Property and Rental prices in SD

My father in law keeps buying property and then doing nothing with it, I don't get it either. He lives as if he hasn't two pennies to rub together, yet he keeps buying property every now and then and just,,,,,,, nothing, I've asked him why he has all this property yet never seems to upgrade his life or his things, but I can't get an answer I can truly understand just 'it is good to have as much property as possible, it is good for the future'. Either he doesn't understand the concept behind property developement or I don't get the idea of owning properties just to have it, just standing there doing nothing.
But he pays nowhere near that price, quantity rather than quality seems to be his thing.

"...And I am guessing this has happened a few times, because there seem to be a lot of people waiting for this "lottery" as opposed to selling their homes for fair market value..."

Yet another example of Dominican uniformity... same goes for every part of the island...

MJSantoDomingo said:

Yet all of them are so over-priced

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Probably most properties on sale are overpriced, to give room for negotiation, because nobody will pay the sticker price.

You say that 75.000USD is a ridiculous price for a 3 bedroom appartment. Obviously it's difficult to say if it's expensive or not, with so little information, but how much would it cost to have this appartment built?

That's the first factor i would consider because "true market value" is not a valid concept in DR's real estate, for what I can see.

Get 3 tasadores to assess a house, I'd like to see their reports.

Barnab?

MJSantoDomingo said:

Yes - but in many ways I can understand your father, he is investing in property and someday it will be worth more.

I am baffled by the people with the for sale signs out today thinking that somehow a sucker will come along and pay 5-10x the value - oh, maybe they will agree to "bargain" down to 2x the value.
The do not set the price based on what properties have been selling for recently - they base the price on what every one else is "asking" for, even though the asking prices are multiples over the value of the house, because if they do not "need" to sell.

Brings up another odd point - here, when a house sits vacant for a long time, they do not lower the price to sell it, rather they just let it sit and get worse. I saw one house that had obviously been vacant for at least a year. The asking price had not changed at all. I pointed out potential and real problems around the house and he said "is normal here". Walked away from that one, because who knows how many hidden problems there would be.
and, correct me if I am wrong, but I do not think there are any real "home inspections" here. It is more like buying a used car as is...

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Mortgages are ridiculous in DR, so many people buy for cash, and have little if any need to sell quickly. In their mind, the property is worth a certain amount, and they'll delay selling it - for years, if necessary - until they're happy with the price.

Same thing happened in the states, with folks really thinking their townhome shot up 100k in value because they painted and added granite countertops.

In addition, those towers you see in DR aren't residential complexes so much as laundromats. There's a lot of money, illicit and otherwise, in DR right now, and the Colombians, Venezuelans and other folks who like paying by the briefcase-full tend to prefer real estate.

Finally, even regular houses have lengthy expiration dates. I mean, it takes an awful lot to mess up a concrete house, and fixing it back up is easy, given the super-low labor costs.

DRob said:

Mortgages are ridiculous in DR, so many people buy for cash, and have little if any need to sell quickly. In their mind, the property is worth a certain amount, and they'll delay selling it - for years, if necessary - until they're happy with the price.

Same thing happened in the states, with folks really thinking their townhome shot up 100k in value because they painted and added granite countertops.

In addition, those towers you see in DR aren't residential complexes so much as laundromats. There's a lot of money, illicit and otherwise, in DR right now, and the Colombians, Venezuelans and other folks who like paying by the briefcase-full tend to prefer real estate.

Finally, even regular houses have lengthy expiration dates. I mean, it takes an awful lot to mess up a concrete house, and fixing it back up is easy, given the super-low labor costs.

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So... Drug dealers invest into all the towers in the DR(the majority of towers as you said) in order to launder their cash?

I guess you know something the rest of us don't, since I have yet to come about ANY real good deal on these towers being offered! Where, when and how exactly will these laundering operations make their return on that cash?

To the best of my educated knowledge, laundering operations concentrate in commercial type of quick money movement biz here. Those that invest into large projects, like towers, hotels, etc... Are the ones that came to the DR to settle with their dirty money on haul...

People are clueless about the RE sector of the DR here on DR1 for the majority!

#1 - Dominicans don't buy using mortgages! The minority number that does, does it because they can afford to pay for a few years the balloon rates and aim to repay the whole thing in the mid term, versus a long term mortgage as it's the norm elsewhere.

#2 - Dominicans don't shop on the streets for property! We buy via friends and social circles that provide "tips" on available "good offers". These good offers are exactly the type of RE that NEEDS to be sold, because the owner NEEDS cash and quick. The price is more reflecting of the real asset values of the property and not a "I ask this much-until I get it" type of price.

#3 - Prices on the asking market reflect the owner's willingness to part with said property, but not out of economic need. They post those "for sale" signs because they consider the price they ask for the property, to be around the mark of what they would use to further other ideas out of their budgets.

#4 - There's no such thing as a "buyer's market" in the DR! It's a solid sellers one! Yo want it that bad? That's the price it will cost you! You want it and are willing to wait for them to need the cash you're willing to offer? Then get ready to wait for years, even a decade for it!

