REVISED – FEBRUARY 2018
One of the most dreaded questions a builder is constantly asked is “what are construction costs in The Bahamas?” The worst part about this question is that the individual asking the question usually has a preconceived number in their head and does not really want to hear anything else. The conversation usually ends up as an unfriendly debate between the builder and a new property owner …….
The new property owner has done his research and states “some guy at the bar told me he can build a house for $100 a square foot”
While the seasoned builder knows from years of firsthand experience that the “guy at the bar” has been drinking too much rum and Koolaid
Well, the truth is that building for $100 per square foot is not entirely impossible. Get a local draftsman to reproduce a simple rectangle on a piece of blue paper, manage the entire project yourself, convince your friends and family in the industry to give you insider deals, beg, steal and borrow all the materials you can, source illegal immigrant labor, use cheap windows and doors from China, cheat customs duties, forego baseboards and trim, use clearance discounted floor tiles, slap on a coat of no-name paint, fashion cupboards on-site out of left-over roofing ply. You’ll get yourself a kitchen, laundry, two bedrooms, living room and one bathroom all in 1,000 sqft for $100,000.
And it will look something like this….
Unfortunately the Devil is in the Details and if you want something more like this….
Here are the numbers 
This would be at the higher end of the typical Bahamian homeowner’s expectations. Not just a dwelling to survive in but rather the A/C chilling, kids playing in the yard and dinner in the oven.
$250 a square foot!
Now the problem is that these days, for most young professionals and second homeowners that are actually out researching construction costs in the Bahamas, is that the above house is entry level. So let’s go back to the original base structure of $100 a square foot and estimate a 5,000 sqft custom home that will require an extremely capable team two years to design and build and see what else we can add to our list of needs and wants :
That’s right. This whole program can get up to $1,000 a sqft and often does when Jet-Setters touch down on a fabulous beach here. This is also by no means a limit. Until a few years ago, Fleetwood Windows & Doors were considered the best manufacturer of doors and windows in town, and the most expensive. These days clients are requesting Windows and Doors made in Switzerland that cost three times as much. That’s three times as much to buy, three times as much on shipping and import duty and three times as much to fly a Swiss specialist over to install them.
But coming back down to earth. This blog is to help you get an idea of construction costs in the Bahamas. Most of you are going to fall somewhere between $250 and $500 a square foot because you want a nice house with a few trimmings but don’t need all of the above. The real secret is don’t listen to the guy in the bar. Don’t just listen to me either. There are highly trained and experienced experts in the Bahamas that specialize in construction costing. With some input, for a small fee, they will give you an official estimate of what your costs will be, in advance. Treat it like a business plan and consult with them before you even purchase a property to build on. It may be the best money you never spent.
These are two of my favorite firms. If anyone knows of any other good ones, please let me know and I will add them to the list.
* Custom Homes – The Bahamas is a very remote, minuscule and fragmented house market compared to North America and Europe and there is virtually no modular or production building here. Pretty much every home is a one-off design and build. I get a lot of expats complaining about building costs here when they are actually comparing mass-production house prices with custom prices. If you go back home and ask an architect what it will cost to design and build a ‘custom’ home, I think you will find that we are not so “Coconuts in the Bananas.”
** General Conditions – In a nutshell GC’s are all the ‘associated’ costs with building a house. The builder’s secretary and office expenses, depreciation on his tools and equipment, business license fees, the foreman’s truck, a reasonable profit margin. Small, inexperienced builder’s typically don’t charge (enough) for this…….. and go out of business halfway through the job!
Be sure to pick up a copy of our latest book Escape to the Bahamas: A Guide to Relocating to and Living in the Bahamas, where we go in-depth on topics such as
- Which island is right for you
- History, culture & landscape
- Buying or bringing your vehicle & getting around
- Renting
- Buying property
- Building in the Bahamas
- Establishing residency
- Supporting yourself financially
- Health care
- Crime and safety
- And many more topics!
The costs to build a home in The Bahamas are outrageous which is why the construction industry seriously needs proper oversight. The "professional builders" are no different from the "guy at the bar" since it is all about the money aka greed. Either way, homeowners are getting screwed with little to no protections. Fix the construction "systems", fix the greed problem.
Hi Athena. Whilst I agree that there are some very greedy builders out there, it is a little unfair to blame the high cost of construction on ALL builder's greed. It is a very competitive market out there and if you do your homework and understand what the realities are and know where the money should go, there is no need to be a victim of any builder's greed. Having said that, some regulatory oversight probably wouldn't hurt.
5000 square feet to sit by the ocean? What a hoax. Give me the simple life….keep your stress.
I found your blog in a search for "Bahamas construction costs". I think the cost breakdown tables are exactly what I was looking for; better than expected actually. They are a very useful introduction to managing your expectations. Each project is unique and all variables will need to be adjusted by location, time, and quality. The real message is "be aware". Before buying any property (in any market) invest in knowledge. Have an architect sketch your dream, verify that it's legal, and get to know a local builder who can verify that your budget and dream are in sync. As I said, manage your expectations.
why would anyone pay a builder $500+/sqft to build when there are resales sitting on the market for YEARS that are asking way less than that (including the price of land)?
