A Brief Guide to Buying Your Dream Vacation Home in Puerto Rico

Buying Your Dream Vacation Home in Puerto Rico

Dreaming of owning a vacation home where you can escape to paradise? Puerto Rico, with its stunning landscapes, vibrant culture, and tropical beauty, offers a perfect setting for your dream getaway. Whether you envision a beachfront retreat or a lush mountain hideaway, buying a vacation property in Puerto Rico can be an excellent investment. Here are some benefits of purchasing a vacation home in Puerto Rico as well as some valuable insights into the process.

1.     The Appeal of Puerto Rico's Vacation Home Market: Puerto Rico, known as the "Island of Enchantment," entices buyers with its year-round warm climate, breathtaking beaches, and rich history. As a U.S. territory, it offers the advantage of using the U.S. dollar as its currency, eliminating the need for currency exchange. Furthermore, Puerto Rico's tax incentives, including Act 20 and Act 22, attract investors seeking favorable tax benefits and financial opportunities.

2.     Choosing the Perfect Location: When it comes to buying a vacation property in Puerto Rico, location is paramount. The island offers a diverse range of regions, each with its unique appeal. For beach lovers, areas such as Rincon, Vieques, or Dorado offer magnificent coastal properties and opportunities for beachfront living. Those seeking a tranquil mountain retreat may consider properties in areas like El Yunque Rainforest or the Cordillera Central. It's essential to explore different regions, considering factors like proximity to amenities, accessibility, and the lifestyle you desire.

3.     Evaluating the Investment Potential: While your vacation home should provide a personal haven, considering its investment potential is crucial. Puerto Rico's thriving tourism industry creates opportunities for rental income when you're not using the property. Searching Google for keywords like "Beachfront Properties on Vieques," "Vieques Investment Properties," and "Vieques Vacation Homes" highlight the market potential of this specific location. Analyze the demand for vacation rentals, consult your Paraiso Realty agent, and research rental rates to make an informed decision.

4.     Finding Your Ideal Vacation Property: Once you've determined the location and investment potential, it's time to start the search for your dream vacation home. Paraiso Realty can guide you through the process, provide insights into local regulations, and help you find properties that match your preferences and budget. Utilize online platforms, attend open houses, and visit Puerto Rico to get a firsthand experience of potential properties.

5.     Key Considerations for Vacation Home Buyers:

*Location Amenities: Consider the proximity to attractions and amenities that initially drew you to Puerto Rico. Whether it's pristine beaches, hiking trails, or lively downtown areas, ensure your vacation property is conveniently situated to enhance its appeal to future renters.

*Property Size: Assess the number of bedrooms and overall space based on your personal needs and the potential rental demand. More bedrooms provide versatility and may command higher rental rates, but keep in mind the associated maintenance and cleaning costs.

*Homeowners Association Rules and Local Regulations: Research any restrictions on rental properties imposed by homeowner associations or local municipalities. Ensure your chosen property aligns with your rental plans and meets all legal requirements.

*Accessibility: Evaluate the ease of travel to your vacation home, considering the proximity to airports or major transportation routes. Convenience is essential for both personal use and managing the property when you're not there.

*Property Management: If you live far from Puerto Rico, hiring a caretaker or property management company is advisable. They can oversee regular inspections, handle maintenance issues, and ensure your property is well-maintained, giving you peace of mind.

6.     Financial Considerations:

*Consult a Tax Advisor: Puerto Rico's unique tax incentives, such as Act 20 and Act 22, offer potential advantages for investors. However, tax regulations can be complex. Seek guidance from a tax advisor who specializes in Puerto Rico to understand the tax implications of owning a vacation property and any potential benefits you may be eligible for.

*Financing Options: Explore financing options available for purchasing a vacation home in Puerto Rico. Interest rates and down payment requirements may differ from those for primary residences. Research local lenders, mortgage brokers, and banks to find the most suitable financing solution for your needs.

*Insurance Coverage: Protect your investment by obtaining homeowners insurance for your vacation property. Research insurance providers that offer coverage in Puerto Rico, taking into account the property's location and any specific risks associated with the area. Adequate insurance coverage will provide peace of mind and protect you against unexpected events.

*Property Management Costs: If you plan to rent out your vacation home, budget for property management costs. Engaging the services of a professional property management company will ensure efficient management, regular property inspections, and handling of rental logistics. Research local property management companies and obtain cost estimates to include in your financial planning.

