Best Caribbean Island to Invest in Real Estate 2025: Country Comparison Guide

Key Factors for Caribbean Real Estate Investment

When comparing Caribbean destinations, smart investors evaluate:

• Entry price: What does comparable property cost?
• Foreign ownership: Are there restrictions or extra taxes?
• Rental yield: What net return can you expect?
• Appreciation: Historical and projected price growth
• Property taxes: Annual holding costs
• Transaction costs: Fees to buy and sell
• Tourism demand: Rental market strength
• Infrastructure: Airports, roads, utilities
• Political stability: Rule of law and property rights

Caribbean Real Estate: Country-by-Country Comparison

Dominican Republic 🏆

Our pick for value investors

• 2BR oceanview condo: $180,000-$350,000
• Foreign ownership: Same rights as citizens, no restrictions
• Annual property tax: 1% of value above ~$170,000
• Transfer tax: 3%
• Net rental yield: 8-12%
• 5-year appreciation: 35-50%
• Tourism: 10+ million visitors (Caribbean's #1)
• Verdict: Best value, strong yields, easy ownership

Bahamas

• 2BR oceanview condo: $500,000-$1,500,000
• Foreign ownership: Permit required for properties over $500K
• Annual property tax: 0.75-2% depending on value
• Transfer tax: 2.5-10% (scaled by value)
• Net rental yield: 4-7%
• 5-year appreciation: 15-25%
• Tourism: Strong, luxury focused
• Verdict: Premium market, lower yields, high entry cost

Turks & Caicos

• 2BR oceanview condo: $600,000-$2,000,000
• Foreign ownership: No restrictions, but 60% stamp duty on foreigners
• Annual property tax: None
• Transfer tax: 6.5-10% stamp duty
• Net rental yield: 5-8%
• 5-year appreciation: 30-40%
• Tourism: Luxury market, Grace Bay world-famous
• Verdict: Ultra-premium, no property tax but high entry costs

Puerto Rico

• 2BR oceanview condo: $350,000-$800,000
• Foreign ownership: U.S. territory—no restrictions for Americans
• Annual property tax: 0.5-1.0% (lower than mainland U.S.)
• Transfer tax: Minimal
• Net rental yield: 5-8%
• 5-year appreciation: 25-35%
• Tourism: Growing post-recovery
• Verdict: U.S. legal framework, Act 60 tax benefits, mid-range pricing

Jamaica

• 2BR oceanview condo: $250,000-$600,000
• Foreign ownership: Allowed but requires license for over 1 acre
• Annual property tax: Low (under 1%)
• Transfer tax: 5% transfer tax + 4% stamp duty
• Net rental yield: 5-8%
• 5-year appreciation: 20-30%
• Tourism: 4+ million visitors
• Verdict: Mid-range pricing, strong tourism, some bureaucracy

Cayman Islands

• 2BR oceanview condo: $600,000-$1,800,000
• Foreign ownership: No restrictions
• Annual property tax: None
• Transfer tax: 7.5% stamp duty
• Net rental yield: 4-6%
• 5-year appreciation: 20-30%
• Tourism: Cruise and luxury focused
• Verdict: Tax haven benefits, very high prices, lower yields

Barbados

• 2BR oceanview condo: $400,000-$1,200,000
• Foreign ownership: Allowed, requires registration
• Annual property tax: 0.1-0.75% (relatively low)
• Transfer tax: 2.5% + legal fees
• Net rental yield: 4-7%
• 5-year appreciation: 15-25%
• Tourism: British and European focused
• Verdict: Stable, mature market, premium pricing

Why the Dominican Republic Wins for Value Investors

Price Advantage

The same $300,000 that buys a modest condo in the Bahamas or Turks & Caicos purchases a premium oceanview 2BR in the Dominican Republic's best locations.

Yield Advantage

With lower acquisition costs and strong tourism demand, Dominican Republic properties deliver 2-4% higher net yields than most Caribbean competitors.

Growth Advantage

As the Caribbean's fastest-growing tourism market with 10+ million annual visitors, the DR offers strong appreciation potential as infrastructure and awareness continue growing.

Ownership Simplicity

No foreign ownership permits, no additional taxes for foreigners, and a straightforward purchase process make the DR easier to navigate than many alternatives.

Infrastructure

Eight international airports, modern highways, fiber internet, and quality healthcare create a mature foundation for property ownership and rental operations.

Which Caribbean Destination Fits Your Profile?

Cash Flow Focused Investor

Best choice: Dominican Republic

• Highest net rental yields in the Caribbean
• Strong year-round tourism demand
• Low operating costs

Capital Preservation / Ultra-High Net Worth

Best choice: Turks & Caicos or Cayman Islands

• Stable, liquid markets
• No property tax (TCI, Cayman)
• Premium asset class

U.S. Tax Optimization

Best choice: Puerto Rico

• Act 60 tax incentives
• U.S. legal jurisdiction
• No passport/visa needed for Americans

Balanced Lifestyle + Investment

Best choice: Dominican Republic

• Affordable enough to actually use
• Rental income covers costs
• Great lifestyle amenities

First-Time International Buyer

Best choice: Dominican Republic or Puerto Rico

• Straightforward process
• English widely spoken
• Lower financial commitment

Risk Comparison

Hurricane Risk

All Caribbean destinations face hurricane risk. The Dominican Republic's north coast (Sosúa, Cabarete, Puerto Plata) is partially protected by mountain ranges and historically sees fewer direct hits than eastern islands.

Political Stability

The DR has maintained stable democracy and property rights for decades. Some other Caribbean nations have experienced more political volatility.

Currency Risk

• DR: Dominican peso; most real estate transactions in USD
• Puerto Rico: USD (no currency risk for Americans)
• Bahamas, T&CI, Cayman: Pegged to USD
• Jamaica: JMD fluctuates against USD

Liquidity Risk

Larger markets (DR, Puerto Rico, Bahamas) offer better liquidity. Smaller islands may have longer selling times.

Explore Dominican Republic Investment Opportunities

The data is clear: for value-focused investors seeking strong yields and appreciation potential, the Dominican Republic offers the Caribbean's best risk-adjusted returns.