3 Tips to Consider When Purchasing a Vacation Home
So, you are in the market for a vacation home, congratulations! Purchasing a vacation home is a huge accomplishment that can be very rewarding. Deciding if this is something you can make happen takes a lot of time and serious evaluations; however, now that you have done that part you can move on to the actual researching and purchasing part. This part may sound great on paper but trust us when we say it can be just as stressful if not more so. This is because there are tons of factors that go into choosing a vacation home. You want to make sure that this is a place you are going to see yourself going to in 5 to 10 years from now. Granted, we can’t predict the future, but you should feel confident that this is a place you will continue to value in the future. Trust us when we say you do not want to regret buying this home. At Island Property Group we have all of the tips worth considering when you are taking this next step. We know this is a big decision and want you to enjoy it for years to come.
Choose the Location and Home Wisely
This tip is by far one of the most underrated pieces of advice we can give you. Most people hear this and think that any vacation home on an island will make them happy in the short and long term. While yes, you will never hate your vacation home and the gorgeous island it’s on, you may have some regrets over the years though. This can come when you realize the island doesn’t have activities you enjoy or the home is just too small for you and your loved ones. If you are thinking of having more kids then consider that, or if you like golf and the island doesn’t have any courses then consider that. When you buy this home you need to consider your future self and whether you will enjoy it just as much as you do now. The thrill of the process can be blinding right now and that’s why we recommend taking a step back and thinking more into this tip. This is the place you are going to be making memories at, and will probably be stuck with you for years to come. Selling a home is not quick or easy enough to be blasé about this decision.
Rent the Home First
When you go to the mall and shop you usually try on the clothes before you purchase them, right? Well, vacation homes should be treated the same way. Before you purchase your home you should book a short vacation in the exact home and try it out. This is the best way to know if you truly love it or the idea of it. Just seeing photos of the island and the home are not enough to know if you will enjoy the experience of actually vacationing there. We also recommend bringing along some family or close friends on this trip to get their opinion as well. Sometimes we are so excited that we do not always see everything in front of us, asking others for their opinions will help you see the big picture.
Choose your Budget
This part of the process is one that needs to be stressed way more. Just like your everyday life home you are going to want to choose a budget for your vacation home. It’s important to keep in mind that just because this is a vacation home does not mean normal home problems do not happen. You are going to have the occasional maintenance issue that will cost money. There will also be other fees you may have to pay depending on where you live too. These are all things you are going to want to have money set aside for. You also will want to furnish it and decorate it the way you want, an expensive process in itself. This is another expense that isn’t always considered or at the forefront of our minds when purchasing a new home.
If you are considering a vacation home but are unsure of what to consider when purchasing one give our team a call. Our staff here at Island Property Group want to make sure that you are making all of the correct decisions when going through with purchasing your island home. This has the potential to be the best decision you have ever made, which is why we want to help you so it can be. Give us a call today at 1-407-361-5604 to learn more about our services.
Frequently Asked Questions
What should I consider before buying a vacation home in the Bahamas?
Three factors carry most of the weight. First, location — proximity to an international airport matters more than buyers anticipate. Nassau, Exuma, Abaco, Bimini, and Eleuthera have direct US flights; most Out Islands require a connection through Nassau. Second, total carry cost — in addition to the purchase price, budget 8% to 11% in closing costs, annual property tax of 0.75% to 1.5% of assessed value, hurricane-inclusive insurance (often 1% to 3% of replacement value), HOA fees, and property management if absentee. Third, rental intent — if you plan short-term rentals, the property must be registered with the Department of Inland Revenue, requires a Business License, and must collect both 10% VAT and 10% Hotel Guest Tax from guests.
Can I rent out my Bahamas vacation home when I'm not using it?
Yes, and it’s common. Short-term rental income from a Bahamas vacation home is not subject to Bahamian income tax, but several compliance requirements apply. All short-term rental properties must be registered on the Department of Inland Revenue’s portal (registration is free). Foreign owners must obtain an annual Business License regardless of revenue. Operators must collect 10% VAT and 10% Hotel Guest Tax from guests and remit monthly or quarterly to the DIR. Peak-season occupancy in well-located rentals can exceed 75%, with Hope Town, Exuma, Bimini, and Central Eleuthera submarkets reporting average daily rates above $500 per night in late 2025 AirDNA data.
How much should I budget beyond the purchase price?
The hidden costs of vacation home ownership in the Bahamas are substantial. Closing costs total 8% to 11% of purchase price. Annual property tax runs 0.75% to 1.5% of assessed value for investment/rental properties (capped at $150,000 for non-owner-occupied under the RPT Amendment Act No. 43 of 2025). Homeowner insurance with hurricane coverage ranges widely, with some Out Island policies historically quoting over $9,000 per year for modest homes and coverage without hurricane inclusion. Property management typically runs 10% to 20% of gross rental revenue. Factor utilities, HOA fees where applicable, and maintenance into your carry pro-forma before committing.
How long does it take to buy a vacation home in the Bahamas?
A typical purchase closes in 60 to 90 days once an offer is accepted. The process runs: offer accepted → deposit held in the attorney’s escrow account (typically 10%) → title search conducted by buyer’s attorney → International Persons Landholding Act registration prepared → conveyance drafted and executed → VAT stamp applied → final registration with the Registrar General. Cash transactions move faster than financed ones; Bahamian bank financing for non-residents is available but limited, which is why most foreign buyers purchase in cash. Working with an attorney who handles international transactions routinely is essential — the IPLA registration step is where most delays happen.