Puerto Rico is situated in the Caribbean and lies between the Virgin Islands and the Dominican Republic. It is a defined non incorporated territory of the United States of America. Even though it has its own constitution, it is for all practical purposes a part of the US. People born in Puerto Rico are American citizens. Known as the ‘Isla del Encanto’ or the Island of Enchantment, Puerto Rico has similar real estate and property laws as exists in mainland US. Being an island nation, Puerto Rico is 100 miles by 25 miles and is a home to more than four million people. With land being very limited, property prices tend to swing upwards most times.
If you are looking to investing in Puerto Rico real estate, it is advised that you know the current situation of the real estate market. Currently the Puerto Rico real estate is grappling with the after effects of the sub prime crisis in mainland United States. This is not surprising since the market behaves very similarly to the mainland. Though the market has witnessed a slow down, it has not witnessed the kind of property devaluation the US has experienced. In most parts of Puerto Rico the property valuations have remained more or less stagnant. In the capital city of San Juan, the cost of a four bedroom home was $ 357,500 in 2007. Its present value now is $ 329,750. This reflects the fact that the valuations have not changed by much even though the number of homes sold have come down quite drastically.
Even a small island place like Vieques could not escape from the property meltdown. The prices have fallen by 15 to 20% during the past couple of years. This has shown signs of recovery during the current year with people looking for a good bargain. Situated away from the mainland, Vieques is a good investment option for those who are looking to get away from the madding crowds of the cities. You can also opt for a vacation home in the Culebra Island or the towns of Isabella and Rincon.
Investing in Puerto Rico real estate has no restrictions. Foreign buyers can invest in real estate. All the laws that are applicable to the locals are also equally applicable to the foreigners. In Puerto Rico, both Federal Law as well as the Puerto Rican law is applicable. However, the funds that are used to buy property in Puerto Rico must be certified as income from legal sources.
For those who are looking for real estate investments, there are plenty of opportunities with the Government offering tax credits to boost new investments. Real estate is regulated quite strictly with both federal as well as local laws. Though investing in real estate is quite easy, it is suggested that you hire a real estate agent locally. This is because most people speak Spanish and if you are not conversant with the language you may have a tough time.
The economy of this small island nation has been through some rough times during the past few years. Last year the overall economy of the island shrank by almost 5.5% and unemployment levels were as high as 15% adding more misery to the island’s fortunes. The real estate sector which was stagnant, has been witnessing a subtle change in fortunes during the past quarter. Some parts of the island have seen enquiries coming in from people looking to get a good bargain. If the same trend continues into the next quarter, then we can hope to see a resurgence of the real estate in Puerto Rico and those who invested now can earn good returns on their investments.