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View Full Version : Property in Aruba.. too good to be true?



Oliveira
06-20-2019, 08:56 PM
Hey folks. So I have a question to those of you who have hands on experience on the subject. We have been looking around on the web for properties, with a distant dream of one day living part time in Aruba.
Prices are all over... either silly low prices for run down places or much higher prices for new condos.. but still, when compared to our market (Toronto - Canada) most of the listings I see could still be classified as "somewhat affordable".. then I come across a listing like this :

https://remax-arubarealestate.com/property/details/irenestraat-8

So, several studios that could easily generate decent rental income, for under $400k. I have been to Aruba and stayed in a private AirBnB place, around $400/week.... lots of listings around that price. Assuming 50% occupancy, $400/week per unit would still generate some 15% ROI.

Why wouldn't everyone be all over a listing like that?

Im used to a housing market that can barely get 2% ROI... if you can get 4%, it is a miracle... but 15% ROI on "paradise" - seems too good to be true. So I MUST be missing something obvious.

Care to share your thoughts?

Andrea J.
06-20-2019, 09:38 PM
I think that the real estate taxes are something that you need to focus on and get some definitive figures.


Hey folks. So I have a question to those of you who have hands on experience on the subject. We have been looking around on the web for properties, with a distant dream of one day living part time in Aruba.
Prices are all over... either silly low prices for run down places or much higher prices for new condos.. but still, when compared to our market (Toronto - Canada) most of the listings I see could still be classified as "somewhat affordable".. then I come across a listing like this :

https://remax-arubarealestate.com/property/details/irenestraat-8

So, several studios that could easily generate decent rental income, for under $400k. I have been to Aruba and stayed in a private AirBnB place, around $400/week.... lots of listings around that price. Assuming 50% occupancy, $400/week per unit would still generate some 15% ROI.

Why wouldn't everyone be all over a listing like that?

Im used to a housing market that can barely get 2% ROI... if you can get 4%, it is a miracle... but 15% ROI on "paradise" - seems too good to be true. So I MUST be missing something obvious.

Care to share your thoughts?

schexc
06-21-2019, 06:50 AM
And don't forget to factor in personal use, if you plan on utilizing the property yourself.

robin
06-21-2019, 09:44 AM
I'd make sure it is permitted to have that many units. I'd ask to see how well the place is renting, not just someone telling me it's rented a % of the time.There are things you may not know, such as, how is the water pressure when all units are rented? What are the the utilities(electric and water is very expensive)? Does each unit have their own AC and hot water heater? These things do not last as long as in the US or Canada. Who will manage the property? Is there sufficient parking? Who will maintain the pool? Will you rent long term to locals or AirBB only or both? Don't forget the upfront taxes at settlement. I am trying to discourage you, just things to think about.

WaltVB
06-21-2019, 12:46 PM
I'm not sure if you looked up the location, but it's far from the beautiful white sand beaches of Druif, Eagle and Palm. It also states that it is not furnished. Folks on here can tell you how expensive that can be. It seems like it could be a money maker, but I am far from being in tune with the Aruban rental market.
But hey, if you can make it work, I wish you great success. :D

Andrea J.
06-21-2019, 03:57 PM
also too.............it is not on "owned land"........aka "property land"
the units are located on "lease land"

Aruba4ever
06-21-2019, 04:12 PM
Make sure you account for the taxes you will also have to pay on your rental income. I am reasonably sure the government will want a part of that for sure.

aquaman
06-21-2019, 04:47 PM
Make sure you account for the taxes you will also have to pay on your rental income. I am reasonably sure the government will want a part of that for sure.

They already do. At present 9% tourist tax and an environmental tax of $3/per bedroom used/per night. Also, if a cleaning fee is charged they add a tax to that as well.

schexc
06-21-2019, 06:12 PM
Depending on location, I would say that 50% vacancy is fairly accurate along 6-7% ROI.

lucky
06-22-2019, 07:04 AM
https://www.hotels.com/ho645990912/e-cas-di-zoe-studios-oranjestad-aruba/. This seems to be one of the apartments renting for $26.00 a day

Aruba4ever
06-22-2019, 11:55 AM
That is so inexpensive its kinda scary. After you account for taxes and paying someone to clean the place up I am not sure there is a ton of profit to be made at 26 daily.


https://www.hotels.com/ho645990912/e-cas-di-zoe-studios-oranjestad-aruba/. This seems to be one of the apartments renting for $26.00 a day

lucky
06-22-2019, 03:33 PM
That is so inexpensive its kinda scary. After you account for taxes and paying someone to clean the place up I am not sure there is a ton of profit to be made at 26 daily.
Thats nowhere close to $400.00 per unit even at 100% occupancy.And like you said after mortgage,insurance,taxes,utilities,etc. there’s nothing left

GETA62
06-26-2019, 02:00 PM
I'm not sure if you looked up the location, but it's far from the beautiful white sand beaches of Druif, Eagle and Palm. It also states that it is not furnished. Folks on here can tell you how expensive that can be. It seems like it could be a money maker, but I am far from being in tune with the Aruban rental market.
But hey, if you can make it work, I wish you great success. :D


Completely agree with WaltB. This is not a prime location.
Personally, I think this is better investment opportunity

http://www.daheraruba.com

and you can mentioned Aruba.com for special attention. :D