I want my house!!!

[Chip]

With all due respect to all that have offered their input I would like to repeat that property values have been increasing here in Santiago. We are having a mini construction boom as well. In addition to that construction materials are increasing as well.

I also doubt that any property bought in the last couple of years has devalued which means they have only one way to go and that is up. So now is the time to buy a lot and build imo.

Furthemore, I live in Los LLanos de Gurabo and in 6 years I estimate 100 homes and 300 apartments untis have been built within 1 mile of my house. Currently there are about 4 homes under construction and an apartment building being built in my subdivision and across the street another 10 homes. This demand has driven the property values up. This is also being witnessed in other areas on the East side of Santiago.

 

[cobraboy]

Unless there are significant circumstances (a fire sale property, unique uses of the property, etc.) I sure as heck wouldn't buy in the DR from a economic standpoint.

I don't believe an economic model can be built that shows purchasing is cheaper than renting.

And owners of higher end properties know the difficulties of getting really solid non-Dominican tenants.

Seriously: if you find and rent a great property, pay your rent on time or even a little before due and take good care of the property, it's almost like your landlord in an employee trying to please the boss.

Heck, our landlord even come once in a while to borrow $$$ against future rent payments. It's like were an interest-free loan company that she could never find elsewhere.

Shalena, reconsider your decision. $1200-1500 a month in a mortgage payment is really high compared to your rent. Debt is a killer for folks. It's a large caliber gun to your head every month. And if your circumstances change-and a look back on your life you'll probably find it has several times in recent years-that property becomes illiquid...unless YOU want to take a bath on it.

You'd be better off renting, and doing the Dominican thing: buy a lot and building on it with cash with the $$$ you save between rent & the $1200-1500 mo. AND when done, you'd have a much lower debt level if any at all...

 

[SKing]

Well, I am thankful for all of the advice. I don't think that I will buy right now. Looking retrospectively, I am very sure that it is my heart ruling my brain. When I lived in Santiago before I lived basically in this same area. I love my neighborhood and it is up and coming, houses are being built everywhere. I love my kids school. My youngest is 2 years old and I want him to grow up in this area.
That being said, I saw many houses and living in the neighborhood before, I have been to many neighbors houses and this one is, like I said before, the first that I didn't say "Wow, such a nice house but I would change...." or "If only it had..."
I am not sure how long the house was empty before I rented it but the owners are VERY anxious to sell, at the signing of the lease I was asked numerous times if I was sure that I din't want to buy the house.

I am curious about the rent to own idea but haven't ever heard of that in DR. But since the owners live in New York, maybe they would be interested. What should I offer? My rent is 20,000RD. Maybe offer to pay 30,000RD per month (starting when my lease is up in August) with the extra 10,000RD going towards downpayment. And option to buy the house in 5 years. At least that way, they know that they have steady income for at least 5 years, and I have a chance to make sure throughout the years, that that is what I want to do. They would have to keep the price for me at 6.5 million RD right? What else is there to consider? I would like to propose this to them but what else do you guys think?
I don't want them to sell the house to someone else while I am renting or after my year lease is up. I am emotionally attached. I would not be so scared if they were not building a gazillion houses in this area, and the 2 houses beside me were just finished construction and sold within 2 weeks, BOTH of them! And my house has green area (yard) twice the size of both those houses.

I want to propose the rent to own, can anyone give me insight on what to propose? I am thinking that in the 5 years that I am renting to own I can save $120,000 ($2,000 US per month) and then after the 5 years with the 10,000RD that I would have been paying extra that would be 600,000RD ($15,385) for a total of $135,385 which leaves me technically only $31,615 US (1,232,985 RD) left to pay which I could potentially make in a summer here in NYC at my job working OT, or working 2 jobs just in 1 summer.
Sorry, I'm rambling...thinking aloud.

Suggestions??

SHALENA

 

[SKing]

Unless there are significant circumstances (a fire sale property, unique uses of the property, etc.) I sure as heck wouldn't buy in the DR from a economic standpoint.

I don't believe an economic model can be built that shows purchasing is cheaper than renting.

And owners of higher end properties know the difficulties of getting really solid non-Dominican tenants.

Seriously: if you find and rent a great property, pay your rent on time or even a little before due and take good care of the property, it's almost like your landlord in an employee trying to please the boss.

Heck, our landlord even come once in a while to borrow $$$ against future rent payments. It's like were an interest-free loan company that she could never find elsewhere.

Shalena, reconsider your decision. $1200-1500 a month in a mortgage payment is really high compared to your rent. Debt is a killer for folks. It's a large caliber gun to your head every month. And if your circumstances change-and a look back on your life you'll probably find it has several times in recent years-that property becomes illiquid...unless YOU want to take a bath on it.

