5 Best Affordable Caribbean Islands to Live On...and 2 to Avoid

5 Best Affordable Caribbean Islands to Live On...and 2 to Avoid
A laidback lifestyle and turquoise waters—without the high price tag.|©iStock/dstephens

The Caribbean isn’t just for cruise ships and luxury vacations. Beyond the big-name tourist hotspots like Aruba and the Bahamas, there are lesser-known islands where expats live affordably, surrounded by the same white sands and turquoise water, for a fraction of the cost.

From Belize to the Dominican Republic, there are Caribbean destinations where a couple can live comfortably on $2,000 to $3,000 a month. These islands offer warm weather, welcoming communities, modern amenities, and stunning natural beauty—without the premium price tag.

Read on to learn more about five budget-friendly Caribbean islands where expats are thriving…plus two islands that may look tempting but come with a higher cost of living than you might expect.

1. Ambergris Caye, Belize

Expat-friendly island life on Belize’s barrier reef.
Expat-friendly island life on Belize’s barrier reef.|©iStock/Wirestock

English-speaking Ambergris Caye is the largest island in Belize at 25 miles long and a little over a mile wide, and San Pedro is its only town. About 30 years ago, the island became a hotspot for divers and fishermen drawn to the nearby Belize Barrier Reef, a half-mile offshore. This living coral reef, rich with marine life, has driven much of the island’s recent growth.

Until a few years ago, San Pedro was a quiet fishing village catering to adventure travelers, and golf carts were the main mode of transport (they’re still widely used today, although cars are more common now). With a population of over 15,000, it’s now the second-largest town in Belize District, after Belize City.

Despite this growth, expats give up little in terms of convenience. Power, water, cell service, and internet are reliable, and most daily necessities are available locally. Regular water taxis and flights make shopping trips to Belize City or Chetumal, Mexico, easy, and the island’s dining scene continues to expand. A couple can live comfortably here for $2,950 to $3,150 a month, including rent, and those who own their home outright report getting by on less than $2,000 a month.

Donna and Timm Ehart are one such couple who made the move. They left behind careers in the software industry that involved 16-hour days and three-hour commutes. “We’d say, ‘This can’t be what life is all about. We should move to the tropics and have a little place on the beach,” says Donna. That dream led them to open Coconut Café in San Pedro, where they now serve fresh-squeezed juices and homemade tropical comfort food like French toast and burritos.

“Belize has taught me to relax, go with the flow, enjoy the small moments,” Donna says. She’s also found ways to connect with the local community, including helping implement a 911 system, organizing a summer sports program, and even bringing a circus to the island. While many people said the move was brave, Donna disagrees. “No, it’s not hard. The people of Belize are amazing and welcomed us with open arms. It’s a major change in lifestyle, but a good major change.”

Ambergris Caye is no longer a sleepy little Caribbean island hideaway. , but for expats seeking both natural beauty and a vibrant, well-connected island community, it remains one of the most appealing places in the Caribbean to live.

2. Roatán, Honduras

Diving paradise with a thriving expat community.
Diving paradise with a thriving expat community.|©iStock/solar737

An emerald escape in the western Caribbean, Roatán has quietly graduated from secret divers’ getaway to livable island haven. Just 50 square miles, this green, hilly island off Honduras’ northern coast is long and skinny, fringed by a reef rich with sea life and garnished by white-sand beaches.

The beaches here are quiet and pristine. Life is laidback, lived in rhythm with the sun and the surf. No big-name resorts. No “spring break” strips. No high-rise developments. This is old-school Caribbean, though fitted out with modern conveniences.

For less than $175,000, you could have a two-bedroom Caribbean home right on the water in a quiet neighborhood with no tourists, your own private getaway. If you stayed just part of the year, you could rent your place out to help cover your holding costs.

