The Cuban Real Estate Revolution

A long time ago, on an island far, far away (unless you live anywhere near Miami or Key West), rested a location that was a hotspot for vacations and second homes. It’s hard to believe, but Cuba was once a happening place for tourism and real estate in the 1930s, 40s, and early 50s. Then Batista to Castro happened and the rest is a sad history. Now it appears we are only a few years away from reliving that golden era.

Cuban real estate is considered a hot commodity on the world market right now. Cuba’s president, Raul Castro, has not been like his older brother very much. Since taking over for the ailing Fidel in 2006, he has become a passionate advocate for the communist country to embrace pro-business philosophies. He’s allowed Cuban residents to buy and sell their own homes. While that sounds like a pretty minor freedom, it has never happened at this high a volume in 50+ years.

Most Americans are still being shut out of this potentially lucrative real estate market, but with President Obama opening up relations with the Cuban government, this could all be changing rather quickly. But as of right now, the 54 year-old embargo still exists, meaning a private U.S. citizen investing in any Cuban property (house, business, etc.) would be exposed to criminal penalties under the Trading With the Enemy Act. The same goes for any Cuban-Americans. They can send up to $8,000 per year to relatives and others in Cuba, and they can transport up to $10,000 each time they travel to the island. Usually, they visit relatives and funnel them money to fix up their fading homes. Sometimes they even buy one for themselves using a family member’s name, while only paying in cash. And since many Cuban homes are so cheap right now, it wouldn’t take long to accumulate enough cash to close a deal. But if a Cuban-American buys any property on the island, it can still be construed as a violation of U.S. law. This is a very complicated issue for now, which hopefully will be smoothed out by the end of the decade.

Move over Boca Raton. You can expect that once the embargo is officially lifted, Cuba will become a retirement destination for many Americans. Cuba has opened its doors to foreigners (non-American) who are looking to retire for years now. In fact, last October they made the process even easier. The government announced a revision to Cuban immigration law, which now makes foreigners who own Cuban real estate/long-term property rentals on the island, eligible for one-year visas renewable for an extra year.

Business-wise, only good news can come from when President Obama announced “normal relations” with Cuba. Things like agriculture and infrastructure will benefit tremendously from this impending deal, but real estate is the big one to keep an eye on. There are already million dollar penthouses up for sale in Havana. The real-estate revolution has come to Cuba, and while only certain foreigners are reaping the benefits, many Americans are already planning to join the party. Just say when.