Long-term rentals in Barbados: a guide for property owners

Holiday rentals attract the attention, yet for many owners a carefully selected long-term tenant is the most composed way to hold property in Barbados. Income is predictable, wear is modest, and there is no weekly cycle of arrivals and departures. This guide sets out what an owner should understand before committing a property to a tenancy of a year or more.

It is general information rather than legal or tax advice. Legislation evolves, and a Barbados attorney should confirm the current position for your property.

Choosing the rental strategy

• Long-term (twelve months or more). The most predictable income and the lightest management. Properties are often offered unfurnished or partly furnished.
• Mid-term (one to twelve months). Furnished residences for remote professionals, relocating families and executives on assignment. Rents command a premium over long-term rates, with correspondingly more turnover.
• Holiday rentals. The highest nightly rates, the most intensive management, and a distinct regulatory regime. A 10% shared economy levy has applied to short stays since 2018, and Parliament has been considering a bill that would have booking platforms collect it directly.

Many owners begin with a long-term tenancy and reconsider once they understand the property and its market.

Selecting the tenant

The quality of the tenant matters more than the headline rent. A dependable tenant at a fair rent will outperform a higher rent accompanied by arrears or damage. Sound practice includes:

• Identity and references, from previous landlords and employers.
• Affordability, with the rent sitting comfortably within the tenant’s income.
• A meeting, in person or by video, before any agreement is signed.

The lease

Every term should be in writing. A well-drafted residential lease in Barbados addresses:

• The rent, its due date and the method of payment
• The term, and how either party may bring it to an end
• The security deposit and the conditions of its return
• Responsibility for each utility
• Responsibility for repairs, by category
• Pets, smoking, subletting and alterations
• A photographed inventory, signed by both parties

Have a Barbados attorney prepare or review the lease. A template drafted for another jurisdiction may not reflect local law.

Security deposits

Tenant guides describe a deposit of approximately one month’s rent as customary. It secures unpaid rent, outstanding utilities and damage beyond fair wear and tear. A detailed, photographed inventory at the outset is what allows the deposit to be applied fairly at the end of the tenancy.

Registering the tenancy

Barbados’s Landlord and Tenant (Registration of Tenancies) Act requires tenancies to be registered with the revenue authorities and sets out obligations for landlords. Your attorney or the Barbados Revenue Authority can confirm the current registration procedure. The longer-standing Landlord and Tenant Act continues to govern rent and the recovery of premises.

Maintaining a property in a tropical climate

Salt air, strong sun and heavy seasonal rain are demanding on any building. Owners should budget for:

• Regular servicing of air conditioning and water systems
• More frequent repainting and rust treatment than in temperate climates
• Grounds maintenance and pest control
• Hurricane preparedness, including shutters and a plan for the season

Agree in the lease which minor repairs fall to the tenant, and attend promptly to the rest. Well-maintained homes retain good tenants for longer.

Tax

Rental income from a Barbados property is taxable in Barbados, and owners resident in Canada, the United States or elsewhere may also have reporting obligations at home. Take advice in both jurisdictions before the first tenancy begins, so the appropriate records are kept from the outset.

When professional management is worthwhile

For owners overseas, or those who would rather not field maintenance calls, a property manager can source and vet tenants, prepare the lease, collect rent, coordinate repairs and provide monthly statements. Ask any manager for a written schedule of what is included and what is charged separately.

Before the first tenancy

1. Decide between a long-term, mid-term or holiday strategy.
2. Obtain an appraisal of the achievable rent.
3. Prepare the property: repairs, safety and a clear inventory.
4. Have an attorney prepare the lease.
5. Register the tenancy.
6. Take tax advice.

To understand what your property could earn, request a complimentary rental appraisal.