Owning in Aruba - pros and cons

[Andrea J.]

annf awesome posting/information!!

[Aruba4ever]

Just some great info! I have read about a horror story or two with long term rentals so that is smart to stay away from- thanks. I also can appreciate everything Robin mentioned about the services Prestige provides.

Our forum members provide great info! Enjoy the day.

[schexc]

Hi all,

We have seriously considered buying a house in Aruba, hoping to spend a couple of months there during winter, working remotely. We are looking specifically at houses, as they seem like better value vs condos. The major problem I have trouble getting over is that the market is extremely opaque. Unlike here in the states, there's no MLS so it's impossible to see recent sales, trends, etc. You are essentially at the mercy of realtors - not a great position to be in... It does seem like real estate prices on the island are in decline, and properties have been sitting on the market for months. And yet sellers aren't jumping at lowball offers either. Perhaps everybody is just trying to wait out the pandemic...

So, a few questions for Aruba property owners out there:

1. Based on your observations, by how much have property prices declined year-over-year? If that's too broad of a question, we are looking at 3-bed/2-bath houses in Noord (Opal, Rooi Santo, etc). What would be a fair price range for those, assuming decent condition with need for some cosmetic repairs?
2. What are the carrying costs for a house of that size, on top of land lease fees and property taxes? For example - insurance, trash removal, water, gas, electricity? If there are examples out there with and without a pool, that'd be awesome.
3. Is it feasible to manage ownership of a house in Aruba remotely, visiting perhaps a couple of times a year? For example, I've seen posts on this forum about paying utility bills in cash in person, repairs taking forever, and so on. What other challenges and inconveniences of Aruba property ownership have you encountered? Any government-related challenges - inspections, tax forms, and such?
4. Is it generally safe in Aruba to lock up the house and leave it unattended for months at a time? Or does everybody hire a property management company to periodically check in on things?

Thank you,
T

We can not answer specifically to a free standing house, as we have a condo, but some general similarities do apply.

1. We purchased pre-construction in early 2017. Since then, we have not experience depreciation, only appreciation.

2. A house owner could better answer this one. Our feeling is that it is all relative. We live in NYS, so taxes property taxes and insurance are inexpensive in comparison, drastically. Keep in mind, that not only the size of the property but construction material can raise the cost of running the A/C. Our condo is masonry, with no sheetrock. When we close the unit down, everything is turned off, sheetrock finish requires that the A/C be left on to eliminate moisture and mold. Split inverter A/C units also make a large difference. We do rent our unit and our water and electric utility costs for the last three years has averaged $730.00 annually. Out trash pickup, internet, pool maintenance and propane for the public grills are included in our HOA, which is very reasonable.

3. We have a management company that is onsite. Any repairs in our unit that need attention have been addressed very quickly.

4. As annf stated...in the proper neighborhood, you'd have better results when leaving a property unattended, however, while we were looking at properties initially, it was advised against.

5. We would do it again in a heart beat. Best of luck!

[robin]

Yes, taxes are very low compared to home(southern part of NJ). The rate we pay at home for electric and water is much lower. The rate per kw hour for electric in Aruba is more than double what we pay at home. Our electric is high because #1 we have large sliding doors that face the ocean 2. Oceania is being billed at a commercial rate for electric which they are now currently fighting Elmer. We only have a small amount of drywall(in our laundry area)-we learned that when we tried to hang up pictures-we need a concrete bit on a drill to do that. We do run our AC while we are not here at a higher temperature to keep it from getting musty. We also have an electric washer and dryer and hot water heater. We have a 2 bed 2 bath unit.

What I said about appliances, was what I was told. We bought 4 years ago and had to replace the washer and dryer about 3 years ago which were less 10 years old and not a great quality. The other appliance are okay. However, the previous owners had replaced the AC and we had to do the same. The outside units go much faster than at home, however; when I owned a condo at the shore near us, the AC units had short life spans compared to our home 30 miles away.

While we are on Eagle Beach, it is fairly quiet. I love being able to see the water, watch people using the walking/jogging/biking path and out my front door I have a view of the island. I am close to Super Food and Lings.

BTW, depending on where you buy, especially a home, you need to check to see if it has hot water. A lot of the older ones do not have it. Even when we bought this they only had a 19 gallon hot water heater in it. We upgraded it to a regular sized one.

I love Aruba and would not want to be anywhere else.

[tigi]

Appreciate all the ongoing responses!

Seems like leaving the house unattended is a huge no-no, which makes perfect sense. Come to think of it, I wouldn't leave a place unattended for too long here in NJ either... We actually explored property management services, like Aruba Home Minders and Aruba Villa Vacation Homes, which charge $200-300/mo for their services. Will probably reach out to Alan at Prestige as well... Perhaps that's something we'd have to consider, if we decide to move forward with the purchase.

The potential problem I see is with off-season rentals. Our vision has been to buy a place and spend Dec-Feb (roughly speaking) in Aruba working remotely. So of course that would strip away most of the rental income potential. But even setting that consideration aside, if off-season rentals are weak, the place would effectively sit empty most of the remainder of the year. And like Robin said - a property manager may check on things weekly, but burglars are smart and can easily figure out when to strike. I guess that explains the premium placed on condos in gated communities...

