Aside from buying a property early in your career, then renting or liquidating it for retirement income, there are numerous ways to make money from real estate.

These include home construction and sale, developing and holding rental properties, buying and refurbishing properties for resale, offering agency services - including property management - and taking a cut from the direct sale of homes belonging to others.

Buying property and holding with the expectation that values would increase in the medium and long term, has been one source of sure profit locally.

The website, Jamaica-real-estate.net, points out that over the last two decades, the value of real estate has soared by almost 100 per cent in some communities, especially in St Catherine.

higher real-estate prices

Population increases usually translate into higher Jamaican real-estate prices in this and other areas. Researchers at this site note that if you bought a $400,000 Portmore, St Catherine, house in 1994, by 2004, that same property was valued at J$1.2 million - a 300 per cent increase.

In 2006, the value was just under $1.5 million, all based on the great demand for homes in the dormitory community.

Gina Harrison, Kingston manager of the realty company Coldwell Banker, suggests several other ways in which one can profit from real estate.

Buy it, improve it and sell it

You can buy a house and then do improvements, such as a new roof, room extensions, new carpeting, landscaping and paint, which add to its value, before selling it again for a good bit of money in your pocket.

Beware, however, as Harrison pointed out, the market is now relatively stiff in terms of price movement, and you may improve and find yourself unable to recoup your investment.

Additionally, the cost of selling houses in Jamaica - taxes charged on purchase and sales - might wipe out your expected profit.

Harrison says that the inventory of lower-end properties which can be improved and sold for a tidy profit is not large in Jamaica.

You will have to do your own research and then be your own construction manager, tiler, painter and carpenter in order to see a decent return.

Rentals

Rentals are often a dependable source of income, but with high interest rates and high mortgages you might find yourself only able to cover mortgage costs.

While everyone wants USD rentals, not all areas will bear this price.

Not everyone is cut out to be a landlord and you will have to bear the burden of maintaining the house, as well as screening for the right tenants.

Vacation rentals

If you have bought a property which you think vacationers may enjoy in terms of its proximity to the beach and other attractions, you may list your villa with an international firm, which will market it and may also provide agent services in terms of looking after the property, booking guests and seeing to their needs.

You may also create your own website. Harrison notes that marketing is critical to accessing this hard-currency income stream.

It is noteworthy that many local properties are listed as vacation rentals on craigslist.com - the free international property and classified advertising site.

Property management

Managing property entails soliciting lessees and renters, collecting rent and the maintenance of property. Do you know anyone who needs someone to work as an agent and landlord? A collection of such properties, including a few villas, could result in a tidy source of income.

Property development

Property development, Harrison says, is a game for dedicated investors with the money to hire professionals to do the job of creating new residential communities and commercial centres.

These persons, she states, would expect to get 100 per cent return on the cost of land and other inputs between the time of purchase and the sale of completed units.

You will need architects, structural engineers, and many other construction professionals, as well as approval from parish councils and other planning regulatory agencies.

This is not a pursuit for a hobbyist.

If you cannot resist the temptation of 100 per cent returns in the approximately two years it would take to execute such a development, start small, Harrison advises, and stick to unit sizes/locations which are in demand.

Demand exists in the lower end of the market but is not so good in the high end now.

Pre-construction deals

You may buy a unit from a developer today at $18 million, with the expectation of appreciation by the time the unit is ready in two years. Harrison notes that two years ago this was possible, but it may be less so in today's less-active market.

Real-estate funds

These are investment products offered by brokerage houses and to an extent, by local insurance companies which invest in developments and feed profit back to those who contributed to the fund.

Sagicor Life Jamaica, the company behind the Winchester commercial/residential centre in Kingston, says this was one project from which their investors benefited significantly.

Sagicor is a life-insurance company, but owns a property-management firm.

Direct sales

Real-estate professionals earn five per cent of real-estate sales if they work by themselves, but they share this amount with their company if they are attached to an office.

Such an individual will need to be certified and also be prepared to pay all their personal expenses in the average six months that sales tend take to be executed in Jamaica.

While theoretically, sales should take 90 days, it might be close to half a year before you see a pay check. Be prepared also to network heavily in order to build up your clientele and get constant referrals.

avia.ustanny@gleanerjm.com

Increases in Property Values in Jamaica

1998 to 2008

Residential 43 per cent

Commercial 68 per cent

Agricultural 33 per cent

Industrial 39 per cent

Source: Jamaica-real-estate.net