser, you should receive:
Three primary Transfer of Lease deeds previously administered by Vendors, Copy of Registered Title, Settlement Statement, current Property Tax receipt, current Land Rent receipt, Tenancy Agreement (if applicable), Company Documentation (if applicable).
Be Patient. Breathe.
Real estate is cyclical. Sometimes there are long durations between a hot and cold market, so be patient. The beauty of investment real estate is the asset backing your investment. The exit strategy can always be put together creatively, and options exist for refinancing. Given enough time, prices will rise. Be patient.
Often it takes between one and three months to complete a transaction. A particular transaction may come with conditions which could lengthen that.
Where do smart start-ups go? Vanuatu has become the go-to place for entrepreneurs in search of a business friendly environment. Contact Vanuatu Unified Services today and you can start accelerating your business growth tomorrow.