Long-Term Real Estate Rental in The Bahamas

Published on October 29, 2025 and written by Cyril Jarnias

The Bahamas, a paradise archipelago located in the Atlantic Ocean, attracts numerous real estate investors each year seeking lucrative opportunities. Long-term rental in this country indeed offers promising prospects for those looking to diversify their real estate portfolio while enjoying an exceptional living environment. In this article, we will explore the essential aspects of long-term rental in the Bahamas, focusing on strategies to maximize your profitability and ensure effective management of your property.

The Bahamian real estate market: attractive profitability potential

Before venturing into long-term rental in the Bahamas, it’s crucial to understand the specifics of the local real estate market. The Bahamas offers a favorable environment for real estate investment, with consistent demand for quality housing, particularly in popular tourist areas.

The Bahamian real estate market is characterized by a wide diversity of properties, ranging from beachfront apartments to luxurious ocean-view villas. Investors can find interesting opportunities on islands like New Providence, home to the capital Nassau, or on Grand Bahama, known for its white sand beaches and modern infrastructure.

Real estate prices in the Bahamas vary considerably depending on location and property type. For example, a two-bedroom apartment in a residential complex in Nassau can sell for around $300,000 to $500,000, while a luxury villa on a private island can reach several million dollars. This diversity allows investors to find opportunities that match their budget and profitability goals.

Rental demand in the Bahamas is supported by several factors, including thriving tourism, the country’s appeal to expatriates and international retirees, and the presence of numerous offshore companies. These elements contribute to creating a dynamic rental market, offering prospects for stable income for property owners.

Establishing a solid lease: the key to peaceful rental

Creating a clear and detailed lease is a crucial step to ensure the success of your rental investment in the Bahamas. A well-drafted rental contract protects both your interests as a property owner and those of your tenants, while clearly defining the rental terms.

In the Bahamas, real estate rental legislation is relatively flexible, allowing some freedom for property owners and tenants to negotiate lease terms. However, it’s highly recommended to consult a local attorney specializing in real estate law to ensure your rental contract complies with Bahamian laws and covers all essential aspects.

Here are the key elements to include in your lease:

• Complete contact information for the property owner and tenant
• Detailed description of the rented property
• Lease duration and renewal conditions
• Rent amount and payment terms
• Security deposit amount and conditions
• Respective responsibilities of property owner and tenant regarding maintenance and repairs
• Rules concerning pets, noise, and other community living aspects
• Lease termination conditions

It’s also important to consider the specifics of the Bahamian market when drafting your lease. For example, it’s common in the Bahamas to request a security deposit equivalent to one or two months’ rent. Additionally, long-term leases are typically concluded for one year, renewable by tacit agreement.

Don’t forget to include clauses related to potential damage caused by hurricanes or other natural disasters, which are frequent in the region. It’s crucial to clearly define responsibilities in case of such events to avoid any subsequent disputes.

Setting the right price: optimizing your rental income

Determining the appropriate rent is a key element in maximizing the profitability of your real estate investment in the Bahamas. Rent that’s too high may deter potential tenants, while rent that’s too low could deprive you of substantial income. Therefore, it’s essential to find the right balance to attract quality tenants while optimizing your income.

To set the right price, start by conducting a thorough market study. Analyze rents charged for similar properties in the same neighborhood or island. Local real estate listing sites, such as Bahamas Real Estate or Engel & Völkers Bahamas, can give you a good idea of current rates.

Here are some factors to consider when determining optimal rent:

• Property location (proximity to beaches, shops, transportation)
• Size and number of rooms
• Overall property condition and amenities
• Features offered (pool, garden, sea view, etc.)
• Seasonality (rents may vary depending on the time of year)

As a reference, monthly rents for a well-located two-bedroom apartment in Nassau can range between $1,500 and $3,000, while a luxury villa on a private island can rent for $5,000 to $15,000 per month, or even more for the most exclusive properties.

Don’t hesitate to consult local real estate agents to get an accurate estimate of your property’s rental value. Their expertise in the Bahamian market can prove invaluable in setting competitive and attractive rent.

It’s also important to remain flexible and adjust your rent according to market changes. Annual rent review is common practice in the Bahamas, but be sure to respect lease terms and communicate clearly with your tenants about any potential increases.

The art of rental management: cultivating lasting relationships with your tenants

Effectively managing relationships with your tenants is a fundamental aspect of ensuring the long-term success of your real estate investment in the Bahamas. Good communication and careful monitoring of your property will help you retain tenants, minimize vacancy periods, and preserve your property’s value.

