Buying real estate in Sosua - any pitfalls?

[A1exB]

Dear DR experts,

We are thinking of buying property in Sosua, namely Hispaniola, but, being total strangers to the area, have certain concerns. Can you comment on following questions?

1. What are the typical costs associated with ownership besides maintenance costs? Property taxes, hydro bills, maid/gardener costs, home insurance?

2. How much the area is impacted by annual hurricane seasons? Do insurers cover damages related to hurricanes?

3. Since we are not planning to live there on permanent basis, is it safe to leave property unattended? What is the crime rate pertaining to burglaries and break-ins?

4. If we are to do renos later on, how expensive is labor and materials?

5. As Canadian citizens, do we need to apply for resident cards if we are planning to extend our stay for longer than a month? What are the consequences if we stay for 2-3 months without having residence - would it cause the problem upon re-entry?

6. If we are to apply for residence cards, how hard and expensive to get that? I read some stories about rules tightened up back in 2012, so do not really want to be caught off guard.

7. In our absence, we would like to rent the property to tourists? I can see numerous properties rented out on booking and airbnb, but it does not really show overall picture of occupancy rate. From your experience, what to expect on average - 20-40-60-60+ occupancy rate?

8. Is medical service up to par in DR comparing to Canada and USA? Would it be better to buy medical insurance in Canada (currently, I pay CAD 315 for annual insurance for family of 5 that covers 35 days abroad) ? Or buying it in DR is preferable?

9. And the last but not the least. If we decide to sell the property later on, how difficult is it? Obviously, one would expect certain degree of liquidity. If we end up paying for villa with land around USD 300k, would it be reasonable to expect to return your money at least upon sale? And how long does it typically takes?

Your feedback is greatly appreciated.

Alex.

 

[windeguy]

These are all very good questions. Even after 14 years of living here, they are not so easy to answer. I will provide opinions below:

Dear DR experts,

We are thinking of buying property in Sosua, namely Hispaniola, but, being total strangers to the area, have certain concerns. Can you comment on following questions?

I know some people in that development and they love it there. Some very nice homes.

1. What are the typical costs associated with ownership besides maintenance costs? Property taxes, hydro bills, maid/gardener costs, home insurance?

You would have to ask the realtor if the house is valued high enough to pay property taxes. In that development, it could be over the threshold. We have Electricity bills (not Hydro bills). That will vary greatly depending upon how much power you use. You go over 700 kWh in a month using that AC and you will pay much more than under that amount. Look up Edenorte.com.do

No idea on maids. Gardeners will depend upon how much you need one, but not expensive.

Home insurance is also something i have no experience with. Most people don't have it.

2. How much the area is impacted by annual hurricane seasons? Do insurers cover damages related to hurricanes?There has never been a hurricane on the north coast. Next question.

3. Since we are not planning to live there on permanent basis, is it safe to leave property unattended? What is the crime rate pertaining to burglaries and break-ins?

That depends very much on where the house is located and how good the security is in that location. I would personally not buy a house in the DR and not live in it.

4. If we are to do renos later on, how expensive is labor and materials?

Much less expensive regarding labor than in Canada. Materials have gone up in price, concrete, rebar, etc, but it really depends upon what you are planning to do and how well you find the right people to do it. Quotes will vary widely and I mean widely.

5. As Canadian citizens, do we need to apply for resident cards if we are planning to extend our stay for longer than a month? What are the consequences if we stay for 2-3 months without having residence - would it cause the problem upon re-entry?

If you are here over 30 days, you are an illegal alien. You can still pay an exit fee, which is a legal aberration in the DR, that allows you to pay for overstaying when you exit. If you want to be legal, you have to start the residency process at the DR embassy in Canada. They can fill you in on the details. There are entire thread on DR1 on this topic alone and why you should or should not do it. At this time there is no barrier on re-entry at all.

6. If we are to apply for residence cards, how hard and expensive to get that? I read some stories about rules tightened up back in 2012, so do not really want to be caught off guard.

Do a google search for this topic on DR1.

7. In our absence, we would like to rent the property to tourists? I can see numerous properties rented out on booking and airbnb, but it does not really show overall picture of occupancy rate. From your experience, what to expect on average - 20-40-60-60+ occupancy rate?

I use Airbnb to rent apartments. Bookings are WAY down over past years. As for large homes like yours, I have no idea how well they rent, since they are for a totally different market. Your location is not conducive to people who want to rent on an island since it is not on the beach. And a very important question is who would manage those rentals for you?

8. Is medical service up to par in DR comparing to Canada and USA? Would it be better to buy medical insurance in Canada (currently, I pay CAD 315 for annual insurance for family of 5 that covers 35 days abroad) ? Or buying it in DR is preferable?