This is an island where “normal” people can buy a vacation home or permanent digs to live out their sunny, low-cost, and comfortable retirement. The infrastructure is good and getting better all the time, with a new power plant online and the recent opening of a hospital with specialist care and a 24-hour emergency room.

Life on an island is often more expensive than mainland living, almost everything has to be imported, after all. But relative to the rest of the Caribbean, Roatán offers excellent value. Daily life, lived well, is affordable on Roatán—a budget of $2,000 to $2,500 a month, all in, for an average retired couple. The cost of living always depends on lifestyle, and products imported from the U.S. are comparable to U.S. prices. But with pineapples for $2, good wine from Chile for $6 to $8 a bottle, grass-fed ground beef for $4 a pound, and $5 for a plate of grilled chicken, salad, plantains, rice, and beans at a local seaside restaurant, you can’t help but save money.

“Living on Roatán, I love outdoor activity—swimming, diving, boating—it’s great that way,” says expat Martina Leitch, who runs a B&B with panoramic sea views. “And out here, it’s blissfully quiet.”

“The cost of living is amazing,” says Martina, a Canadian who has called this island home for 12 years. The first six years, she spent her winters in the busy West End. For the last six years, she has lived full-time off the grid, far on the east side, near Port Royal, in a hilltop home, her B&B/restaurant, with panoramic ocean views.

The vibrant expat community on Roatán means you’ll never be short of friends or things to do. Boating trips to nearby cays… parties, cookouts, potlucks, and other celebrations… beach barbecues (celebrating nothing other than living in paradise)… dinners out… the social life is great. And there are plenty of beach bars and restaurants.

Bottom line: Roatán is great for good-value, laidback living in the sun. Culture vultures will get bored, but if you like to dive, snorkel, swing in a hammock, or sit with your feet in the sand, you’ll want to linger.

3. Isla Mujeres, Mexico

Island charm just minutes from Cancún’s coast.
Island charm just minutes from Cancún’s coast.|©iStock/Thiago Santos

Isla Mujeres is about eight miles from Cancún in Mexico, but this laidback island feels a world away from the hustle and bustle of its more tourist-developed older sister. Before Cancún existed, Mexicans and a few adventurous foreigners came to Isla Mujeres for some of the world's best beaches and water sports—diving for coral, swimming with dolphins, and sailing on a crystal-clear sea.

Clear, azure waters and white-sand beaches are never far away, and the cost of living is far lower than what a similar lifestyle would cost back in the States. You can own a one-bedroom, two-bathroom penthouse condo with a view from $230,000, or rent a one-bedroom place for $700 to $1,000 a month, according to local expats.

At the age of 55, Rob and Julie Goff had had enough of the cold, the snow, and their ongoing business pressures. When they realized they could live full-time on a Caribbean island, they quickly took action. They packed up, sold out, and traded the cold weather and stressful lives for an island lifestyle of warm, turquoise water, tropical weather, zero stress, and the freshest seafood imaginable. “We took advantage of the opportunity. It wasn’t a tough decision,” Rob says.

The Goffs used the funds from the sale of their home and business to build their new island home. It covers about 2,000 square feet, and they spent about $700,000 in total. “We have a lovely pool and a great deck where we often sit with a bottle of wine. In fact, it’s not unusual for a neighbor to show up with their dog, and a bottle of wine in hand,” says Julie.

They both love the beach, and Julie enjoys spending time in her artist’s studio. Rob can often be found in the water with his scuba buddies.

The island enjoys a warm tropical climate, typically in the low to mid-80s Fahrenheit for most of the year, and a laidback vibe. Golf carts are preferred to cars as the main means of transport. A couple can live a very nice life on Isla Mujeres for around $36,000 a year, or $2,500 to $3,000 a month, including rent.

4. Las Terrenas, Dominican Republic

A French-Caribbean vibe with low living costs.
A French-Caribbean vibe with low living costs.|©iStock/ukayacan

Columbus knew he was on to something good when he spotted a beautiful, coral-rimmed island in 1492. “This is the fairest land under heaven,” the explorer is reported to have said.