Here are some tips for effectively managing your relationships with tenants:

1. Establish clear and regular communication: From the beginning of the rental, ensure your tenants have all your contact information and that of emergency contacts. Remain available and responsive to answer their questions or concerns.

2. Respect your tenants’ privacy: Although you’re the property owner, respect your tenants’ privacy. Notify them in advance if you need to access the property for repairs or inspections.

3. Regularly maintain your property: Regular maintenance of your property not only preserves its value but also shows your tenants that you care about their comfort. Schedule periodic inspections and perform necessary repairs promptly.

4. Be flexible and understanding: Whenever possible, try to accommodate reasonable requests from your tenants. This flexibility can greatly contribute to maintaining a positive long-term relationship.

5. Honor your commitments: Ensure you fulfill all your obligations as a property owner, as defined in the lease. This includes paying property taxes, maintaining common areas, and managing major repairs.

6. Consider hiring a local property manager: If you don’t reside in the Bahamas or prefer to delegate daily property management, it may be wise to hire a local property management agency. These professionals can handle rent collection, property maintenance, and tenant relationship management on your behalf.

It’s important to note that Bahamian rental property legislation provides significant protection for tenants. Therefore, it’s crucial to scrupulously respect lease terms and local laws to avoid any potential disputes.

In case of conflict with a tenant, always prioritize dialogue and seeking an amicable solution. If the dispute persists, don’t hesitate to consult an attorney specializing in real estate law to understand your options and protect your interests.

Finally, consider retaining your good tenants. A reliable tenant who pays rent on time and takes care of your property is a valuable asset. Consider offering them benefits, such as a small welcome gift or a slight rent reduction upon lease renewal, to encourage them to stay long-term.

Legal and tax aspects: navigating Bahamian waters

Investing in rental property in the Bahamas involves familiarizing yourself with the local legal and tax framework. Although the country is renowned for its advantageous tax regime, it’s crucial to understand the legal and tax obligations that apply to foreign property owners.

Legal framework:

The Bahamas offers a stable legal environment favorable to foreign investors. There are no particular restrictions on non-residents purchasing real estate. However, to acquire a property valued over $500,000, you’ll need to obtain a registration certificate from the Bahamas Investment Board.

Regarding rental, Bahamian law provides balanced protection for property owners and tenants. Rental contracts are generally governed by the “Landlord and Tenant Act,” which defines the rights and obligations of each party.

Tax aspects:

One of the main attractions of the Bahamas for real estate investors is its advantageous tax regime. The country levies no income tax, capital gains tax, inheritance tax, or corporate tax. However, there are some taxes to consider:

1. Stamp duty: When purchasing real estate, stamp duty is due. Its rate varies between 2.5% and 10% of the property value, depending on the transaction amount.

2. Annual property tax: Property owners must pay an annual property tax, with rates varying depending on property value. For owner-occupied residential properties, the first $250,000 of value is exempt.

3. Value Added Tax (VAT): A 10% VAT applies to certain real estate-related services, such as real estate agent fees or legal services.

It’s important to note that even if you don’t pay tax on rental income in the Bahamas, you might be subject to tax in your country of residence. Consult an international tax expert to understand your overall tax obligations.

Currency management:

The Bahamian dollar is pegged to the US dollar at parity, which facilitates transactions for international investors. There are no exchange controls in the Bahamas, allowing free repatriation of rental income.

Insurance:

Given the Bahamas’ geographical location and exposure to hurricanes, it’s crucial to obtain adequate insurance for your real estate property. Ensure your policy covers damage caused by natural disasters.

Conclusion: Keys to success for your rental investment in the Bahamas

Investing in long-term rental real estate in the Bahamas can prove extremely profitable if conducted carefully and professionally. The Bahamian real estate market offers excellent opportunities, with sustained demand and an advantageous tax framework.

To succeed in your investment, it’s crucial to:

1. Carefully choose the location and property type according to your budget and profitability goals. 2. Establish a solid and detailed lease, adapted to the local context. 3. Set competitive rent based on thorough market research. 4. Effectively manage relationships with your tenants to ensure long-term rentals and minimize vacancy periods. 5. Understand and respect the Bahamian legal and tax framework.

Remember that managing real estate property remotely can be complex. If you don’t reside in the Bahamas, it may be wise to hire a local management agency to assist with daily property management.

Finally, stay informed about developments in the Bahamian real estate market and any potential legislative changes. The real estate sector is dynamic, and adapting to new trends will allow you to maximize your investment’s long-term potential.

With a thoughtful and professional approach, your real estate investment in the Bahamas can not only provide stable income but also allow you to enjoy a small piece of paradise in the Caribbean.