7.     Making an Informed Decision:

*Due Diligence: Before finalizing a purchase, conduct thorough due diligence on the chosen property. Engage the services of a professional home inspector to identify any potential issues or necessary repairs. Review the property's title and legal documents to ensure a smooth and transparent transaction.

*Negotiation and Closing Process: Work closely with your Paraiso Realty agent to negotiate the purchase price and terms of the transaction. Once an agreement is reached, engage an attorney to assist you with the closing process, including reviewing contracts and ensuring all legal requirements are met.

*Ongoing Property Management: Once you've acquired your vacation property, establish a plan for ongoing property management. If you live far away, enlist the services of a reputable property management company to handle day-to-day operations, maintenance, and guest relations. Regularly communicate with your property manager to stay informed about the property's performance and address any concerns.

Investing in a vacation property in Puerto Rico offers a unique opportunity to own a piece of paradise while potentially generating rental income. By considering location, investment potential, financial aspects, and key considerations for vacation home buyers, you can make an informed decision that aligns with your goals. Remember to consult with Paraiso Realty Broker, conduct thorough research, and seek professional guidance throughout the process. With careful planning and due diligence, your dream of owning a vacation home in Puerto Rico can become a rewarding and profitable reality.

Wealthy Homebuyers are Flocking to Puerto Rico: Per WSJ

Wealthy Homebuyers are Flocking to PR: Per WSJ

The Wall Street Journal published an article this morning as to why wealthy homebuyers are flocking to Puerto Rico. A link to the article is down below. For those that don’t have a subscription, here is a synopsis:

Wealthy homebuyers are increasingly attracted to Puerto Rico due to favorable tax policies, warm weather, and the rise of remote work. This has transformed the island into a full-time destination for high-net-worth individuals. Luxury housing market in Puerto Rico is booming, with investors and developers capitalizing on the growing demand for high-end homes. Tax incentives, known as Act 60, play a significant role in driving the surge in the market. These incentives allow individuals and corporations relocating to Puerto Rico to enjoy tax benefits, such as not paying federal income taxes on income sourced in Puerto Rico. The requirement to own a home on the island has further fueled the buyer pool. The island's warm climate, coupled with the adoption of remote work and low cost of living, has accelerated the trend of wealthy individuals buying primary and vacation homes in Puerto Rico.

The luxury housing market has seen several notable deals, including a $40 million home sale, setting a record for the island. Dorado Beach Resort, a wealthy enclave on the north shore of the island, has experienced a significant increase in median sale prices for homes priced above $1 million. Other areas, such as Condado, Bahia Beach, and Palmas del Mar, have also witnessed rising prices.

The tax benefits offered by Puerto Rico have attracted wealthy individuals, including crypto entrepreneurs and hedge funders, who have the flexibility to move their businesses. The island's tax policies have transformed it from a place people wanted to visit to a destination for wealthy homebuyers seeking an incredible lifestyle and tax savings. The tax benefits introduced in 2012 have led to an increase in the number of individuals granted tax-exempt status under Act 60. However, the number dropped in 2022 due to the crash in the crypto market.

Early movers who took advantage of the tax benefits include crypto investor Michael Terpin, who relocated to Puerto Rico from Nevada in 2016. Terpin has seen the formation of a crypto community on the island and has found Puerto Rico to be a welcoming place with ample networking and business opportunities. Other individuals, such as business coach Christian Mickelsen, have also embraced the island's tax benefits and resort lifestyle.

Real estate investment has surged in Puerto Rico, with investors capitalizing on the booming market. Some aspirational sellers have listed their properties at high prices, taking advantage of the increased demand for finished homes. Local builders and developers from the mainland U.S. are racing to construct new homes to meet the growing demand.

Puerto Rico's Top 5 Walkable Neighborhoods (and 5 with Potential)

Puerto Rico's Top 5 Walkable Neighborhoods (and 5 with Potential)

Walkable neighborhoods are in high demand throughout the world, as more and more people prioritize the benefits and convenience they offer. Puerto Rico offers a range of walkable neighborhoods that provide residents with the perfect blend of convenience, cultural experiences, and access to amenities. Living in a neighborhood with a high walkability score offers numerous advantages, including improved health and well-being, convenience, environmental sustainability, social interaction, and financial savings. Let's explore the top walkable neighborhoods in Puerto Rico and some with the potential for further development.

Puerto Rico, with its vibrant culture and rich history, is home to several neighborhoods that score high on walkability. They all have the ingredients for healthy walkable neighborhoods with nearby parks, cultural experiences, retail stores, grocery options, and popular bars and restaurants. Walkability scores provide an objective measure of how easy it is to accomplish daily errands without a car. Factors considered include proximity to amenities, access to public transportation, street connectivity, and pedestrian infrastructure. The higher the walkability score, the more walkable and convenient the neighborhood is deemed to be.