You'd be better off renting, and doing the Dominican thing: buy a lot and building on it with cash with the $$$ you save between rent & the $1200-1500 mo. AND when done, you'd have a much lower debt level if any at all...

Yes, it seems that building and rent to own are the best options...

SHALENA

 

[SKing]

This will sound crazy but I don't think of selling something when I think of buying it. I would like whatever house I end up with to be kept in the family if I die, for my kids in case as adults they return to the states to live, they will always have somewhere to go in DR. I would never want it resold.

SHALENA

 

[william webster]

I'm of mixed mind here.... I have and do own properties in 3 countries.

I lived in the US from 1995 to 2009 and rented all the time (still do) b/c I was in the country on a visa and might be 'disallowed' at any time.
I used the capital I had to buy/operate a business instead of a house.

On the other hand, a house is most people's largest asset - their savings , so to speak.

Advice was given earlier to rent AND save to build a stash for later use on a house. That takes discipline, which you probably have.
Its good advice if you feel you can stick to it.

I doubt the house will get sold from underneath you. Most owners/landlords are savvy enough to deal w/ the tenant before going to the open market.
Property owning rules dictate that before going to the open market - ask the tenant (if there is one) and the neighbors first.

 

[JMB773]

How can make a claim like this w/o any figures? Do you own property here in Santiago?

I paid US115,625 in 2006 at an exchange rate of 32.

My house is worth US128,000 today (if not more) at an exchange rate of 39.

That is an increase in 9%. Next.

Chip your house is only worth what somebody is willing to pay for it. Chip this is where so many Americans made their mistake in believing what their house is worth.

How fast do you think you can get 128,000USD in you hand if you put a " For Sale" in the yard today? Numbers can be VERY misleading when dealing with real estate Chip. What if I told you in 2006 the owner what have taking 95,000USD for your home. Buying and selling real estate is a "Poker Game" especially in DR. Dominicans want to make a LARGE profit in their in selling a home and when a" gringo" is involved CHA CHINGGGG!!!!!!

BTW Sking don't do it!!! 6.5 million is alot of money for a home in DR.

 

[JohnnyBoy]

Shalena there is a saying Cash is King. If you dont have at least a thirty percent down payment in your pocket, you arent looking for a house. If someone is hard up for cash and you have a decent lump to show them you may get some favorable terms if they finance.
I have seen people buy homes for cash at one third the asking price. Right now you only buy when the deal is begging you.
If you are trying to scramble payments this deal isnt even talking to you.
bueno Domingo

 

[cobraboy]

Keep in mind that Tenants have considerable rights under DR law. If you pay your rent on time it's very, very difficult to have a tenant vacate the property without illegal physical force being involved.

So if you have a house you like and pay your rent on time, even in the worst case scenario you'll have ample time to find an equal situation.

Our situation is unique in that in addition to the two of us and the animals, we have an SUV, huge 15-passenger van, a trailer, 11 large motorcycles, a huge amount of equipment and supplies and require good, solid innerweb for yet another business we have. All those components will take a while to replace...and I'm not the least bit worried about being rushed into doing so should it become necessary.

 

[Chip]

cobraboy

You make a good point. However, with 40k one can get a loan for 60k and buy a property and build the first level and do the second level at some point in time. The monthly payments would be US1300 the first year, 1200 the second and so on. This is based on a typical home loan at 19% from Cooperativa San Jose. Additionally, any extra payments of capital reduce the monthly payment.

I see this option as being attractive to someone who plans on establishing themselves here in Santiago but maybe no ideal for retirees.

 

[cobraboy]

cobraboy

You make a good point. However, with 40k one can get a loan for 60k and buy a property and build the first level and do the second level at some point in time. The monthly payments would be US1300 the first year, 1200 the second and so on. This is based on a typical home loan at 19% from Cooperativa San Jose. Additionally, any extra payments of capital reduce the monthly payment.

I see this option as being attractive to someone who plans on establishing themselves here in Santiago but maybe no ideal for retirees.

Debt kills, Chip. Long after the adrinaline buzz of "new" wears off, it destroys the soul, relationships and personal options in life.

I can't imagine having a $1200 nut to crack every month. I can't imagine a 19% interest rate on ANYTHING. I can't imaging living in a half-built structure with rebar sticking out of the roof and the place looking like a construction project. Maybe I haven't become that "Dominicanized..."

I don't believe a real "boom" is going on. While there is construction (we've debated where the $$$ is coming from on DR1 for years), virtually every property you see is for sale and very, very little is actually changing hands.

And with new tax laws coming on that create actual property taxes on properties you'll see even more come on the market.

Just try selling your house and see how long it takes to get a real offer anywhere near what you think your house is worth.

