- BARBADOS’ NEW 12-MONTH VISA
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Do you own a property in Barbados, and are you considering renting it out for the long term? If yes, you will be pleased to know that the Barbados real estate rental market has become very active, especially since the launch of the 12-Month Barbados Welcome Stamp visa. The stock listings rent out quickly, even faster when the property is fully furnished and equipped.
This article provides answers to some of your questions, such as:
• Which real estate market is my property most suitable for?
• Barbados or the foreign market?
• Should I rent my property out furnished or unfurnished?
• What should be my asking price?
Here are some helpful tips to guide property owners in Barbados to choose the right real estate company for the job and get a tenant.
CHOOSING A REAL ESTATE COMPANY
Choosing the right real estate company requires much more effort than you think. You’ll be setting yourself up for problems by randomly selecting a real estate company from simply scrolling through the yellow pages or newspaper ads. Make adequate research to ensure that the company specializes in the target market most suitable for your property. Check their websites and social media pages to view some of their recent transactions, and read reviews from previous clients. If your property is more so suited for the foreign market, make sure the real estate company has an international reach.
It’s very important that the real estate agent you choose to hire has a Barbados real estate license and is a member of The Barbados Estate Agents and Valuers Association (BEAVA). The Association has over one hundred and twenty members, which increases market visibility. Your property would have a chance of getting rented even faster.
The real estate commission fee for long-term rentals in Barbados is one month’s rent, subject to VAT if your agent is VAT registered.
We, at Global Estate Agency been in the real estate brokerage business for over 15 years. Our clientele includes both local and expat renters who rent properties in Barbados. From our modern and user-friendly website to our impressive social media following. We also have international reach via our sister company BarbadosExpatHomes.com which focuses on luxury expat rentals. Our brokerage is led by Junior Sparks, who appeared on not one, but two episodes of HGTV’s popular top tv show, House Hunters International!
WHAT DOES THE LISTING PROCESS IN BARBADOS ENTAIL?
After you have decided on the real estate company/agent to hire for the job, they will set up a listing appointment to tour your property. The appointment is to gather marketing details, including photos and video. Start from the general details and work your way down to the specifics, such as:
• Would you accept young kids?
• Indoor or outdoor pets?
• No pets at all?
• Is smoking prohibited?
The more details you confirm with your agent, the better so your agent could focus only on the prospective renters that are suited for your property.
While the agent is touring your property, you could review the listing agreement and complete same once you agree with all the terms. It’s usually either an exclusive or non-exclusive listing agreement. An exclusive listing agreement is where you would list your property with one agent, and external agents will still have access to the listing, but all showings and negotiations must happen via your agent. The landlord agrees to pay a commission to the agent once the property is rented. The non-exclusive listing agreement is where you could list your property with as many agents as you like. The latter option doesn’t guarantee that your property would get rented faster. It means more work for you, keeping track of all the agents’ marketing, making sure that there is no misinformation about the marketing details.
MARKETING YOUR PROPERTY
It is best to hire a real estate company that has a website. A good online presence will increase your market visibility so, consider listing your property with a real estate company that has an active and huge following on social media platforms. Also, your agent can use multi-listing websites to provide additional traffic. Lastly, give your agent approval to put up a for-rent sign or banners at strategic locations because not everyone is internet-savvy.
SHOWING YOUR PROPERTY TO RENTERS
Make your property attractive to potential tenants. Carry out corrective maintenance in the building, including power washing of the driveway, re-painting, updating of fixtures, and general cleaning. An attractive property with lots of open spaces tends to get list price or close. Be ready to assist your agent in whichever way you can to make sure showings go smooth. Open up windows and pull back the curtains to keep the property well-aired and lighted.
REVIEWING PROSPECTIVE TENANTS
All prospective tenants must complete a tenant screening form and submit the same along with their photo IDs. The tenant screening form includes the submitted offer, the rental duration (start to end date), job details, professional references, and current landlord information. Additional details to fill may include questions about pets or kids.
TENANT APPROVAL AND SIGNING OF THE RENTAL AGREEMENT
If you don’t already have a rental agreement, your real estate agent would most likely have a draft copy on file, or you should consult with a Barbados attorney to get a rental agreement drafted. Rental agreements usually are for one year or more, but in some cases could be shorter. The rental agreement should be sent to the tenant for review via your agent. Once the tenant has agreed to all the terms and conditions, the tenant can sign the document and return same to your agent, who would arrange for you to sign.
INITIAL PAYMENT OF THE FIRST MONTH’S RENT AND SECURITY DEPOSIT
After the rental agreement is executed, the tenant has to pay the first month’s rent plus security deposit or, in some cases, the first and last months’ rent plus security deposit. The deposit is dependent on the terms of the rental agreement. The tenant can make payment to you or your agent. If the brokerage company receives the payment, they could deduct their commission fee before paying you.
UTILITIES TRANSFERS AND PROPERTY HANDOVER
If utility bills aren’t included in the rent, utilities transfer letters should be provided to the tenant so the tenant could transfer the electricity, telephone/internet, cable tv, etc into their name. However, in some cases, the tenant would provide the authorization form from the particular utility company, and you will have to sign the form for approval.
An inventory list should be signed off if the property is being rented furnished, usually as an appendix to the rental agreement.
As of May 2021, the VAT rate is set at 17.5%.
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