Here are the current Top 5 Walkable neighborhoods in Puerto Rico:

Old San Juan

1.     Old San Juan: (Average Walkability Score: 98) Old San Juan, the historic heart of the capital city, is renowned for its picturesque cobblestone streets and colorful colonial architecture. With a near-perfect walkability score of 98, it epitomizes urban charm and accessibility. Residents can wander through the narrow streets, discovering enchanting plazas, boutique shops, and delightful cafes. Parque de las Palomas, a serene oasis with stunning views of the ocean, and Parque de Armas is ideal for people watching and sipping a cup of coffee. For a cultural experience, Castillo San Felipe del Morro, a UNESCO World Heritage Site, stands as a testament to Puerto Rico's rich history. The Museo de las Americas hosts permanent and temporary exhibits worth visiting, as does the Museo de San Juan. Popular retail stores include boutique clothing stores Pure Soul Boutique and Collective Request, and of course everyone’s favorite discount store, Marshalls. SuperMax is the go-to grocery store for everyday necessities, located right on Plaza de Armas, while La Factoria and La Lanterna are among the favorite bars and restaurants in the area.

Miramar

2.     Miramar: (Average Walkability Score: 94) Miramar combines the charm of a residential neighborhood with the convenience of urban amenities. With a high walkability score of 94, Miramar offers an abundance of parks and recreational spaces, including the popular walking path around Condado Lagoon and the Parquecito de Miramar. The neighborhood boasts a vibrant arts scene, with the Puerto Rico Conservatory of Music, the Museum of Art and Design, and Caribbean Fine Arts movie theater adding to its cultural allure. For retail therapy, Plaza Las Américas, the largest shopping mall in the Caribbean, is just a short distance away. La Hacienda and Supermercado Pueblo cater to grocery needs, while Melanzana and the Rare 125 offer exceptional dining experiences.

Santurce Sur

3.     Santurce Sur: (Average Walkability Score: 92) Santurce, known for its eclectic atmosphere, is a hub of artistic expression and creativity. With a walkability score of 92, this neighborhood offers a lively urban experience. As a cultural hotspot, Santurce is home to various art galleries and museums, such as the Museum of Contemporary Art of Puerto Rico. The Mercado Santurce provides an array of retail options, including fresh produce and artisanal goods. For grocery shopping, Econo and Pueblo are popular choices. La Placita de Santurce is a must-visit for its vibrant nightlife and renowned restaurants like Santaella and Vianda can be found nearby.

Condado

4.     Condado: (Average Walkability Score: 89) Condado, located in the heart of San Juan, is a bustling neighborhood known for its upscale residential areas, beautiful beaches, and vibrant nightlife. With an average walkability score of 89, Condado offers a blend of urban convenience and beachfront allure. Parque Ventana al Mar provides a lovely green space and a perfect spot for outdoor activities. Luxury boutiques and designer stores line Ashford Avenue, catering to retail enthusiasts. Freshmart and Super Max are popular grocery stores, while trendy bars and restaurants like Jose Enrique, Kasalta, and Via Appia present an array of dining and entertainment options.

Ponce

5.     Ponce Historical Zone: (Average Walkability Score: 88) Ponce Historical Zone, located in the city of Ponce, exudes historic charm with its well-preserved Spanish colonial architecture. Despite being the smallest neighborhood on our list, it boasts a respectable average walkability score of 88. The neighborhood is home to Parque de Bombas, a striking red-and-black firehouse turned museum, which serves as a cultural landmark. Plaza Las Delicias, the central square, is surrounded by shops, cafes, and the iconic Cathedral of Our Lady of Guadalupe. For retail needs, Plaza del Caribe offers a variety of stores. Super Max and Econo are the main grocery stores in the area. In terms of dining, Lola Eclectic Cuisine and Nispero Asador provide memorable culinary experiences.