 

[Chip]

Debt kills, Chip. Long after the adrinaline buzz of "new" wears off, it destroys the soul, relationships and personal options in life.

I can't imagine having a $1200 nut to crack every month. I can't imagine a 19% interest rate on ANYTHING. I can't imaging living in a half-built structure with rebar sticking out of the roof and the place looking like a construction project. Maybe I haven't become that "Dominicanized..."

I don't believe a real "boom" is going on. While there is construction (we've debated where the $$$ is coming from on DR1 for years), virtually every property you see is for sale and very, very little is actually changing hands.

And with new tax laws coming on that create actual property taxes on properties you'll see even more come on the market.

Just try selling your house and see how long it takes to get a real offer anywhere near what you think your house is worth.

I said a mini boom. Properties are moving here in my part of town. Like I said, we have had over 400 units built in the last 6 years where I live. Most of these units have been bought or rented.

 

[Chip]

Chip your house is only worth what somebody is willing to pay for it. Chip this is where so many Americans made their mistake in believing what their house is worth.

How fast do you think you can get 128,000USD in you hand if you put a " For Sale" in the yard today? Numbers can be VERY misleading when dealing with real estate Chip. What if I told you in 2006 the owner what have taking 95,000USD for your home. Buying and selling real estate is a "Poker Game" especially in DR. Dominicans want to make a LARGE profit in their in selling a home and when a" gringo" is involved CHA CHINGGGG!!!!!!

BTW Sking don't do it!!! 6.5 million is alot of money for a home in DR.

Do you have property in the DR? Or better, would you ever buy property in the DR?

 

[SKing]

I'm of mixed mind here.... I have and do own properties in 3 countries.

I lived in the US from 1995 to 2009 and rented all the time (still do) b/c I was in the country on a visa and might be 'disallowed' at any time.
I used the capital I had to buy/operate a business instead of a house.

On the other hand, a house is most people's largest asset - their savings , so to speak.

Advice was given earlier to rent AND save to build a stash for later use on a house. That takes discipline, which you probably have.
Its good advice if you feel you can stick to it.

I doubt the house will get sold from underneath you. Most owners/landlords are savvy enough to deal w/ the tenant before going to the open market.
Property owning rules dictate that before going to the open market - ask the tenant (if there is one) and the neighbors first.

So you don't think that the rent to own idea is good?

Chip your house is only worth what somebody is willing to pay for it. Chip this is where so many Americans made their mistake in believing what their house is worth.

How fast do you think you can get 128,000USD in you hand if you put a " For Sale" in the yard today? Numbers can be VERY misleading when dealing with real estate Chip. What if I told you in 2006 the owner what have taking 95,000USD for your home. Buying and selling real estate is a "Poker Game" especially in DR. Dominicans want to make a LARGE profit in their in selling a home and when a" gringo" is involved CHA CHINGGGG!!!!!!

BTW Sking don't do it!!! 6.5 million is alot of money for a home in DR.

[B]How do I know or find out what is a fair price? Hire a private appraiser? I didn't even know that there were appraisers in DR[/B].

Shalena there is a saying Cash is King. If you dont have at least a thirty percent down payment in your pocket, you arent looking for a house. If someone is hard up for cash and you have a decent lump to show them you may get some favorable terms if they finance.
I have seen people buy homes for cash at one third the asking price. Right now you only buy when the deal is begging you.
If you are trying to scramble payments this deal isnt even talking to you.
bueno Domingo

Good to know. I have 2 accounts (Associacion Cibao and Cooperativa San Jose), between the 2 I only have a little over the 500,000RD that they were asking for down payment. If I could rent the house for the 5 years and save what I expect to save, maybe at that time I just offer them what I would have saved at that point ($135,000) and get the house for that price. Problem is, I have also seen Dominicans who would rather let their house sit empty for years and years and years rather than go down on the price or rental price.

cobraboy

You make a good point. However, with 40k one can get a loan for 60k and buy a property and build the first level and do the second level at some point in time. The monthly payments would be US1300 the first year, 1200 the second and so on. This is based on a typical home loan at 19% from Cooperativa San Jose. Additionally, any extra payments of capital reduce the monthly payment.

I see this option as being attractive to someone who plans on establishing themselves here in Santiago but maybe no ideal for retirees.

The only reason that this is less attractive to me, because I had considered this route before is that I have had men working on the electricity, cisterna, and a few other things in my house recently and by the 3rd day I was completely and utterly frustrated and stressed out. With building, I don't know if I can handle that type of stress for 5 plus years. They start something, then theres always something unexpected, more money for this or that, things not finished on time...etc.