When you know the places to go and you can get there, medical care is OK. Is it up to US/Canadian standards? Sometimes. It is far less costly. Local medical insurance for myself and my wife in an 80/20 plan is under $1,000 US annual including some dental. ARS Humano Plan Royal.

9. And the last but not the least. If we decide to sell the property later on, how difficult is it? Obviously, one would expect certain degree of liquidity. If we end up paying for villa with land around USD 300k, would it be reasonable to expect to return your money at least upon sale? And how long does it typically takes?

Buying is easy. Selling is very hard. Why would you expect liquidity where it does not exist? There is no multiple listing service. Here, everyone is a real estate agent who hardly ever sells a house.

Your feedback is greatly appreciated.

Alex.

Good luck, Alex.

 

[ctrob]

Hispaniola is an excellent choice, especially since you don't plan on living here full time. Security is very good. For renting I would suggest using their onsite Admin office. To do it yourself you would still need to have someone in the area to manage the keys, cleaning, interior maintenance, etc. And you would have to pay a percentage of your income anyways.
So much smarter to just use Hispaniola, pay them the percentage for managing the rentals and your done. Plus they already have a base of repeat renters.

 

[chico bill]

<If we are to apply for residence cards, how hard and expensive to get that? I read some stories about rules tightened up back in 2012, so do not really want to be caught off guard.>

You have to start with the application with a Dominican Consulate in your home country. If you are over 65 and you purchase your property it will be quicker to permanent residency but you and you wife will need the following from your home country:
1 Medical Physical Clearance
2. Police Background check
3. Tuberculosis, HIV screening.
4.Certification of marriage status and child support.
5. Financial Statements and Income Statements (you must meet a minimum amount for a couple or each)
6. Drug Screening
All the above will need to be State verified and stamped (Apostille)
Then you lawyer or immigration specialist will help you process the paperwork and once you get to the DR you will need to repeat
1. Drug Test
2. HIV & TB test
All of the above and gathering the needed documents and paying fees and a lawyer, and going to Santo Domingo immigration offices will cost you about $6-$7 K each and you will have to renew each year (maybe $1K each person), until you qualify for permanent residency and that will cost you about $2-3K to process, which needs to be repeated every 2 years (another $1K every other year). Now some may recommend those who can do it cheaper but it is a cumbersome process especially if you do not speak Spanish well to try to do it alone.
The process is not without cost for sure.

 

[JayinRD]

Rent.

 

[sosuamatt]

I am also Canadian and own a unit in Infiniti-blu. No residence requirements. We have stayed 3 months in recent years and just pay the exit fee penalties. If you have a private manulife or other insurer in Canada you will find the medical care much better and more efficient there than at home. If you need to go to CMC ( the local private hospital in Sosua) just bring your passport and manulife card. We have used this hospital several times over the recent years and have had much better service than in the GTA. Taxes are low or non existent. I would recommend a property manager to rent and look after your property when you are not there. I do not know the procedures in Hispanola but some of my friends live there.
Having said all that.....it is easy to buy and difficult to sell on the North coast. values have gone down in recent years so I would recommend renting before buying to understand more about the area. I love the north coast and Sosua. There are many Canadians living there and you will get a lot of information from them. It is not for everyone.
Good Luck
Matt.

 

[Seamonkey]

Absolutely without a doubt.....rent before you buy. After you bought it, you're stuck with it. The market is littered with homes for sale at bargain prices. You can rent a home in Hispaniola for USD$1200/month and then figure out if you like it. Take your time. Sosua is a great place to live!!!

 

[Harleysrock]

Aren't there problems with deslende's in Hispanolia or did that get figured out?? I would make sure the place you buy has one and a title of course.
Hispanola is a pretty decent place. I've stayed in there quite a few times and it is quiet and safe.
 Renters should be easy enough to get as well bc of the location etc but that comes with many headaches....Make sure you get many good recommendations for a decent property manager as there are lots of shifty ones here. 

Good luck but buying here is not always the best thing to do. Stress stress and more stress!

 

[Africaida]

Vacation house in Bali ?

I am puzzled...How do people who , in their own words, are "total strangers in the area", consider buying a house with no intention to live there permanently....

 

[windeguy]

I am puzzled...How do people who , in their own words, are "total strangers in the area", consider buying a house with no intention to live there permanently....

People with more money than... Well, you know what I mean.

 

[joe]

Plus, what are the monthly maintenance fees and the electrical payments + the 100% hispaniola tacks on to it. Renting is a no brainer.
Having said that, if you absolutely have to buy, boy have I got a deal for you!