While Puerto Rico already has several neighborhoods with high walkability, there are other areas that have the potential to further develop and improve their walkability. These cities and neighborhoods have the foundation to become highly walkable areas by implementing urban planning strategies that prioritize pedestrians, promote active transportation, and enhance the overall quality of the public realm. Let's explore five cities or neighborhoods in Puerto Rico that have the potential to become the next high walkability areas:

Rio Piedras

1.     Rio Piedras, San Juan: Rio Piedras, a district of San Juan, has the potential to enhance its walkability. It is home to the University of Puerto Rico and has a vibrant commercial center. By improving pedestrian infrastructure, expanding sidewalk networks, and implementing traffic calming measures, Rio Piedras can further encourage walking and create a more pedestrian-friendly environment. Current Score: 73

Hato Rey

2.     Hato Rey, San Juan: Hato Rey, another district in San Juan, is a major financial and business hub. While it already has some walkable areas, there is room for improvement. Enhancing pedestrian connectivity, creating more green spaces, and implementing complete streets policies would help make Hato Rey a more walkable neighborhood. Current Score: 87

Mayaguez City Center

3.     Mayagüez City Center: Mayagüez is a vibrant city on the western coast of Puerto Rico. Its city center has the potential to become a highly walkable area. By prioritizing pedestrian-friendly infrastructure, improving sidewalks and crosswalks, and revitalizing public spaces, Mayagüez City Center can create a more inviting environment for pedestrians and enhance its walkability. Current Score: 86

Caguas City Center

4.     Caguas City Center: Caguas, located in the central region of Puerto Rico, has a historic city center that can be further developed to enhance walkability. Investing in pedestrian-oriented infrastructure, creating shared-use paths or bike lanes, and improving connectivity between key destinations can transform Caguas City Center into a more walkable and attractive area. Current Score: 86

Bayamón Centro

5.     Bayamón Centro: Bayamón, a city near San Juan, has the potential to enhance the walkability of its central area. By improving pedestrian infrastructure, creating pedestrian zones or plazas , and increasing access to green spaces, Bayamón Centro can improve its walkability and create a more inviting environment for residents and visitors. Current Score: 82

These cities and neighborhoods mentioned above have great potential to become highly walkable areas in Puerto Rico. By focusing on urban planning strategies that prioritize pedestrians and promote active transportation, these areas can unlock their full potential and create more walkable and liveable environments.

Key Elements to be Considered Walkable

To enhance walkability, several key elements need to be considered. First and foremost, the development of pedestrian-friendly infrastructure is crucial. This includes well-maintained sidewalks, clearly marked crosswalks, and pedestrian-friendly intersections. Implementing traffic calming measures, such as speed bumps and reduced speed limits, can help create safer streets for pedestrians. Additionally, creating dedicated bike lanes or shared-use paths can encourage cycling as an alternative mode of transportation.

Green spaces and parks also play a vital role in enhancing walkability. Accessible and well-maintained parks provide residents with opportunities for recreation, exercise, and social interaction. Incorporating greenery and landscaping in urban areas not only improves aesthetics but also contributes to the overall well-being of residents. These green spaces can serve as gathering places for community events and activities, further fostering a sense of belonging and social interaction.

Another important aspect of walkable neighborhoods is access to amenities and services. The presence of grocery stores, retail shops, restaurants, and cultural venues within walking distance reduces the reliance on private vehicles for daily errands. Mixed-use developments that combine residential and commercial spaces can contribute to vibrant and walkable neighborhoods. By integrating a variety of amenities, residents can meet their daily needs conveniently and efficiently.

Public transportation also plays a significant role in enhancing walkability. Well-connected and accessible public transportation systems, such as buses or light rail, provide an alternative to private vehicles for longer journeys. Integrating public transportation routes with pedestrian infrastructure ensures seamless connectivity and encourages the use of sustainable transportation options.

Keys to Walkability Success

Community involvement and engagement are essential for the success of creating walkable neighborhoods. Engaging residents, local businesses, and community organizations in the planning process fosters a sense of ownership and ensures that the development aligns with the needs and desires of the community. Inclusive public spaces that accommodate people of all ages and abilities contribute to a more diverse and vibrant community.

Puerto Rico offers a range of walkable neighborhoods that provide residents with the perfect blend of convenience, cultural experiences, and access to amenities. The top five walkable neighborhoods, including Old San Juan, Miramar, Santurce Sur, Condado, and Ponce Historical Zone, showcase the rich history, vibrant culture, and unique characteristics of Puerto Rico. These neighborhoods offer residents and visitors the opportunity to explore on foot, discover local treasures, and engage with the community.

Moreover, cities and neighborhoods such as Rio Piedras, Hato Rey, Mayagüez City Center, Caguas City Center, and Bayamón Centro have the potential to become highly walkable areas by implementing urban planning strategies that prioritize pedestrians, promote active transportation, and enhance the overall quality of the public realm. By investing in pedestrian-friendly infrastructure, creating green spaces, improving access to amenities, and involving the community in the process, these areas can unlock their potential and create more walkable, sustainable, and livable environments for everyone to enjoy.