What if I just ask them for a 5 year lease? Not mentioning rent to own or anything, and saving up the cash and after the 5 years just offer them the $135,000 US in a take it or leave it situation. Then by that time, if they say no because they want the whole $167,000 US, I have enough money to buy land and build a whole house from scratch right then without waiting. Thoughts on that?

SHALENA

 

[Chip]

I honestly don't know about leasing a house. I would recommend just building the first level and have the contractor take care of everything. I'll have my architect friend draw up something to post later.

 

[CaptnGlenn]

With all due respect property values have been increasing since I've been here in 2006 in Santiago. For example my home which I bought for RD3.7M is now worth close to RD5M. Land has gone up as well, especially on the East side of town where there is a lot of development.

With all respect, EVERYBODY thinks their house is worth more than what they paid for it. The only way to know what any R.E. is worth is to try to sell it. In the U.S. values are initially determined by recent sales of similar property, (sale prices are public record and available to anyone), so, if there is a reputable realtor marketing the house, the "asking price" is usually (but not necessarily always), pretty close to it's real value. BUT .... and this is a universal rule ... is everyone listening??? .... Lesson #1 in Real Estate School ... the Fair Market Value of a property is defined as the amount where the price a seller is willing to SELL intersects with the price a buyer is willing to PAY. i.e. What it's worth is only as much as someone is willing to pay.

 

[JMB773]

So you don't think that the rent to own idea is good?



[B]How do I know or find out what is a fair price? Hire a private appraiser? I didn't even know that there were appraisers in DR[/B].



Good to know. I have 2 accounts (Associacion Cibao and Cooperativa San Jose), between the 2 I only have a little over the 500,000RD that they were asking for down payment. If I could rent the house for the 5 years and save what I expect to save, maybe at that time I just offer them what I would have saved at that point ($135,000) and get the house for that price. Problem is, I have also seen Dominicans who would rather let their house sit empty for years and years and years rather than go down on the price or rental price.



The only reason that this is less attractive to me, because I had considered this route before is that I have had men working on the electricity, cisterna, and a few other things in my house recently and by the 3rd day I was completely and utterly frustrated and stressed out. With building, I don't know if I can handle that type of stress for 5 plus years. They start something, then theres always something unexpected, more money for this or that, things not finished on time...etc.


What if I just ask them for a 5 year lease? Not mentioning rent to own or anything, and saving up the cash and after the 5 years just offer them the $135,000 US in a take it or leave it situation. Then by that time, if they say no because they want the whole $167,000 US, I have enough money to buy land and build a whole house from scratch right then without waiting. Thoughts on that?

SHALENA

Sking what happens one day if you decide you are tired of DR? It is alot easier to yell "Dueces" if you are a renter. The 20,000RD you pay a month for your crib is terrific. I know people who pay 350USD for a parking space a month.

Right now you have all the power being a renter, but once you are a home owner everything changes.

 

[Miro]

Salena, you said it yourself, the owner is anxious to sell, they probably haven't had an offer in years. In DR you can get 10% on your savings, are real estate values going up 10% a year? For what you are paying for rent the house is worth half of what the owners are asking. Chances are you could live there for years with no rent increase. How many Dominicans can afford 20 g's a month for rent? and how many tourists want to buy in Santiago?

 

[cobraboy]

Sking what happens one day if you decide you are tired of DR? It is alot easier to yell "Dueces" if you are a renter. The 20,000RD you pay a month for your crib is terrific. I know people who pay 350USD for a parking space a month.

Right now you have all the power being a renter, but once you are a home owner everything changes.

True.

I just can't see trading a $505 rent payment for a $1200-1500 mortgage payment.

Home ownership just ain't what it used to be.

 

[dv8]

with due respect to old time posters i beg to differ. i said before that because of the situation back home (communism legacy) and then a long spot of living in london (property prices on the constant rise) i am personally in favour of buying. but buying with dry and cold mind and only great opportunities.

contrary to what everyone here says and ever said we bought (well, miesposo but it was in the name of both us us) our first property in DR within three months from my arrival here. we sold it a year or two later at 700% profit. yes, you read that right: we sold at 7 times more than we bought and that is after RE costs. the house we have now was another opportunity: the gringo owners were bankrupt and desperate to leave DR. they took what we offered because we paid cash and on the very same day. we spend lots of money fixing the place but even after all out costs the house is worth at least 30% more than the total spent.

so, in all we made good buys but we had help and patience. for a year we lived in a barrio, noise, dirt and all that, because it was free, while we waited to build (like shalena originally planned). then this place came along and the rest is history.

in any case, shalena. i think it is better to sit, wait and watch. you never know what may come your way. but when it does grab the chance and do not let go. when you are ready to seriously consider purchase come to POP. i will take you to a friend who is a manager in BHD. you may get the chance to hear details about mortgages in DR and see what option there are.