Moreover why buy in an illiquid market where it can take over a year before you can sell and get your money out? Keep your capital, let other suckers buy and simply rent from them usually at a fraction of their true operating costs…the end.
Oh Boy….Happy Easter Anonymous!! I do feel your pain. It has been a tough ride sine the global financial crisis but things are looking up 🙂
Oh my goodness! Incredible article dude! Thanks, However
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Not sure whether to build or buy house the costs seem so expensive to build and the shipping it does seem quite a rip off. However once purchased a property there will be some remedial work to be carried out. Is this going to be as expensive. Can we do the work ourselves like fitting of new kitchen and bathrooms, painting and the like. Or do we have to use local labour.
Hi Dianne
The real estate market here in the Bahamas is only now recovering from the Global Financial Crisis. NEW CONSTRUCTION costs remain buoyant however there are still some very good deals to be had in the EXISTING HOMES market, especially if the property needs a bit of sprucing up. Cost and stress wise is definitely going to be more subdued doing a fixer upper versus a new build. There is also nothing to stop you from working on your own project here. You can act as your own developer, contractor or carpenter so long as it is purely for you. Just please remember that if you do your homework and go about it the right way, hiring a few locals to help can be a wonderful introduction to your new community.
Great blog Mark. Do your costs include customs and duties? Are there any costs for special permits required? How have the recent hurricanes affected construction costs? Also, there are appears to be two math errors within the luxury estimate, in the running total column between the Doors/windows and the Extensive Architectural Features ($100 too much), as well as in between the Door and Trim Package and the Textured Features ($10 short)
Hi Ken, please see below response. I’m not sure if you will get the alert since it doesn’t look like Mark replied directly to your comment. Hope his answers help. Feel free to contact us directly if you have additional questions!
Hi Ken.
These numbers would include customs and duties. They are very broad but the intent is to indicate total finished costs inclusive of importing, installing and any other associated expenses. Permitting for a typical private residence is minimal and inexpensive here and those costs are also factored in to the GC’s general conditions above. I have never really seen any affect on local construction costs here due to hurricanes. We may see a brief spike in roofing materials just before and after a storm has passed but there is rarely enough damage to justify any kind of trend. The vast majority of materials used here are imported from the USA so we are far more likely to see prices of plywood and lumber go up as a result of the demand for the materials in Florida and Texas (external influences) but we are good for now. A close friend in the insurance business has advised me that premiums will be going up considerably due to all of the devastation to the South of us this year.
Thank you for pointing out my bloops. will correct asap
I have a question: What if you are doing some, or maybe most of the home-building yourself (finding a lot with a pre-existing foundation or unfinished home) and (meaning myself and family), but need the contractors signature on plumbing, or electrical, etc.? Can an American build a home in the Bahamas under those circumstances and save themselves a significant amount of money?
Hi there Tim and Happy Holidays. You can save money doing this. Labor is pretty cheap in general here so you being the one lugging concrete blocks and lumber around in the hot sun may not be the best use of your time. Where a lot of the money goes is in management and oversight (or lack thereof) If you were going to be around full time managing things, you could hire a local crew directly and get a lot of work done very efficiently. A recent budget I did for a client if they used a local GC was :-
General Conditions 145,000
Siteworks 55,000
Concrete & Steel 35,000
Carpentry 80,000
Thermal & Moisture 40,000
Doors & Windows 105,000
Finishes 100,000
Specialties & Equipment 25,000
MEP 80,000
665,000
VAT (7 1/2%) 49,875
714,875 Total
If you self performed the same project you could pretty much eliminate $200,00 between General Conditions and VAT that the contactor would have in there. You could also subtract another 30% for profit, attendance and risk (slush, waste, mistakes, inefficiencies, weather events, etc) that a GC would have built in to remaining items. That’s another $130,000 in savings, so nearly 50% off the GC’s total before you have even picked up a hammer.
MM
Hi Mark,
My hubby and I are totally in love with a home sitting on .25 of acre, that has 1 bedroom and a loft. We really need 1 more bedroom. What are the estimates for building/expanding per square ft? the same as building new? Its on an Out island in Abaco if that helps. the house has a flat back and we just wanted to expand the back out on ground level
Hi Sierra
An ‘addition’ really is new structure compared to renovating an existing structure, so yes, budget for new. I am ‘guessing’ it will be a timber structure being an island in the Abacos ? My rule of thumb for the base cost of timber frame is $50 a sqft versus $100 a sqft for block and concrete. So considering my original table and excluding any allowances for hardscapes and landscaping, I recommend you budget for $150 a sqft for a small timber framed extension. This may be a little high but I would rather you had some change in your pocket at the end, rather than run out of money half way through
MM
Mark – Please give me a call – I have a project I need some help/advice about
Best
Kevin Cullen 713 447-1414
Hi
I am an American who builds luxury villas in the Turks & Caicos Islands. The biggest advice I could give anyone thinking of building in the Caribbean is site supervision. You need to have a trusted person to stand over the work to make sure the work is being done properly. Just because the finished job looks nice doesn’t mean its going to last or survive a Cat 5.
Build to Miami Dade standards or don’t build at all
If anyone has any questions about building I’ll be happy to answer