#5 - Why do we "buy" property for seemingly just "Keeps"? Inflation! It works better than keeping your cash at the banks in a savings account. You can make it liquid fast by shopping the property at a lower price than the seat and wait asking tag. RE in the DR adjusts automatically for inflation!

#6 - House inspection? Are you kidding me? This is the DR!!! What are they going to do? Rip open the concrete walls to inspect the pipes? Dig the foundation to see how well built the home is? Pulverize the main columns to check if proper rebar was employed in the construction? Check for termites?!!?

Buying a house in the DR is like buying a fire safe for personal stuff back where you came from... It looks god and strong? It's thick where it needs to be? Good materials to the touch and eyes? But do you lit a fire under it to test it before you buy it?

In Gazcue, for instance, the little apartments.. and I mean little.. start at around 2 million.. Three million for a three bedroom apartment does not sound absurb in a good neighborhood. My building is old and you would most likely have to upgrade the plumbing and wiring. Apartments start at 4 million for the two bedroom. Two apartments in the complex have sold at those prices in the last five years.

If you're looking for a rental, follow these steps.

1) Walk around the area you want to live, note down all the for rent signs etc.
2) Chat with the security in the building, ask if they know who is renting and get a direct number if possible.
3) If your Spanish is not "Dominican" fluent, get a decent Dominican Spanish speaker to make the initial phone calls, get pricing, owner, terms etc.
4) Get your "Dominican" Spanish speaking friend to follow up on appointments to view.
5) At the viewing sell the fact that you're a "gringo" and you pay on time and will not destroy the apartment. e.g. remove all the lights and fittings. Very common here!
6) Low ball them and let them know that it will be sitting for ages at the price they want.
If they are not willing to negotiate, walk away. You will get someone that will bite, it's a renters market right now

For buying a house, to have an idea start finding out for how much the terrain is being sold per m2 in that particular neighborhood and calculate the worth of the piece of land you are buying. I bought my house a year ago for a price that I estimated a little under the true value. Two weeks ago in the residencial next to me, same houses, same sector, same type of residencial, they are offering the same house for 175% that amount. (if they sell I put a sign as well).

Anyway, this does show it's a seller's market. I could buy rather cheap while the owners wanted to proceed with building an appartment building, knew they could get more, but werent't really losing any money while they bought the house 11 years ago when it was being constructed.

And besides, as mentioned in other posts, people here don't take 20 or 30 year mortgages to pay for their house. So the need to sell is not often their, unless there is a divorce at stake or they need cash to invest in something else.

MJSantoDomingo said:

Not being primarily a mortgage based real estate country - it is understandable how many things are different. It is much more similar to the used car as-is sale type approach except applied to houses and apartments for sale.

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Remember the DR is a thriving economy and therefore a large middle class. No Real estate crisis here!

This said, it is always a sellers market even though every 4th property seems to be for sale...All of them own their properties outright and have no urgency from the sale revenue, plus there are always more buyers than sellers...this said....The DR is a SELLERS market!!!

MJSantoDomingo said:

As confusing as that might be for someone - it actually makes sense from going around looking.
Yes - every 4th property seems to be for sale - yet, there are more potential buyers than "real" sellers, but that does not make it a buyers market, because most of the sellers do not need to sell - so it remains a sellers market.

Unless you get info on someone that needs to sell... only then can you turn it, because they actually need the money sooner rather than later - well, hoping to find that good deal somewhere - which is another reason I just want to get a decent rental place, know that I can be there with family for a year and see what develops. Because I have been told about a few good deals in the past, but they were never when I was ready to do anything. So the idea now is to find a decent 3 bedroom apartment in a safe neighborhood, especially since I travel back to the US for work often.

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I was a broker back in Canada years ago... A sellers market was usually defined when there were far more motivated buyers and a lack of available properties for sale... Now, just because Dominicans have no idea how to proerly appraise a property and list it at an inflated price (not because they really want to sell, moreso in the case an "too good to refuse" offer comes in) does not make it a sellers market... If it really was a sellers market, there would be an abundance of buyers willing to pay market price... Do you really believe there are a large supply of buyers here? its not a sellers market, its just again part of the "dominican way" of doing business. btw, what, where, and when, are you looking to rent here? I am in a 3 bedroom apartment now in Bella Vista for past 3 years and may move in a few months maybe sooner..The landlord is an excellent guy(friend)! pm me for more info!

There are a few good rent to buy opportunities springing up in Santo Domingo, I am just waiting to hear why they are not a good idea. Anything contracted over a long period in DR has got to be suspect.

Elsewhere in the country is cheaper and in places with good connections to SD. e.g. advert in DR1.
Punta Cana : Dominican Republic Real Estate : Condo For Sale

yapask1

A Dominican will buy an apartment for $200k and the next day put a For Sale sign $400,000. If they get an offer great, if not no problem. Even if they get an offer for $400,000, then might not sell. Maybe they will increase the sales price to $500k.