Own a Piece of Paradise for Less Than You Might Think
The concept of privately-owned hotel rooms and suites has become increasingly popular around the world, both for a vacation property ownership as well as a sound investment strategy to generate reliable returns. Premium chains such as The Ritz Carlton and The Four Seasons offer individual investors the opportunity to purchase rooms and use them at their leisure, and then return them to the hotel's available room inventory when not in use by the owner. The owner then recoups a portion of the income derived from the hotel's renting of the room on a daily or weekly basis to vacationers or other guests.
The concept is not altogether new to the Turks & Caicos. Most of the resorts that line Grace Bay Beach are 'condo-hotels' in which rooms are individually owned and their rental operated by a management company. Visitors get the benefits of well-appointed rooms and suites that are more apartment-like than hotel; owners get the benefit of using their units whenever they wish, and getting a portion of the rental income generated when the units are rented.
Unlike more restrictive time-share models, this concept delivers a great deal of flexibility to owners, and historically in the Turks & Caicos, a very solid ROI thanks to the rapidly appreciating real estate market here, not to mention the tax advantages of investing in TCI.
The Grace Bay Beach area of Providenciales is in the midst of a development explosion that promises to maintain the Turks & Caicos position as the fastest growing tourist destination in the Caribbean. Grace Bay Suites offers competitively-priced rooms and is an attractive alternative to the higher-priced beachfront accommodations just a few hundred feet away. Its central location appeals to a complete range of tourists and makes it a viable short- and medium-term rental opportunity for the tremendous amount of construction, commercial and government activity that this area attracts.
The market for such properties in the TCI has traditionally been limited to very high end developments, with average prices approaching the $1 million mark. While this premium market offers investors attractive returns and appealing locations and amenities, the price tag is out of reach for many who wish to own a piece of paradise in the Turks and Caicos.
Grace Bay Suites: A new investment alternative
Grace Bay Suites is a new investment/ownership option in the Grace Bay area of Providenciales that combines the concept of individual hotel ownership with an affordable price. Located just a few hundred feet from its upscale beachfront cousins in the heart of Grace Bay, the 3-story property features 24 mid-range hotel-style studio and one-bedroom units. Each unit is offered for individual ownership with prices from $198,000 to $239,000.
Grace Bay Suites is operated by a professional management team and marketed as an affordable accommodation option for vacationers, business travelers and others who want an alternative to the $500+ per night room rates just across the street. Average room rates are in the $150-200 per night range at Grace Bay Suites. Based on similarly priced properties - of which there are few in TCI - and the increasing amount of tourist traffic in TCI, the developers forecast average annual occupancy rates to run well above 70%. The property is attractive to the group travel market such as dive charters, golf outings and business incentive trips. In addition, business and government-related travelers will favor the lower-priced alternative Grace Bay Suites provides with no compromise in location.
Individual ownership offers many benefits
Owners will own their units outright, guaranteed by the Crown government, with the entire property being strata-titled. They will receive 60% of all rental income generated from the rental of their property, and also have use of their units for their personal enjoyment. A small monthly maintenance fee - modest in comparison to the hefty fees saddled on owners of beachfront properties -- will cover general expenses such as landscaping, common area utilities, pool maintenance, etc.
By utilizing the tax advantages of a TCI-based structure, owners can effectively realize very solid returns. The developers of Grace Bay Suites, who also developed the popular Danny Buoy's Irish Pub, conservatively project short-term average annual returns in the mid-teens for investors, accounting for a few weeks of individual use by the owners. As the building boom on TCI continues, these rates could go up as the need for short and medium term accommodations will make Grace Bay Suites an attractive option for construction and management staff of the luxury developments across the street.
Location, location, location
Strictly on a real estate basis, Grace Bay has proven to be an excellent investment for buyers. Impressive historical appreciation rates, combined with the premier location of the property in the newly renovated and constant improving Grace Bay area, leave Grace Bay Suites well-positioned to benefit from the overall surge in real estate growth in TCI. Since owners will own their units outright, and have a well-documented rental history to showcase, re-sale of the units figures to be a very accessible option that holds the potential of additional excellent returns.
So despite its reputation as a high-end jet-set destination with only million-dollar plus properties available, TCI is about to expand its reach into the investment market with the availability of Grace Bay Suites as a mid-range ownership opportunity. Offering all the same benefits of ownership of luxury properties but without the high price tags and hefty monthly fees, Grace Bay Suites opens the potential of investing and owning in TCI to a new class of investor.