Anyway, what has everybody's experience been with off season rentals?

[Andrea J.]

I have a comment, but I am not a homeowner/condo owner in Aruba.
The slower season in Aruba is typically not that slow.
If your property is near the water that increases your prospects for getting renters.
2 bedrooms is more popular for renters.
Tourist renters for a week or 2 or 3 are the best..........long term renters, not so much. If they choose not to leave when it is time, even after notice is given, as long as they pay the rent they can continue to live there. We know of someone who got stuck with a tenant for a couple of years who would not leave.
It was a nightmare.

And then..............
I think everyone will tell you not to count on rental income.
Many income property owners are really having hard times due to Covid19.

I am happy that you are getting opinions from those that "know much"

Appreciate all the ongoing responses!

Seems like leaving the house unattended is a huge no-no, which makes perfect sense. Come to think of it, I wouldn't leave a place unattended for too long here in NJ either... We actually explored property management services, like Aruba Home Minders and Aruba Villa Vacation Homes, which charge $200-300/mo for their services. Will probably reach out to Alan at Prestige as well... Perhaps that's something we'd have to consider, if we decide to move forward with the purchase.

The potential problem I see is with off-season rentals. Our vision has been to buy a place and spend Dec-Feb (roughly speaking) in Aruba working remotely. So of course that would strip away most of the rental income potential. But even setting that consideration aside, if off-season rentals are weak, the place would effectively sit empty most of the remainder of the year. And like Robin said - a property manager may check on things weekly, but burglars are smart and can easily figure out when to strike. I guess that explains the premium placed on condos in gated communities...

Anyway, what has everybody's experience been with off season rentals?

[robin]

For us it varies from year to year. We don't need to rent, so what we get, we get. It is usually a week or two a month in the of season. When we see we have large gaps between renters, we usually have a few things maintenance items done if they were not done while we are here.

What area in NJ doing you live?

[schexc]

Appreciate all the ongoing responses!

Seems like leaving the house unattended is a huge no-no, which makes perfect sense. Come to think of it, I wouldn't leave a place unattended for too long here in NJ either... We actually explored property management services, like Aruba Home Minders and Aruba Villa Vacation Homes, which charge $200-300/mo for their services. Will probably reach out to Alan at Prestige as well... Perhaps that's something we'd have to consider, if we decide to move forward with the purchase.

The potential problem I see is with off-season rentals. Our vision has been to buy a place and spend Dec-Feb (roughly speaking) in Aruba working remotely. So of course that would strip away most of the rental income potential. But even setting that consideration aside, if off-season rentals are weak, the place would effectively sit empty most of the remainder of the year. And like Robin said - a property manager may check on things weekly, but burglars are smart and can easily figure out when to strike. I guess that explains the premium placed on condos in gated communities...

Anyway, what has everybody's experience been with off season rentals?

We also, like Robin and Stu, did not buy to earn rental income, but we both rent.

The off season for us, is generally slower. Fortunately, being close to the hospital has worked well in the off season, as our management company has a relationship with them. We will get medical professionals and students, that will rent months at a time or more. It is a reduced rate, compared to vacation rentals, but it generates income and keeps the unit occupied. It is generally one person, that just wants a place to lay their head and relax from a long day. They respect the utility usage and our considerate of our furnishings.

It would stand to reason, that ownership closer to the water, would be more attractive to vacation renters in the off season, as rental rates are generally lower and vacancy rate is higher. Robin and Stu's unit is a good example, our unit is a quarter mile inland, with no water view.

[Andrea J.]

BUT, your unit/complex is a straight shot to the beach.
no hills to climb or numerous crossing busy streets.
1 straight shot and that is a good thing.

I forgot that your place was so close to the hospital.
It is good that the management company has a good relationship with the hospital.

We also, like Robin and Stu, did not buy to earn rental income, but we both rent.

The off season for us, is generally slower. Fortunately, being close to the hospital has worked well in the off season, as our management company has a relationship with them. We will get medical professionals and students, that will rent months at a time or more. It is a reduced rate, compared to vacation rentals, but it generates income and keeps the unit occupied. It is generally one person, that just wants a place to lay their head and relax from a long day. They respect the utility usage and our considerate of our furnishings.

It would stand to reason, that ownership closer to the water, would be more attractive to vacation renters in the off season, as rental rates are generally lower and vacancy rate is higher. Robin and Stu's unit is a good example, our unit is a quarter mile inland, with no water view.

[schexc]

BUT, your unit/complex is a straight shot to the beach.
no hills to climb or numerous crossing busy streets.
1 straight shot and that is a good thing.

I forgot that your place was so close to the hospital.
It is good that the management company has a good relationship with the hospital.

Yes, an easy walk, which is another reason why we still have fairly good vacation rentals in the off season, under normal conditions. During the pandemic, the hospital had filled the voids nicely.

The management team is aggressive and actively look for alternative tenants. When the refinery was being refurbished, the property was renting to the engineers, but that ended awhile ago.