The Man from the Shop

Silver Point is much more than a superb real estate development on the magnificent Silver Sands beach on the southern coast of Barbados, it is a unique investment opportunity for the savvy investor who is looking much farther than a ‘home in the sun.’

Many overseas investors fail to fully appreciate all the challenges of property investment in the Caribbean, not least the main reason why they are buying. Worse still, they often act on impulse, or solicit the advice taxi drivers, bar and hotel staff when it comes to looking at investment opportunities while on holiday. It doesn’t take Einstein to work out the potential risks with this strategy!

Buying a second home has become fashionable, profitable and practical for a whole new generation of potential buyers in recent times, and while the Caribbean remains a favorite haunt for the rich and famous, it has also attracted a wider overseas market of middle income earners, lured by the attraction of high capital investment returns, good rental income, currency advantages, excellent product, government incentives, stable governments, and idyllic natural tropical environs.

There is always a delicate balance between buying a second home for investment and buying a second home for personal use, and therein lies the dilemma that creates the biggest challenge for the investors that want both. In an ideal world that may happen, but if you are investing purely for investment returns then you have to look very seriously at what happens to your property when you are not in occupation. Yes, it is terrific to snap up a great bargain and you will certainly get a lot of enjoyment from your second home when you are there for 2 to 4 weeks of the year, but if you want your asset to appreciate and income to be generated from the rest of the year, you will certainly need a good rental agent and property management company to look after your interests, as it won’t happen by accident. These services come at a cost to you the owner.

Silver Point goes a long way to meeting the needs of the astute investor, the thinking purchaser who looks a little farther down the line and assesses the investment from all angles. The Silver Point project is the complete transformation of the former Silver Rock Hotel into 85 freehold units that are being sold to individual owners with a proviso that they must put them back into the rental pool. There are no exceptions as Silver Point will be marketed and managed as an upmarket boutique hotel and owners will have six weeks usage throughout the year. Any additional time will be available at preferential rates, and those six weeks usage can be transferred.

Amongst the project’s amenities are beachfront location, two excellent restaurants, spa, fitness suite, shop, two pools, watersports facilities and a host of other services associated with an upmarket hotel operation. Compare that to a conventional condo development with perhaps limited pool and sporting facilities, and little else. But Silver Point goes much further for the savvy investor as the business model is built around the principle that all costs associated with each owner’s unit are absorbed by the rental pool, and the profits distributed equitably amongst all the owners depending on the level of the initial investment into the project. In that respect each unit has a profit allocation that remains constant and each unit receives the net profit from that allocation.

The rental company is an independent company separate from the unit owners although subject to performance review, and operates through a levy comparable to industry standards. All financial statements including the allocation of profits have to be published and distributed within 30 days of the end of the financial year. In addition unit owners looking to maximize their rental income will have other significant benefits;

1 A sizeable marketing budget to promote the operation
2 A professionally managed boutique hotel operation
3 Refurbishment at no individual cost
4 On site 24/7 property management of their investment
5 No hidden or unforeseen costs
6 Continual improvements to enhance the hotel operation

Many overseas owners worry about periods when the property is not rented, and potential damage from perhaps a bad tenant, maintenance or weather, but Silver Point handles all these concerns. The owners also have the possibility of an upgrade during their stay as all hotels can deliver different level of hospitality. The restaurant, spa, fitness suite and other associated amenities will be provided under separate business entities and unit owners will have no liability or risk for their operations.

For those who have not been to Silver Sands beach it is one of the most beautiful in Barbados, and the most popular coastline for windsurfers and kitesurfers. Silver Point is located at the eastern end, and the lower level beachfront units sit over ten foot higher than the beach. All beachfront units have spectacular views and all guests will have the additional luxury of a huge deck for sunbathing beside the pool, a two tier restauran, bar and swimming pool overlooking the beach, and 24 hour security.

Silver Point is not timeshare, fractional ownership or buy-to-let. It is a hybrid of conventional property ownership with many innovative features that enhance the potential for capital growth and investment return, while reducing many of the risks associated with normal over seas property purchase.

Silver Point is a superbly upgraded villa hotel operation and is due to complete in mid 2007. There are 85 units, half of which were sold by the start of the year, and Block E containing 15 garden units has been operating as a small hotel since late 2006. This gives prospective visitors and potential buyers an opportunity to evaluate the quality of the finishes, see at first hand the rest of the development unfold, and perhaps sample the excellent cuisine and hospitality. Sales staff are on site to provide information and site inspections, and with price points starting at US$200,000 there is no better value in the Caribbean market!

For the savvy investor the best way to evaluate the Silver Point investment opportunity is to list the most important things they want from their investment, look at how many of these points are offered by Silver Point, and then compare the analysis with any other development or property purchase.

Silver Point may not be for everyone, but it is certainly the choice of the savvy investor!