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The Caribbean island of Margarita is the property investment opportunity of the century. Tourism has increased by 40% in the past two years, bringing visitor numbers up to 2 million per year. Yet only 15% of the island is developed, creating a massive under-supply of rental accommodation for the burgeoning tourist masses. This makes it an excellent opportunity for buy-to-let and holiday home investors.

It's no wonder tourism to Margarita is growing so rapidly; it has absolutely everything going for it!

• The only Caribbean island outside the hurricane belt


• Low cost of living (and holidaying)


• Tax & duty free zone


• It has warm and sunny climate all year round with very little rain


• Gorgeous sandy beaches, warm turquoise waters


• Wide variety of activities including snorkelling among tropical marine life


• Breathtaking mountainous forest landscapes


• 15% development, the rest is the beauty of nature in a tropical environment


• Direct flights from the UK

Tourism will be boosted yet more when the new Formula One track, approved in March this year becomes a reality. Holiday home investors are attracted by all the above of course, but also the aforementioned under-supply, and the fact that Margarita property is up to 50% cheaper than any other Caribbean island - though that is, I'm sure, an attraction to everyone, as is the growth potential of Margarita property, as Liam Bailey, head of international research for DSR explained:

"While Margarita continues on its present path to becoming one of the foremost tourism destinations in the world, property values will increase massively, for instance: a property could be worth anywhere up to 50% more on the resale market that it was bought for off-plan, almost immediately after building work ceases. Annual capital appreciation will not fall below 30% for at least the next 5-7 years, and could even frequent the 40-50% p.a. zone over the next 1-3 years.

"Rental yields are currently quite high at around the 10% mark," continued Bailey "because of the under-supply and the low property prices, and could actually fall as capital appreciation races, and the under-supply becomes less severe. Of course yields won't fall on off-plan properties, because prices tend not to grow as quickly for off-plan properties, but people selling on the resale market will likely be doing so with the promise of rental yields of 6-8% -- until the market levels out at any rate, at which point yields on resale properties may rise slightly."

One of the biggest benefits of Margarita for property investors is its taxation regime, total round-trip transaction costs are a mere 2.5%, as you only need to pay for the solicitor, and there is no Capital Gains Tax when you sell either - it's actually a struggle to find reasons not to invest in Margarita.

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