Canadian considering buying property in DR

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nscanada

New member
Jun 10, 2011
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As the title suggests, I am a Canadian considering buying a villa in a gated community in the Sosua/Cabarete area. This would mainly be an investment property, and I am looking for information from people in the same boat. I would be renting it out most of the year, spending maybe only a week or two in the DR. There is the possibility of my living in the DR for part of the year when I retire, but that's still a good 20 years away. Some of the questions I have are:

1. Is real estate in the DR a good investment? Does real estate in the DR appreciate in value (long term) like in North America? How difficult is it to sell a home in the DR?

2. How much does house insurance cost? Does it cover damage caused by hurricanes?

3. Do the management companies do a good job of renting out the homes?

4. After paying the managment fees, maintenance fees, taxes, mortgage, income tax on the rental income, etc., does the house pretty much pay for itself?

5. Are the gated communities as safe as they sound?

I'd appreciate any insight you can offer! Thanks in advance for your help.
 
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pularvik

Active member
Jan 2, 2011
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1. No. No. Very difficult.

2. Sorry, don't know

3. Depends who you are using,- needs lots of homework on your part. Lotsa horror stories so be certain.

4. No

5. yes

Do not buy property in the Dr as an investment. Rent a nice villa for a couple of weeks for holidays. Spent the time getting to know the country,- where and how you would like to live. Everybody is trying to sell their property,- buyers are few and far between. Buy RSP's and come for holidays and enjoy.
 
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CFA123

Silver
May 29, 2004
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nscanada,
pularvik's answers are correct for the majority of properties.
there are few that pay for themselves with rentals & for the most part those that do have extremely active/involved/connected owners working hard to keep their property rented. also, properties may start to appreciate again at some point. right now, very little is moving.

overall, the headaches and potential problems for an absentee owner far outweigh the benefits. i would strongly advise investing your money near where you live & taking the proceeds for a nice relaxing vacation each year to the destination of your choice. you will have fewer headaches 50 weeks out of the year and enjoy your 2 weeks of vacation without doing 'projects' at your vacation home.

ps: answer to #2 about insurance
i happen to have a quote on an apartment building (covering several apartments)
$850,000 building coverage (fire, hurricane, riot, earthquake, etc) with 2% deductible
$100,000 in civil liability
$6500 annual premium.
whether in case of major hurricane or big earthquake the company would have funds to pay off... who knows.

regarding #5, I disagree with pularvik's answer. not all are safe. there are varying degrees of security... even with developments that are side by side
 
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DMV123

Bronze
Mar 31, 2010
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As with all investments it is individual - based on how much you know, what you buy, where it is, what you paid for it, how marketable the villa or apt are, who you hire, who you trust, how much time you have and how involved you plan to be.

this is NOT a hands off market.

You must do your homework.

You must know who you are working with - get referrals from this board.

You must visit often enough to have a handle on what is going on. Not all properties or communities are created equal.

If you are looking for cash flow understand the North Coast has been hit hard - some projects do well in rentals and some do not.

YOU must be in it for the long term. Flipping here or just getting out of a bad purchase can be very tough.

All that being said, IMHO there are some very good values here and very good potential investments! (disclaimer - I am not a realtor )
 
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Tonydomrep

Member
Feb 22, 2009
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If its still 20 years away...

-Buy now some piece of land in a part where it should be good. Waterfront/oceanfront is never bad. Oceanview also. At a max. of 10 usd per m2.
-wait 20 years
-then sell it and buy a nice villa for you retirement or build a villa on your own land
-in the meanwhile rent a villa for these 1 or 2 weeks
 
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zoomzx11

Gold
Jan 21, 2006
8,367
842
113
1. It can be if you know what you are doing. For most its no!
2. Houses here are solid concrete with a concrete roof. What is a hurricane going to damage. I have had bad luck with insurance companies here and do not trust them to pay off.
3. Some do better than others but they are expensive.
4. Rarely. Its everybodys dream to have it pay for itself via renting but its pretty rare. Watch out for high maintenance fees in the "guarded" communities. These fees have a habit of going up and up.
 
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william webster

Platinum
Jan 16, 2009
30,247
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Tonydomrep said:
If its still 20 years away...

-Buy now some piece of land in a part where it should be good. Waterfront/oceanfront is never bad. Oceanview also. At a max. of 10 usd per m2.
-wait 20 years
-then sell it and buy a nice villa for you retirement or build a villa on your own land
-in the meanwhile rent a villa for these 1 or 2 weeks
Click to expand...

I'm not sure what water you will see for that price.....
 
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Tonydomrep

Member
Feb 22, 2009
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Waterfrontage next to Playa el Valle in Samana for example
Oceanview at Playa el Valle for example
Oceanview at Playa Rincon, el Valle and the Bay of Samana
 
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Contango

Banned
Dec 27, 2010
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The key is to be able to rent out your villa/condo weekly during high season or monthly during the low season. Having said that I would buy a "condo" instead of a villa, beach front and golf.. I know you wrote North Coast, but the BEST project ive seen and ive done my research is "Iberostate" its inside the resort, will have low mait fees and gives the RENTER Beach and Golf within the resort.. From an investment perspective in my opinion this has the best chance to pay for itself over time..
The prices are reasonable and its all under Iberostar Grand, the number one Hotel currently in the Country...
PM me if you want more info...
 