Though Columbus made many mistakes on his first voyage to the New World, he was right about the island—now known as Hispaniola, the eastern part of which is the Dominican Republic. (The western side is Haiti.) The Dominican Republic has great weather and world-class beaches, not to mention a low cost of living and a stable government—plus, it’s just three and a half hours from New York, which means you can leave the city in the morning and be on the beach by lunch.

The north coast of the island has some of the finest beaches in the Caribbean; the east coast is a sportsman’s paradise, with some of the newest designer golf courses in the region.

If you’re looking for a low-key getaway with all the conveniences of home, you’ll find that the town of Las Terrenas offers excellent value, combining beautiful beaches, a small-town feel, chic style, and relatively affordable property. Thirty years ago, it was a rustic fishing village. Twenty-four years ago, the town didn’t even have electricity. However, an influx of 6,000 French and Italians, who loved the place so much that they decided to settle there, changed the face of the town.

Today, the town center is a whirl of motoconchos (motorcycle taxis), stores, and cafés painted rainbow-bright. The original old wooden homes along the beach are now trendy cafés and restaurants—family-run places serving wood-fired pizza and simple snacks, all the way up to gourmet Italian and French cuisine.

This isn’t an all-inclusive resort territory, and thanks to strict planning laws, it should stay that way. The beach hotels here are small and family-run, rather than sprawling, faceless chains.

The beaches around Las Terrenas are some of the most pristine in the Dominican Republic. The most incredible thing about it, though, is the real estate prices. A one-bedroom, one-bathroom loft apartment can be had for as little as $99,500. A couple can live in this tropical haven for around $2,000 a month, although most choose to spend closer to $3,000 a month.

When Dan Williams decided to retire there, he had been working for eight years as an environmental engineer for the Missouri state government. At the time, he was 57 years old, single, and longing to retire to the beach.

“The country is a mini-continent, with a wide variety of terrain, from oceans to the highest mountains in the Caribbean, and everything in between,” he says. “The climate is wonderful. It is close to the U.S. and is economical. Weighed in the balance, it is the ideal country for me.”

After a few months in Sosúa, on the north coast of the Dominican Republic, Dan decided to tag along with a friend who was taking a road trip to Las Terrenas.

Dan was enchanted and decided to relocate there. “I loved the beach, the vibe, the natural beauty, and the European flavor of the place,” he says. “It seemed like a hidden Shangri-La.”

5. Isla Colón, Panama

Bocas del Toro’s colorful, affordable expat hub.
Bocas del Toro’s colorful, affordable expat hub.|©iStock/Nahuel Tomsich

Not many people know that Panama has its own tropical archipelagos. Set on the Caribbean coast, close to the border with Costa Rica, Bocas del Toro is a group of nine main islands and a few hundred smaller cayos and islets, dotting calm turquoise waters.

The main hub is bustling Bocas Town, located on the largest island, Isla Colón. It’s a ramshackle seaside town of brightly painted buildings, many of which are perched on stilts over the water. This is the home base for most visitors and where the majority of expats in the area live.

Bocas, as it’s commonly known, is all about the water. Water sports, fishing, and whale watching are among the most popular pastimes. While the town sees steady tourist traffic, it still maintains a laidback, casual feel.

And you don’t need to be a millionaire to live here. You can rent a one- or two-bedroom home for as little as $600 to $1,200 a month. Including rent, the total cost of living in Bocas could be as low as $2,000 a month for a couple. It’s worth noting that Bocas is home to a significant amount of untitled or right-of-possession (ROP) property, which can be complex. It’s best to rent first and get to know the legal and geographic landscape before considering a property purchase.

Two to Avoid… If You’re Watching Your Budget

There’s no denying the beauty and tropical appeal of St. Thomas and Grand Bahama. For expats with unlimited funds, either could make a dreamy island escape. But for anyone keeping an eye on expenses, these Caribbean destinations come with a high cost of living that can quickly break the budget.