To find out the Walkability of your home or neighborhood, check out the WalkScore website to enter your specific address: www.walkscore.com .

Can I use a mortgage company from the continental USA to finance my purchase in Puerto Rico?

Can I use a mortgage company from the continental USA to finance my purchase in PR?

While it is possible for a US-based bank or mortgage company to provide financing for the purchase of property in Puerto Rico, there are some reasons why it may be more advantageous to use a mortgage company based in Puerto Rico.

Firstly, Puerto Rico has its own laws and regulations that govern the purchase and financing of property, and a mortgage company based in Puerto Rico will have a better understanding of these laws and regulations. This can be particularly important if you are not familiar with the local laws and regulations, as it can help ensure that your financing process goes smoothly.

Additionally, using a Puerto Rico-based mortgage company may provide access to financing options that are specifically designed for Puerto Rico. This can include programs that offer lower interest rates or better terms than what may be available from a US-based bank.

Furthermore, using a local mortgage company may also provide more personalized service, as the company will be familiar with the local real estate market and may be better equipped to provide guidance and assistance throughout the financing process.

At Paraiso Realty we have not recently seen any bank in the continental US finance a deal in Puerto Rico. While Puerto Rico is part of the US, it appears the US and PR banking systems treat each other as if they are separate international entities. While it is worth talking with your local lender in the US about purchasing a property in PR, we doubt they will finance a mortgage here for you.

We have had clients pull money out of their homes in the states with home equity loans, and then use that cash to purchase homes down here, however we have not had anyone use a US based bank to receive direct mortgage financing.

If you will need financing for your purchase in PR. We suggest lining up the financing ahead of time before starting your property search. Most real estate brokers in PR will require Proof of Funds or a PreQual letter from a lender before seeing any properties, so it is prudent to work on this due diligence in advance.

If you are looking for a PR based mortgage company, we have a few banks and names to recommend. When you first talk with them, feel free to let them know we recommended their services:

First Bank: Giulianna Perlloni, 787-307-3606

Oriental Bank: Alison Ramos, 939-282-0608

Cross Country Mortgage: Lawrence Johnson, 720-684-7141

Capital Mortgage: Maribel Rivera, 787-608-3545

Why work with Paraiso Realty?

A Trusted Realtor to Help You Find Your Piece of Paradise

Moving to Puerto Rico can be a dream come true for many people. With its beautiful beaches, warm climate, and vibrant culture, it's easy to see why so many are drawn to this Caribbean paradise. Whether you're interested in being a full-time resident, making the move to a new home, owning a vacation property, or you’re a Puerto Rican looking to move back to your motherland, there are plenty of reasons to make Puerto Rico your home. And when it comes to finding the perfect property, Bob Gevinski of Paraiso Realty is the go-to realtor in the San Juan, Dorado, Vieques, and Luquillo markets.

Sales of Puerto Rican real estate have been on the rise since Hurricane Maria and the COVID-19 pandemic. Many people have realized that they can work remotely from Puerto Rico and even have their children attend school remotely, making it an ideal place to live. With that said, let's take a closer look at why people move to Vieques and what makes San Juan such a vibrant place to live.

Why People Move to Vieques

1. Beautiful Beaches: With over 40 beaches on this small island, Vieques is a paradise for beach lovers. The beaches are often uncrowded, and many of them are secluded, making them ideal for a romantic getaway or a peaceful day with the family.

2. Nature at Its Finest: Vieques is home to a National Wildlife Refuge, which means you'll be surrounded by beautiful natural scenery, including mangroves, lagoons, and a bioluminescent bay.

3. Peaceful Island Life: Life on Vieques moves at a slower pace, allowing you to enjoy a more peaceful and relaxing lifestyle. With a small community of around 9,000 people, you'll quickly feel at home on this charming island.

4. Diving and Snorkeling: With crystal clear waters and an abundance of marine life, Vieques is a popular spot for diving and snorkeling. You'll have the opportunity to explore coral reefs, shipwrecks, and underwater caves.

5. Unique History: Vieques has a unique history that is deeply intertwined with its relationship with the United States Navy. You can learn about this history by visiting the Vieques Historical Archives or exploring the remnants of the old Navy base.

What Makes San Juan a Vibrant Place to Live

1. Cultural Diversity: San Juan is a melting pot of different cultures, which is reflected in the food, music, and art scenes. You'll have the opportunity to experience everything from traditional Puerto Rican cuisine to contemporary art exhibits.