 

[jd426]

I'm curious about something .. IF someone does Choose to BUY , and then chooses to SELL a short time later
.. How much of a Percentage do you Lose to Commissions , etc etc.. I have heard some crazy #s.. and I'm not talking about Loss in Market price, but the actual cost or Commissions involved in SELLING Real Estate .. is it 5% , 7% , 10 % , even More than 10% ?? and that is a LOT of money, for a 3rd world country, no ?

Its almost comical how Real Estate people will try to make you feel there is a "shortage of Inventory" ...when you are a BUYER.. but when you try to sell.. they want you to take a deep loss or you will sit on it for quite a while.

 

[joe]

Commision generally is 5%. However some asking prices are hugely inflated. I won't even comment on what I think about real estate agents.

 

[jd426]

Commision generally is 5%. However some asking prices are hugely inflated. I won't even comment on what I think about real estate agents.

They cant be worse than the ones here in the states , can they ? Lmao
I had one recently tell me ( i play stupid real real good, and I egg them on when I know I got one who thinks she or she is slick )...
as I am looking for a house for a family member.. but just looking.
So she tells me " there is a huge shortage of INVENTORY right now, so if I show you some homes ( ie, if you waste my time to use my services) , you need to be prepared to go to FULL price, or even ABOVE FULL price, > if you find one you really Like<, LIKE the one you told me you are interested in" in other words , if i see you are in love with a House, I will BS you into paying full price, possibly bidding against yourself ..
Which I have In fact just recently witnessed , in a FSBO sale of all things
.. Guy bid against himself. paid full asking price .

Some of the Agents are absolutely shameless ..
but then so are some Owners who figured out the game as well .

I guess my rambling point as it Related to all Real Estate, and Especially the DR, where you are already in a different state of mind, on Vacation mode so to speak..was dont ever fall in love with a piece of real estate.. the Agent, or owner will pick up on it, and nail you to the cross... Be ALOOF, Indifferent, put on your best Poker face , or be prepared to bend over ...

 

[drstock]

If you will only be coming for two or three months at a time, I would hold off on getting Residency and just pay the exit "fine" until you are certain about living here. The only problem is if you want to drive a car here, you need a Dominican licence after the tourist visa expires. You don't need a licence to drive a motorbike though.

 

[Harleysrock]

Commision generally is 5%. However some asking prices are hugely inflated. I won't even comment on what I think about real estate agents.

I thought it was more around 8-10% here. Obviously people screwed us over lol and are trying again when they said they would bring it down to 8%. Good to know Joe as this was not just one person but many who said 8-10%.

 

[Seamonkey]

Commision generally is 5%. However some asking prices are hugely inflated. I won't even comment on what I think about real estate agents.

Real Estate commission in the DR is 10% unless you agree on anything lower.

 

[A1exB]

People with more money than... Well, you know what I mean.

LOL folks, I'd love to be a half that rich as rumors I hear about me.
On serious note, sorry for confusion, I should have said that we are contemplating idea of having property in DR. Besides price tag attached to the purchase, it is rather serious commitment, so we are just trying to weigh carefully our options.

I sincerely appreciate your feedback, a lot of helpful info. It seems that getting residential status has quite hefty price tag attached. With our three kids, it would be times five, almost the price of yet another condo. Probably, sticking to paying exit fee is cheaper option, but since that's really legal twilight zone, you are at the mercy of local government hoping they would not change rules tomorrow.

We would probably start slowly, come over for few weeks to get a vibe and play by ear then.

Correct me if I am wrong, but impression I got is if you buy property, you'd better have it attended either by security or someone doing maintenance, right? And what would be fair price for average 2 bedroom condo or 3 bedroom villa?

 

[Harleysrock]

If you do not have it in a good gated community then you must have security or someone you trust (which is hard to find here) watching your property.  Properties cannot be left alone here or everything including windows and flooring will be removed from the place!!!
You will be fine without residency, that should be the last of your worries. 

 

[DRob]

First, welcome to DR1!

Don't know how long you've been traveling to DR, or how much time you've spent in country. The conventional wisdom on the board is generally to TAKE YOUR TIME and rent in various areas. Sosua is nice, but you might find you like Cabarete, Cabrera, Las Terrenas, or somewhere along the east coast even more. 

Santiago isn't on a beach, but it's comparatively high in the mountains, has much more infrastructure and cultural offerings, and is a good bit cheaper. It also has really good international schools.

My suggestion is to rent, move around a bit, figure out what you really find to be comfortable. Odds are that reasonably-priced villa in Hispaniola will still be there next year. 

Best of luck!