Barbados
My attempted move to Barbados hardly started out on the right foot. I set two alarms to make sure I didn’t miss my morning flight out of JFK and what do you know, neither of them went off. I sprang out of bed as the light peaking over the tops of the Brooklyn villas hit my face and scrambled around the house simultaneously making sure I had thrown all my life’s possessions in my one bag and apologizing to the Yellow Cab service for missing the car they sent. I gave the cabby an extra twenty bucks to step on it and off we went speeding through the streets of New York. I couldn’t miss this flight, I had two associates that had come just in order for us to fly down together and direct flights to Barbados are few and far between. My cab raced to the front and I ran to the gate to be greeted by a woman who seemed to already be having a bad day despite it being 6:30 in the morning. I arrived at the check-in counter exactly one hour before my flight, but was told that I was too late. No exceptions to the rules I was told. I begged and pleaded and even offered her an expediting fee to get my bag on the plane, but she refused. It seemed this arbitrary rule they had just made the week before was absolutely impossible to bend. My only choice was to pay another $75 and take a standby flight to Miami. This would turn my five hour non-stop flight into an all-day affair. Feeling completely defeated I gave in. As I sat down for my horrendously wasteful, day my spirits were quickly uplifted. A curly haired Bajan (short for Barbadian) girl sitting a few seats down had the exact same problem as me. After some good conversation and a visit to the bar in Miami International the day didn’t turn out to be a waste at all.
Life in Barbados
Barbados is a tropical paradise on the south easternmost tip of the Caribbean. It includes all the things you would expect in a Caribbean island: turquoise water, rum and palm trees. Popular activities to pass the time are fish fries, horse raises and surfing. Don’t try kite flying though, it is prohibited in most areas because of low flying aircraft and can land you in jail for two years and fined $100,000. Like many Caribbean islands the beaches are populated by tourists, however, they are not crowded. If you are looking for a quiet tropical getaway without a lot of partying and loud music, this is the place for you. While there are some spots with pretty good dance clubs on the weekends, if you want a place to party, I would recommend many other islands over this one. Many of the visitors here are what the locals call “snowbirds”; Canadian and British retirees who come down to spend the winter. They love it here because of the golf, beaches and low crime. The infrastructure is good and there is decent shopping, plenty of golf courses and a nice yacht club.
There are several good sites to visit. One is the nature reserve where you are surrounded by all sorts of animals and there are at least a hundred monkeys that you can touch and feed (which would be completely illegal in the US). Another great place to visit is the house where George Washington lived on his one and only trip outside of the US (and supposedly where he lost his virginity). You also can walk through the old plantation houses and see where a slave named Bussa organized a Rebellion of 400 men in 1816. This was the first large slave rebel- lion and it ultimately led to the slavery emancipation of the West Indies. The struggle for freedom here has always been one without ethnical boundaries. The first slaves here were white Englishmen who had been deemed enemies of the crown; there was even a phrase in England in the 1600s “to be Barbadoed”. Once on the island, whether they were English or African, the slaves were bought and sold for around 10 pounds sterling ($5,000 US in today’s dollars). While race relations are good, beware that tourists have a giant money sign on their back as far as the locals are concerned. They’re not rude, but they will try to hustle you and even rip you off if you’re not careful.
Economy
The cost of living in Barbados is a little more than you may expect from a Caribbean island. You can expect to pay between $2- 3,000/month to rent a nice single family home close to the beach, of course you can pay much more than this depending on your taste. They have plenty new properties, fully furnished with nice new appliances. You can get around with taxis and buses for a while but if you plan on living here you will definitely need a car because most things are not within walking distance. This is one of the major drawback of the island, car rentals are around $35/day and to buy you are looking at about double that of most other countries. Food prices can be expensive when buying imported brands but if you take your time to find the local foods and non-tourist restaurants you won’t do bad. Every day you can find people on the side of the road selling plates of homemade food for around six dollars. I have made a table comparing the food prices between Harris Teeter in the US and Supercentre in BarbadosAs you can see imported products are highly taxed. The government of Barbados really takes full advantage of their captive audience. I don’t think they’ve ever seen a tax they didn’t like. Although they are duty happy, they’re rated fourth highest in the South and Central America/Caribbean region by the index of economic freedom. Predictably, because of this, they have one of the highest per capita GDPs in the region at $21,800. They use the Barbados dol- lar, which is pegged to the US dollar two to one. The supposedly non-existent inflation has definitely been making its mark here, especially on food and gas.
The ridiculous policy of a 17.5% VAT on everything but books and salad has backfired enormously. For a lot of people food is a big part of their budget and all they can afford to buy is cheap unhealthy food. The top income rate is 35% and the corporate rate is 25%. There are tariffs for practically everything from a standard 15% to 30% on electronics to 60% on cars (also the car has to be less than four years old and have less than 30,000 miles). I was heartbroken to find out that Amazon refuses to deliver most things to Barbados to avoid getting tangled up in the red tape. One thing that is cheap however are the buses. If you don’t mind getting up close and personal with the locals and jammin’ to some reggae music, one dollar will get you the next city over.