2. Beautiful Architecture: San Juan's architecture is a beautiful mix of Spanish colonial, Art Deco, and modern styles. From the colorful buildings of Old San Juan to the sleek skyscrapers of Condado, there is no shortage of stunning architecture to admire.

3. Nightlife: San Juan has a vibrant nightlife scene that caters to all tastes. Whether you want to dance the night away at a salsa club or enjoy a quiet drink at a cozy bar, you'll find something to suit your mood.

4. Beautiful Beaches: San Juan is home to some of the most beautiful beaches in Puerto Rico, including the popular Isla Verde and Condado Beach. With crystal clear waters and soft sand, these beaches are perfect for swimming, sunbathing, and water sports.

5. Convenient Location: San Juan is the capital of Puerto Rico and is conveniently located near the airport, making it easy to travel to other parts of the island or to the mainland United States.

Whether you're looking to move to Vieques or San Juan, Bob Gevinski of Paraiso Realty is here to help. With his extensive knowledge of the Puerto Rican real estate market, he can help you find the perfect home to fit your needs and lifestyle. And if you're looking to sell your home, Bob can help you navigate the market and find the right buyer for your property.

When it comes to moving to Puerto Rico, there are a few things to keep in mind. First, it's important to understand the local customs and culture. Puerto Rico has a unique history and culture, and it's important to respect and appreciate this when living on the island.

Second, it's important to consider the cost of living in Puerto Rico. While the cost of living is generally lower than in many parts of the United States, it's important to budget accordingly and be aware of the local prices for goods and services.

Finally, it's important to work with a knowledgeable and experienced realtor like Bob Gevinski. Bob can help you find the perfect property to fit your needs and budget, and can guide you through the process of buying or selling a home in Puerto Rico.

Puerto Rico offers a beautiful and vibrant place to live, whether you're looking for a peaceful island retreat or a bustling city atmosphere. With its beautiful beaches, rich history, and vibrant culture, Puerto Rico truly has something for everyone. And with the help of Bob Gevinski of Paraiso Realty, you can find the perfect home to make Puerto Rico your own.

Basic info about CRIM, the property tax collecting agency in Puerto Rico

CRIM, the property tax collecting agency in Puerto Rico.

Puerto Rico is a beautiful country with a rich cultural heritage and a thriving real estate market. However, owning property in Puerto Rico comes with its own unique set of challenges, including the need to pay property taxes twice a year to CRIM, the agency responsible for collecting property taxes for the municipalities.

CRIM, which stands for "Centro de Racecaudacion de Ingresos Municipales," translates to the Center for Municipal Revenue Collection Center in English. Property owners in Puerto Rico are required to pay their property tax payments in July and January each year.

When buying or selling property in Puerto Rico, it is crucial to register the deed at the Registrar's Office and file a change of ownership form with CRIM. These two agencies are both part of the government but operate independently from each other. This means that they don't always communicate, unlike in many US states where the deed is filed at the same location where properties are assessed, and taxes are collected. Therefore, it is important to ensure that these agencies are notified of any changes in ownership by the notary handling the closing process.

Despite being a government agency, CRIM is not as proactive as one might expect. While it is responsible for property tax collection, its focus is on collecting revenue from San Juan or federal grants. As a result, most properties in Puerto Rico have not been assessed in over 50 years, making property taxes very low compared to what owners are used to in other parts of the world. Additionally, there are no separate taxes for fire departments, police, or schools, as all of the budgeting for these services comes out of San Juan, rather than the municipalities.

However, property owners are still responsible for notifying CRIM of any changes to their property that could increase its value. For example, if you add an extension to your existing building, install a pool or tennis court, or make any other capital improvements, you need to notify CRIM upon completion. Although it may take years for an appraiser to visit and reassess the property, the property owner's responsibility is to notify CRIM of any changes. Failure to do so can result in fines if CRIM catches the improvement without prior notification.

In summary, owning property in Puerto Rico comes with the responsibility of paying property taxes twice a year to CRIM and notifying them of any changes that may increase the property's value. While CRIM may not be as proactive as some may expect, it is still important to ensure that all necessary steps are taken to comply with the regulations. By doing so, property owners can enjoy the beauty and richness of their piece of paradise.

Tips for Driving in Puerto Rico

We came across a post on the PuertoRicoDayTrips website the other day, and can’t help but share the driving tips they gave for life in Puerto Rico. Defensive driving is always prudent, regardless in which country you find yourself. These tips fit right into that category:

Some examples of the typical bad driving habits you need to watch out for include.