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Hillbilly

Hillbilly

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Jan 1, 2002
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Go real slow...at Punta Rucia asking price is $370 a meter for beachfront...
that property in Saman? is totally undeveloped and far from anything. A friend's place on Samana Bay went for 1.4 million US a few years ago, and no beach, just rocks...

HB
 
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william webster

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Jan 16, 2009
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Hillbilly said:
Go real slow...at Punta Rucia asking price is $370 a meter for beachfront...
that property in Saman? is totally undeveloped and far from anything. A friend's place on Samana Bay went for 1.4 million US a few years ago, and no beach, just rocks...

HB
Click to expand...

I agree.... that $10 / meter is missing a zero..... minimum, one zero.... for any place where you hear water
 
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CaptnGlenn

Silver
Mar 29, 2010
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I don't know the north coast very well, so this might be off topic. As for the east coast, you should have no problem renting a well furnished/equipped/maintained condo in any of the few ocean fronting projects in Punta Cana/Cortecito It might not be a cash flow positive investment ... but it will offset costs. The projects just off the beach are good too, but obviously not quite as popular. As anywhere, the value of Real Estate is based on only three things: Location, Location, Location. As for future value / appreciation... well, ask all those folks who bought during the bubble in S. Florida, Las Vegas, or just about anywhere in the U.S. about predicting the future. Nobody has a crystal ball. BUT... I will say the D.R. is about the most affordable and most stable value in the Caribbean today. (Price a property in the Bahamas, or wherever... you'll see what I mean.)

DO YOUR HOMEWORK. GET A LAWYER, (Guzman) DEAL WITH A GOOD AGENT. (you can P.M. me for referrals on the East Coast)
 
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Acira

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Sep 20, 2009
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william webster said:
I agree.... that $10 / meter is missing a zero..... minimum, one zero.... for any place where you hear water
Click to expand...

No its not but be prepared then for a plot of land in the middle of nowhere, no connection to water and electricity, phone/internet connection?, these plots are available but in my eyes, only for long term investment and the "hope" that the region will develop some day.
Its a risk but isn't that always the case in RE?
 
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william webster

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Jan 16, 2009
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Acira, the $10 came earlier as a cost basis for beachfront, or oceanview property......

I question that price.... so did HB

Good cliff property... ocean view , can be had for +/- $50 meter.... the further back, the cheaper the land.
But not all locales have hillside views
 
Hillbilly

Hillbilly

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Jan 1, 2002
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There was a recent report on one of the major networks in NYC about prices for property on the Jersey Shore. Places where I visited after college...4 blocks off the beach at $400 a m2....yeah, I'd pay that!!! HEHEHE...You're kidding right, HB? Yes, Virginia I"m kidding. I would not ever pay that for a place I could use two or three months out of the year, when I can buy beachfront for less than that in the Caribbean/Atlantic area in the Dominican Republic!!

Are you prejudiced HB? Yeah, a little

HB
 
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Tonydomrep

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Feb 22, 2009
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Correct. Prices i am talking about are for undeveloped areas. The prices are as well undeveloped. But we are talking about a 20 years timeframe.

What where the prices 20 years ago in Punta Russia?
I know the prices 20 years ago in Las Terrenas at Playa Bonita and Playa Coson where less than 1 dollar per m2. There where even beach land owners who exchanged properties on the beach with land suitable for farming, because on the beach nothing grows. Now Playa Bonita 400 usd per m2, Playa Coson 300 usd, El Portillo 700 usd per m2.
 
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Acira

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william webster said:
Acira, the $10 came earlier as a cost basis for beachfront, or oceanview property......

I question that price.... so did HB

Good cliff property... ocean view , can be had for +/- $50 meter.... the further back, the cheaper the land.
But not all locales have hillside views
Click to expand...

Like I said WW, very nice ocean view, good cliff property, beachfront maybe not for $8 to $10 but be prepared to find it for the prices mentioned in the middle of nowhere with difficult access roads but its still available on this Island.
 
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william webster

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Jan 16, 2009
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Acira said:
Like I said WW, very nice ocean view, good cliff property, beachfront maybe not for $8 to $10 but be prepared to find it for the prices mentioned in the middle of nowhere with difficult access roads but its still available on this Island.
Click to expand...

Oh, its available.... not what you'd call a gringo property..... you're right, it'll be up in the hills, very scenic - Spanish will be prerequisite...milk from the neighbor.... groceries (??)
 
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Acira

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Sep 20, 2009
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william webster said:
Oh, its available.... not what you'd call a gringo property..... you're right, it'll be up in the hills, very scenic - Spanish will be prerequisite...milk from the neighbor.... groceries (??)
Click to expand...

Yes exactly right WW, very isolated plots at the moment, sometimes difficult to access and no big stores in the neighborhood but then again, like said, what will it be in 20 years? I don't know that either, don't have a glass ball to see in either :)
 
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Tonydomrep

Member
Feb 22, 2009
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the 10 usd per m2 is oceanfront, not beachfront. For sure, its not next to Wallmart!
The more developed the higher the price.
What it will be in 20 years? Nobody knows. Thats true. Whatever investment you do is always... what in 20 years...

If you put the 10 usd in a banc right now, one with triple A rating... What will you have in 20 years?
If you buy an apartment now, what do you have in 20 years?

Nobody knows...

But whatever, its always nice to have an oceanfront property. Even to enjoy the view and the water.
 
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