There is plenty of room for growth here for business. Harley Davidson seems to be doing well; they have two stores and are opening a third this year. There is a delightful place called Limegrove that has only been up and running for about a year now. It is an outdoor mall with all the top clothing and jewelry brands you would expect from a high class mall. There are plenty of good restaurants and a specialty grocery store that has all the delicious coffees, wines and food that make life worth living. The Caribbean bar inside the mall is a great place for some classy Bajan nightlife and at a cost of only $10 for three Coronas it’s well worth the price. The Caribbean Bar is a great place to “lime” (“hang out” in Bajan) but my favorite is La Casa del Habano, the Cuban cigar and rum bar. They have a decent selection of cigars and rums, great seating in or outdoors and very friendly young staff. You can actually partake in the insane activity of smoking a cigar and drinking rum at the same time without watching over your shoulder for the pleasure police. Limegrove seems to be looking good even though it still classifies in the “new shiny thing” category. We’ll see if it has the customers to last. I hope so.
Another promising prospect is the American World Clinics plan of building a five star hospital with a large capacity for medical tourism. There are not any definitive plans yet, but they have made it clear that it is their intention to get started.
The Four Seasons started building a resort with a one hundred room hotel and 35 villas, but the project was stopped in its tracks three years ago. The developer underestimated how much capital he would need and turned to the government for a loan guarantee. This has now morphed into a bail- out where the developer is trying to convince the government to hold the debt and also get them to buy equity in the project with the national insurance pension fund. The whole thing is a big mess and who knows how it will work out in the end.
Whether you’re looking for a cash flowing asset or a well-priced beach front summer home, Barbados may have exactly what you are looking for. There are no restrictions to buy property on foreign nationals or permanent resident and there are no capital gains or inheritance taxes.
There are plenty of beautiful properties on the market at decent prices. Many people in the market feel that there is an overstock of apartments and a lot of appreciation shouldn’t be expected in the near future.
I would agree that there is a bit of excessive supply in the general market, but, as always, there are specific sub sectors that could deserve a closer look.
Holiday rentals here offer an extraordinary return. There are only a select few places that are close enough to all the amenities to be truly “va- cation rentals” and the influx of retirees are only growing. Also, high-end homes and apartments, especially beach front, seem to be in a position to do very well. I have heard predictions from veterans in the market here that appreciation in these markets could be anywhere from 7-10% this year.
I have composed a graph showing returns in the last year on three separate properties. The first is in the south, which is not quite as up- scale but still popular. The other two are in the west, which is the more upper class tourist destination. The first two are apartments and the last is a villa. As you can see, in the south coast you can achieve around a 5% return while in the west you may only get 3%. Neither is bad, but the decision would come down to whether the prestige of owning in a more high-class area is worth that extra 2%. All of these numbers are the listed prices so I’m sure if you were interested you could come and get an even better deal than that. Bajans have no problem with a bit of negotiation.
From my analysis, I would say there is plenty of opportunity to get into the market down here. They are not dirt cheap, but they offer decent return, and the market seems to be on an upswing in certain sectors. Also, remember even if you get fed up with renters, you’ll still have a beautiful beach front place in Barbados you could give to your kids tax free. I can help with contacts upon request.
As far as immigration goes I will give you my personal story first. On the Barbados Immigration website it says you can stay for six months on a tourist visa, which I confirmed at the embassy in New York. I arrived at the airport and was surprised when they only gave me a thirty day visa. A week later I went to the immigration office with the other two guys I was traveling with to file for an extension, which they told me over the phone would be no problem. After paying $50 for what I was thinking was going to be a pretty painless process I was brought unto an interrogation room where the conversation went a little something like this:
“How long would you like to extend your visa?”
“Five months”
“Five months? Won’t you need to find a job in that time?”
“No, I have plenty of money to cover my expenses for my stay here”
“You’re too young to have savings, you’re going to need a job. You’re going to have to file for a work visa”
“No, I’m not going to be getting a job in Barbados but I will be creating jobs by spending money while I am here on vacation”
“We take older people from Canada and England over 60, we don’t have accommodation for people like you. I’m sorry but you will have to leave when your current visa expires.”
“OK, well can I have my passport back.”
“No, we’ll give it back when we see your departing plane ticket.”
So there I was in Barbados stuck with no passport (add another to the list of reasons to have a second slave card), three more weeks on my villa rental and a week before I had to find some other place to go. It turns out that despite the stated policy of a six month tourist visa, it is completely at the discretion of whatever Neanderthal happens to be sitting at the window at the time.
But the story doesn’t end there. Once we got our tickets we went to get our passports back. Once again I thought it would be a painless process and once again I was sadly mistaken. When we arrived at the immigration office we were escorted downstairs into a waiting room. They said someone would be right with us. “Right with us” turned out to mean three hours later, during which time there where two other people coming in and out that didn’t want to talk and always seemed to be on the verge of tears. I had no idea what was going on and finally I had had it. We walked out of the room, got our passports and we left. This whole affair is not out of the ordinary, the immigration department has a reputation for being bothersome especially for young people.
The policy of Barbados states that all you need is a valid passport, proof of personal support and a return plane ticket for a stay up to six months. In order to get permanent residency you need to have some work, dependence or business interest in the country. Finding a job is not an easy task, the job market is dry and citizens get much higher precedence when there are openings. Once your there for five years on a immigrant visa you can apply for permanent residency. Honestly I think it is hard to say what you could or could not get away with. The arbitrarily nature of the immigration system is definitely a negative on the integrity of the government as a whole, but I have to admit that this probably never would have happened if I was of retirement age. The bottom line is if you are planning on staying for more than a month I would recommend getting a lawyer which will run you around $200 an hour.