• Most people don’t use blinkers/turn signals when changing lanes. They just do it … quickly!

• Even if someone’s turn signal is flashing, don’t necessarily believe it.

• We have a "no passing on the right" rule, but people will pass in any lane (including using the shoulder as a passing lane).

• We also have "keep right except to pass" and "left lane is the fast lane" rules. But people will drive slowly or very fast in any lane.

• Motorcyclists make their lane in between lanes by riding on the line. Be careful changing lanes.

• People make U-turns when they have a red light all the time.

• People push the yellow light and end up running the red lights! Be extra careful at intersections. Do not jump the green light until you know the other traffic is stopped.

• Be CAREFUL early in the morning. It seems that if no is using the intersection, people don’t bother stopping or waiting at red lights.

• Be very careful around curves on small mountain roads or on small roads that don’t have a lot of traffic. Local drivers who know the curves take their lane in the middle! Go slowly and toot your horn before going around a narrow curve in the mountains, and keep a driver-side window cracked so you can hear others do the same.

• The police drive around all the time with their blue lights on, so do not panic or pull over unless they turn on the siren.

• Often, people will cut you off and even block a lane if they need to get into traffic. They do not wait for an opening.

• People will stop suddenly and backup if they missed a turn or exit.

• Don’t assume which direction people are going by the lane they are in. If they are in the wrong lane, they will turn from the lane the are in. You’ll see people turn left from the right-most lane, and other people turn right from the left-most lane.

What would you add to their list?

Is it smart to buy a house in Puerto Rico?

Is investing in Puerto Rico right for you?

Puerto Rico is a beautiful island in the Caribbean that has long been a popular destination for tourists seeking sun, sand, and sea. With its warm weather, gorgeous beaches, and rich culture, it's no wonder that many people dream of owning a home in Puerto Rico. However, is buying a house in Puerto Rico a smart investment? We will explore the pros and cons of buying a house in Puerto Rico to help you make an informed decision.

Pros of buying a house in Puerto Rico:

• Lower cost of living

Compared to many other U.S. states, the cost of living in Puerto Rico is low. This can make buying a house more affordable, especially if you are on a tight budget. Additionally, property taxes in Puerto Rico are significantly lower than in most U.S. states.

• Tax benefits

One of the biggest advantages of buying a house in Puerto Rico is the tax benefits. The island is a U.S. territory, which means that Puerto Rican residents are subject to U.S. federal income tax. However, there are several tax incentives available to people who move to Puerto Rico, including Act 20, Act 22 and Act 60. These incentives can reduce your taxes significantly, making it a smart financial move for many investors.

• Beautiful weather and beaches

Puerto Rico is known for its beautiful weather and beaches. If you're looking for a place to retire or escape the cold winters up north, Puerto Rico might be the perfect destination for you. The island enjoys warm weather year-round and has some of the most beautiful beaches in the world.

• Cultural richness

Puerto Rico is rich in history and culture, with a unique blend of Spanish, African, and indigenous influences. The island's vibrant music, art, and food scene make it a fascinating place to explore and experience. Additionally, the island has many festivals and events throughout the year, celebrating everything from music and food to the arts and culture.

Cons of buying a house in Puerto Rico:

• Natural disasters

Puerto Rico is located in a hurricane zone and is prone to other natural disasters such as earthquakes. Hurricane Maria in 2017 was the most recent hurricane to cause problems throughout the archipelago. While the island is in the process of rebuilding and improving its infrastructure, natural disasters remain a potential risk for homeowners. Fortunately, with every storm, we learn what changes need to be made to better prepare ourselves for future storms. For this reason most homes now have generators, cisterns, and concrete structures.

• Property values

The real estate market in Puerto Rico can be volatile, with property values fluctuating significantly in recent years. While some areas have seen strong growth, like Dorado, San Juan, Palmas, and Rincon, other areas have remained flat.

• Infrastructure challenges

Puerto Rico has struggled with infrastructure challenges, particularly with its electrical grid and water supply. Many areas of the island experienced long power outages following Hurricane Maria, and the water supply can be unreliable in some areas. While the government is working to improve these issues, they remain a concern for homeowners. Creating a living space that is self-reliant on water and electricity has become a popular amenity.

So, is it smart to buy a house in Puerto Rico? As with any investment, there are pros and cons to consider. Puerto Rico offers many advantages to homeowners, including a lower cost of living, tax benefits, beautiful weather and beaches, and a rich culture. However, there are also potential challenges to be aware of, such as natural disasters, property values, and infrastructure challenges. If you're considering buying a house in Puerto Rico, it's important to do your research and consider each of these factors with the particular property and town that interests you most.

