Why invest at buttonwood reserve?

The Financial Benefits of Ownership

The most common reason people have for investing in a vacation home in Eleuthera is the opportunity to enjoy your own slice of paradise in one of the most spectacular locations in all of the Caribbean. 

But what about the financial burden of indulging yourself this way? Isn’t a vacation home an expensive luxury, an extravagance you can’t afford?

Perhaps not.  You will be pleasantly surprised at the economics of ownership at Buttonwood Reserve.

1. From a short term perspective, owners at Buttonwood Reserve have found the ongoing cost of ownership at Buttonwood Reserve to be ZERO.

Since opening for vacation rentals eight years ago, the condominiums at Buttonwood Reserve have generated consistent positive cash flow for condo owners.  The reason is that the Buttonwood Reserve Rental Program has generated enough rental income for owners to cover more than 100% of their annual expenses, including HOA fees. 

Here’s how the Rental Program works:

• The program operates as a not-for-profit service on behalf of owners by the Homeowners Association. The HOA ensures professional oversight of  marketing, bookings, and property management.
  
  
  • For marketing and guest bookings, we have contracted with Eleuthera Vacation Rentals, the leading provider of vacation rental services on Eleuthera.  EVR is paid a 10% commission on all bookings.
  • Our onsite property management team delivers a high quality guest experience and handles housekeeping and unit inspections upon guest checkout.
  • Applicable expenses are deducted from rental revenue and 100% of the net proceeds are distributed to owners at the end of each calendar quarter.
    
    
• Over the eight years since Buttonwood Reserve opened for business, the program has had a strong track record of performance
  
  
  • Condos typically generate $60,000 to $70,000 of rental revenue per year. 
  • The net cash flow surplus after all expenses (including HOA Fees) is typically $10,000 to $25,000.

The consistently positive cash flow – in other words, “negative cost of ownership” – has been a hallmark benefit of owning a condo at Buttonwood Reserve, and steps are being taken to improve performance further in the coming years:

Rental Program Financial Pro Formas*
(Average per unit, per annum)

(All numbers in $000’s)

Rental Guarantee
 
We offer to guarantee a minimum of  

$30,000
 
in rental revenue in the first 12 months following purchase.

• Owners have complete flexibility to decide how many days (or weeks, or months) to reserve their condo for personal use and when to make it available for use in the Rental Program.  You can come to visit (or send family and friends) whenever you wish, as often as you wish, for as long as you wish.
• Owners participating in the Rental Program are exempt from property tax under the Bahamas Hotel Encouragement Act (a savings of about $3,000 per year).

In short, the program removes one of the major hassles associated with owning a vacation rental property, provides for professional management of all key functions, ensures a positive experience for rental guests that builds the positive reputation of Buttonwood Reserve in the marketplace, and maximizes financial returns to owners.

2. In the long term, Buttonwood Reserve offers attractive appreciation potential

The potential for long term appreciation in Eleuthera is based on a multitude of factors:

First, outsiders are rapidly discovering Eleuthera as a “hidden gem” in the Caribbean

• The island has all the necessary infrastructure for an enjoyable vacation spot including good roads, cell phone coverage, high-speed internet, some excellent restaurants, nightspots, and little resorts, all the necessary stores and services, and plenty of flights every day
• Proximity to the U.S. (just 200 miles from Miami) makes Eleuthera attractive to Americans trying to get away from crowded and overpriced beaches
• Beginning about 15 years ago the travel industry began to notice Eleuthera again. Travel and Leisure, for example, noted that Eleuthera, “once renowned for its picture-perfect white and pink sands somehow dropped off the traveler's map,” and described some of the early steps in the island’s rebound, which had already begun. Around the same time, The New York times called Eleuthera “an untold hidden gem.” Major hotel companies also began to plan development projects.
• Since that time, Eleuthera’s reputation and visibility has continued to grow.  One tangible indicator of the most recent trends:  inquiries and rental bookings through Eleuthera Vacation Rentals continue to grow rapidly.

Second, prospects for continued development on the island are strong – but not so intense as to destroy the charm that makes it such an appealing destination.  In recent years, a half dozen significant resort and hotel development projects have been completed, begun, or announced, including some major luxury brands names such as the Four Seasons, Echantment Group,  and Marriott.

Third, the performance of the nearby real estate market in Miami could point to some nice cyclical gains in the next few years.  Bahamas real estate market typically lags Miami by a year or two, and the Miami market is very strong.
 
Fourth, the Bahamas government is stable, the legal system is sound, and property rights are protected.

Fifth, Bahamian currency is pegged to the US dollar, eliminating currency risk.

Finally, current prices are attractive relative to comparable properties elsewhere in the Caribbean and the US.

3. The condos at Buttonwood Reserve are still very affordable

Purchase price for planned 3 bedroom units

• Top Floor Units:  $725,000
• Ground Floor Units:  $595,000

Notes:
 
- Prices include mini-garage (for golf cart) and all appliances
- Luxury furnishing packages can be purchased separately or custom-furnished by purchase, if desired


 
 
 
 
 
*Additional details available for review, along with Purchase Contract and Condominium Association documents. Costs include marketing, housekeeping, guest services, maintenance, utilities, property management, insurance, replacement reserves, and HOA Fees. Does not include depreciation allowance (e.g., for tax benefits)