ANDY AND MAGGIE DOWDEN have two favourite places to watch the sun sink into the Caribbean. The first is Surfside, a beachfront bar on the west coast of Barbados where the rum-and-Cokes are as perfect as the view. The second is from the first-floor terrace of their own private villa nestling high above the sea on the exclusive Royal Westmoreland golf course.

But, even when they are back in Bristol the beautiful Bajan sunset is paying its way. After extensive renovations, the Dowdens are hoping to let their spacious three-bedroom white villa for up to US$1,250 (£680) a night in high season. When they bought their property last year, rental income was not on their minds: 11 Forest Hills was not meant to be an investment, but they soon realised that almost all owners in Barbados let their properties.

Jill Strang, of Hamptons, says that 95 per cent of buyers in Barbados plan to let, so rental potential is a big consideration. While less well-known islands in the Caribbean are becoming fashionable, good rental income depends on accessibility. Islands that can be reached only by local charter transfers, helicopters and boats will never be as popular as direct-route destinations; Antigua, Barbados, Jamaica and St Lucia.

Of these, Barbados is the most popular. On the west coast — think of Sandy Lane, the Colony Club and Mullins Beach — that means buying as close to the sea as you can afford, or another magnet such as a golf course. Royal Westmoreland has new three-bedroom houses for sale from $1.4 million to $2.3 million. But the Dowdens bought their neglected villa for $625,000.

Even so, owning property on a golf course is expensive. As well as $19,000 annual fees for the upkeep of the communal areas, the Dowdens employ a gardener, property manager and a full-time housekeeper. This brings running costs to $50,000 a year and means that the Dowdens need to rent the villa for 73 nights in high season before making a profit. But with Royal Westmoreland attracting famous new owners all the time — Gary Lineker is having a house built — the Dowdens are confident.

Andy, who runs a civil engineering company in Bristol, says: “It has been a good investment. We didn’t do it to make money, but it was important that we didn’t put our money into something that immediately lost value.” The property is listed with Island Villas, but the Dowdens also market it themselves with Ownersdirect, an internet site that puts holidaymakers directly in touch with villa-owners. The first year was slow, but Forest Hills has already been rented for seven weeks this year at $680 a night with more inquiries coming every week.

West coast beachfront villas cost millions of dollars, but well-designed new developments can offer a decent rate of return. Hamptons is marketing a two-bedroom apartment at Beacon Hill, a gated community opposite Mullins Beach, for $850,000. Holiday rents rise from $250 low season to $800 a night high season.

Strang advises buyers to calculate rental returns based on occupancy of 30 per cent of the year — 110 nights. Of that, 70 per cent would be during the high season, giving a gross rental income of just under $70,000 a year.

Hamptons charges 15 per cent rental commission and management fees (calculated according to location and size) of $410 a month, knocking $20,000 off the top and giving a yield of about 5 per cent.

Alternatively, the Savills agent Chris Parra believes a new development, Summerland, at Prospect, just south of Sandy Lane, offers buyers a great chance to get in at the beginning. Three-bedroom apartments start at $675,000 with a range of upgrades such as a private swimming pool available from $35,000. Rents vary from $250 to $400 per night. A gross annual rental income based on the same calculation would yield $38,000, but Parra believes that dedicated marketing could take occupancy levels as high as 25 to 30 weeks of the year.

This may give a better return than, say, spending $2.6 million on a luxury apartment at beachfront development Sandy Cove, where high season rents are $1,200 a night.

If an exclusive west coast address is not on your shopping list, consider property on the less fashionable but livelier southwest coast. Cheaper flights are extending the holiday season well beyond the usual winter months and the mid-market south coast is the main beneficiary. A British couple who bought a two-bedroom beachfront apartment at St Lawrence Gap two years ago for £250,000 now let it for a minimum of £650 a week for three quarters of the year. This covers mortgage and running costs and will soon subsidise their holidays in the sun.

Nick Byrne, a director at Waterside Properties, a UK-based agent, thinks the mid-market in the Caribbean is set to rocket. After selling out a development of £100,000 two-bedroom houses in Antigua, his next project is Terraces, a development of 16 two and three-bedroom apartments 100 yards from the beach at St Lawrence Gap, Barbados. Prices start at $315,000. Byrne estimates rental rates rising from $100 a night in low season to $175 per night in winter.

Factor in the higher occupancy on the south coast, say 12 weeks high season and 12 weeks low season, and a gross rent of $35,000 is achievable. Running costs for a two-bedroom apartment are about $7,800 a year, while commission and management fees are likely to cut rent yields to a realistic 6-7 per cent.

This level of return may not make your mouth water, but throw in the pleasure of owning a Caribbean home and a couple of rum-and-Cokes and it starts to look a lot more attractive.

• Royal Westmoreland Sales: David Barnard 00 1 246 419 0394. The Dowdens, villa can be booked on: www.ownersdirect.co.uk/caribbean/CB11.htm; Hamptons: www.hamptons.co.uk; Island Villas (a Savills associate): 00 1 246 432 4627 info@island-villas.com; Waterside Properties: 023-9277 7073 www.watersideproperties.co.uk

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