If you are interested in shopping properties in Puerto Rico, Paraiso Realty has a gallery of properties to consider. Click on the image on the below left to see our Residential and Commercial Options. the image on the right will take you to our Land options. We’ll gladly answer any questions you may have about either.

CLICK HERE TO SEE AVAILABLE RESIDENTIAL & COMMERCIAL LISTINGS

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Puerto Rico to hold hearings on short-term rentals, with focus on Zoning and Taxation

Starting February 1, 2023 there will be hearings regarding short-term rentals in Puerto Rico, and certain companies like Airbnb are already sending up warning flags about any radical changes. There is a general feeling that short term rentals are more lucrative for landlords, thus creating a shortage of long term rentals. One focus of the hearings will be whether short term rentals should be allowed in residential zoned neighborhoods. As reported in El Nuevo Dia this past week, Airbnb states that if Airbnb is outlawed in those areas, it will be detrimental to the economy of Puerto Rico. Here is a link to the article, which is in Spanish:

https://www.elnuevodia.com/negocios/turismo/notas/airbnb-advierte-que-desaparecerian-miles-de-alquileres-si-limitan-su-operacion-en-zonas-residenciales

Those that follow Puerto Rican politics think that the end result of these hearings is that homeowners will be allowed to rent out their residential properties as short-term rentals for 30% of the year. If they rent out for more than that percentage, they will then be considered commercial entities. Classifying the property a commercial entity opens new tax revenue for municipalities and the PR government, which ultimately is what the Puerto Rican politicians are most focused on. As to what this means from a zoning change basis, no one seems to know. The professionals we have spoken with think these hearings have more to do with reviewing current taxation and collection procedures.

Stay tuned.

How are interest rate hikes effecting the Puerto Rico Real Estate Market?

There is an interesting Opinion piece in today’s El Vocero newspaper about the current market cycle of real estate in Puerto Rico and the Fed’s interest rate hikes. Will the lack of new construction in Puerto Rico combined with other financial incentives mean we jump quickly from the contraction phase to the recovery phase? What is your opinion?

To read the Opinion Piece in Spanish, click here: EL VOCERO

Here is an English translation of the piece:

The recent rise of the Federal Reserve of half a point in interest rates, represents an increase in the mortgage interest rate that brought it from 7.75% to 8.5%. Similarly, the Federal Reserve also announced that further interest rate hikes could emerge in 2023, depending on economic conditions.

To contextualize this phenomenon, it will only be necessary to understand that the local real estate market is adjusting jointly to the stabilization of the economy. That is the response of the dimension of real estate within an integrated economy, which the Federal Reserve wants to avoid its recession after the inflation that the pandemic produced.

This phenomenon is tied to the well-known real estate cycle (Real Estate Market Cycle) which guides the behavior of the property purchase and sale market. This cycle is made up of four stages, namely: expansion, contraction, recession and recovery.

As we all know, at the moment there is little inventory of properties, vis-a-vis the demand of buyers in a scenario where the construction of new projects is limited.

In this way we identify that we are in the contraction stage. How does rising mortgage interest impact the real estate cycle? The answer to this is the essence of the transformation or advancement of the cycle, to oscillate from the contraction in which we find ourselves towards the recovery that we all expect.

To better understand the above, in practical terms in the contraction we see the limited inventory of properties for sale above market value. It is for this reason that it is sold with the condition of "not subject to appraisal"; which contrasts with the previous offer when there was an excess of inventory where we saw properties sold below market value, those that were advertised with a "negotiable price".

The above phenomenon is part of a natural process of the recessionary moment in real estate. This increase in property prices causes the need to increase interest rates. In this way, with the rise in mortgage interest, it affects the purchasing power of the buyer. This seeks to balance the market again and bring it to a midpoint where stability is to the benefit of the seller and buyer of properties.

In short, inflation is at its highest level in the last four decades. We have to see the rise in interest rates as a necessary remedy to contain said inflation, even if we don't like it.

On the other hand, the country is at a point of modulation in its economy with the support of economic variables such as reconstruction funds. Similarly, funds from the buyer assistance program is another variable that will help stabilize the economy. These two positive variables cancel the negative effect of the rise in mortgage interest. The foregoing would produce economic activity in 2023, which in turn would bring economic growth to advance the real estate cycle to the expected recovery stage. That should be the expectation of the real estate and mortgage industry, for the good of all.