1. St. Thomas, U.S. Virgin Islands

Gorgeous but pricey—high costs limit appeal.
Gorgeous but pricey—high costs limit appeal.|©iStock/SCStock

Located in the Caribbean, the U.S. Virgin Islands are made up of over 60 islands, most of them uninhabited. The three most populated and most visited are St. Thomas, St. John, and St. Croix. The U.S. Virgin Islands are an organized, unincorporated United States territory, and their people are U.S. citizens.

The appeal of these tropical islands lies in their mix of the exotic and the familiar, an island paradise with modern comforts and a balance of Caribbean culture and American practicality.

St. Thomas is home to most of the territory’s population. It’s also the most commercialized of the islands and a regular port of call for Caribbean cruise ships. This 30-square-mile island features jungle-covered cliffs rising high above turquoise waters dotted with yachts of every size. But St. Thomas, particularly the capital, Charlotte Amalie, can become overrun with tourists.

While St. Thomas may be a pleasant place to live, we suggest giving it a pass if you’re on a budget. The cost of living is high: apartment rentals average around $2,000 a month, and buying a two-bedroom home in a good neighborhood typically starts at $285,000 and up.

2. Grand Bahama Island, the Bahamas

Beautiful beaches, but budgets stretch thin here.
Beautiful beaches, but budgets stretch thin here.|©iStock/DenisTangneyJr

You might spot names like Nicolas Cage, Johnny Depp, Oprah Winfrey, and Tiger Woods among the many North Americans and Europeans who own second homes in the Bahamas. These celebrities have invested in private islands or luxury properties, a testament to the archipelago’s enduring allure. While other names, like Bill Gates, are sometimes mentioned in this context, there’s no verified record of ownership.

Like other expats who live there for all or part of the year, these stars often view the Bahamas as a paradise, an upscale group of islands with some of the most beautiful beaches in the world. The Bahamas are friendly to newcomers, there’s no foreign language barrier, crime is relatively low, and the islands sit just off the Florida coast.

That’s the good news. The bad news is that property here usually isn’t cheap. Medium-sized residences in exclusive gated communities with ocean views often cost more than $2 million.

Even though Grand Bahama is the closest major Bahamian island to the U.S., just about 55 miles off the Florida coast, it remained one of the least developed until only a few decades ago. In the mid-20th century, the population was just 500.

Today, Grand Bahama is the second most populous island in the country, with more than 50,000 residents. Its major city, Freeport, has around 27,000 residents, making it the country’s second-largest metropolitan area, far eclipsing West End, the former capital of Grand Bahama.

Grand Bahama Island has become a haven for beach lovers, as well as divers, fishermen, golfers, and sports enthusiasts of all kinds. It’s also a prime destination for world-class shopping. But living here comes at a cost: prices are 30% to 50% higher than in the U.S., making it a difficult place for budget-conscious expats to settle.

Final Thoughts: Island Life Without the Island Price

The Caribbean has long captured the imagination of travelers and dreamers, but too often, it’s dismissed as a place that’s out of financial reach. As this guide shows, that doesn’t have to be the case.

Whether it’s the reef-fringed shores of Roatán, the artist-friendly vibe of Isla Mujeres, or the French-Caribbean charm of Las Terrenas, there are still places in the region where a relaxed, sun-soaked life is both attainable and affordable. These aren’t fantasy vacations; they’re real communities where expats are building fulfilling lives for as little as $2,000 to $3,000 a month.

Of course, not every island is budget-friendly. High-profile destinations like St. Thomas and Grand Bahama still command premium prices. But when you look beyond the typical resort hubs, the Caribbean opens up in ways many never expect.

With the right planning and the right island, it’s entirely possible to trade cold winters, long commutes, and high costs for a simpler, sunnier life by the sea.

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