Is real estate in the Dominican Republic a good investment?

Thanks to the increase in tourism in recent years, property prices have increased in the Dominican Republic. Although prices are steadily increasing by around 10% per year, this country remains one of the most affordable property markets in the Caribbean.

Is buying property in Dominican Republic worth it?

For several reasons, owning a home in the Dominican Republic is an excellent choice for people considering living there full-time or vacation purposes. The Dominican Republic is also a perfect option for investors wishing to buy a home to rent it out.

How can I Buy a Property in the Dominican Republic?

The very first step is to begin to look at properties with your realtor. This can be done in its initial stages online, but you will eventually want to arrive here in person and get a feel for what you like and desire in your home.

With prices for a 2-bedrooms vacation home with swimming pool in a gated community starting at US$135,000, have found many happy clients from North America and Europe. Homeowner has immediate access to great beaches, world-class restaurants, and best Caribbean shopping experience.

What are the costs when purchasing property?

Real estate fees are paid by the sellers or vendor, not paid by the purchasers.  Buyers are subject to legal fees, which are generally 1 to 1.5% of the purchase price. This amount includes all disbursements, due diligence and transfer of title. Additionally a 3% transfer tax (to transfer the title of the property to their names is incurred by the purchasers. The amount is based on the government assessed value of the property, which is always less than market value. Most buyers pay from $2000-$6000 US (depending on purchase price).

How Long Does the Process Take?

Property closings are generally 30­-60 days but are subject to the agreement between the buyer and the seller. On closing day, an agreement is signed between the buyer and the seller, or someone can act as your “power of attorney” to sign for you.

What documentation is required in addition to the Contract For Sale-Purchase of Real Property?

The Original of the Owner’s Duplicate of Title Deed and Notarized Signatures of Buyer and Seller on the Sale-Purchase Agreement. For non-Dominicans, a copy of the buyer’s passport, Certificate proving payment of the Transfer Tax.

Is real estate in the Dominican Republic a good investment?

The Dominican Republic one of the best places in the world to invest in rental or living property, thanks to a growing demand and undervalued prices. You can buy a rentable apartment for as little as US$130,000 or even less, prices still remain within reach when compared to other Caribbean islands. And you can get financing for the purchase in the Dominican Republic as a non-resident foreigner. Foreign investment, retirees, and holiday seekers have realized what excellent value for their real estate dollar can be had on the island. Most real estate experts expect an increase of about 10% to 20% per year; however, this number depends on many factors, including location, the condition of the property. Now that it is becoming so hot and well known with investors, higher appreciation rates can be expected.

Your new home can actually pay for itself whether it is intended as an investment or for use as a vacation property or a home in which to retire. There are many attractive offerings in a variety of residential projects, and the fact that the Dominican Republic has become the leading tourist destination in the Caribbean makes the process of buying a home here that much more satisfying at the best price.

Where is the best place in the DR to purchase real estate?

The Dominican Republic offers popular destinations for exclusive paradise lifestyle and high rental income. For our clients it comes down to best personal choice, budget, and lifestyle. With all of this make unforgettable experience, if you decide to come for living or vacation:

East Coast.

The most popular area for investment (La Romana, Punta Cana/Bavaro/Macao/Uvero Alto/Cap Cana). With the international airport , luxury all inclusive hotels and best beaches and world famous golf courses.

North Coast.

The North Coast (Puerto Plata/Sosua/Cabarete/Samana) is a second area with investment opportunities. It offers great value for dollar, excellent infrastructure in terms of shopping and services, and high rental rates. With exceptional beaches, mountain scenery, national parks and rivers being good rental potential for property.

South Coast.

The Dominican South Coast (Santo Domingo/Juan Dolio/Barahona/Bani) is one of the most beautiful and breathtaking areas of the country bordered by the Caribbean sea, lush natural parks brimming with wildlife, traditions and national history.

Why is real estate so cheap in Dominican Republic?

With the Dominican Republic having a surplus of land and fewer added costs, real estate is overall cheaper when compared to neighboring countries in the Caribbean. In simple terms, the availability of excess land in the Dominican Republic has made it cost-effective and cheaper to buy real estate

Can I rent my property?

Yes. Many buyers use their condos and villas as rental properties when they are not in the DR. Projects have internal rental programs or there are many reputable property/rental management companies in the area.

How often will my property be rented?

Occupancy rates vary depending on many factors: location, condition of the property, how well appointed the property is (homey, décor, stocked with tv’s, etc.) price point. To expect occupancy rates 75% of the year.
Almost all properties completely pay for themselves in terms of running costs, but most owners find they make a nice sum of income as well. We can certainly give you some tips on how to increase rental revenue from your unit.

What are the costs when purchasing property?

Real estate fees are paid by the sellers or vendor, not paid by the purchasers.  Buyers are subject to legal fees, which are generally 1 to 1.5% of the purchase price. This amount includes all disbursements, due diligence and transfer of title. Additionally a 3% transfer tax (to transfer the title of the property to their names is incurred by the purchasers. The amount is based on the government assessed value of the property, which is always less than market value. Most buyers pay from $2000-$6000 US (depending on purchase price).

What is CONFOTUR-Exemption Taxes Law?

Discover your next home in the Dominican Republic, most our properties are sponsor by CONFOTUR, Dominican Tourism Law, which allow you to get your property with tax and fees exemption. Also at Punta Bay you get premium services as well as a team of property experts that specialize luxury and second-homes market.

Buy a property in the Dominican Republic is one of the safest paths to tranquility, stability and economic fluidity. Increasing its value every year and always a desirable asset — they have potential liquidity and are less affected by market fluctuations.

How much will a management company charge?

A general rule is 20% of short term rental income, and 15% of long term income. This fee is for marketing the property, providing in/out services, supervision of the unit and staff, watching over maintenance issues, and services to renters. A good rental company makes renting your unit stress and work free for you.

How Do I Finance a Home Purchase in the Dominican Republic?

You can get financing for the purchase in the Dominican Republic being Dominican resident or as a non-resident foreigner. The terms, duration of loans and interest rates in the Dominican Republic are similar to the loan products available in the US and Canada. Bank financing through reputable institutions such as Scotiabank is available or local banks, both for new home construction or purchase of an existing home. Banks will often finance up to 70% of appraised and for new developers also offer to finance of up to 60% of the purchase price.

Do I need to be a Resident to Purchase a Home in the Dominican Republic?

There are no restrictions on foreigners purchasing real property in the Dominican Republic. Foreigners are allowed to purchase property in the Dominican Republic with the same rights and obligations as a Dominican citizen. Also you could apply for Dominican Residency with your property purchase value from US$200,000.

How much are Property Taxes?

• A 1% annual tax is assessed on real estate properties owned by individuals, (based on the cumulative value of all the properties they own) *as appraised by government authorities. Please note that the value of the property generally does not reflect a true market value assessment, but is generally lower. Most owner’s pay much less than actual market value. Properties are valued without taking into consideration any furniture or equipment to be found in them.

• The 1% is calculated only for values exceeding $6,858,885.00 DOP (about $150,000). For un-built lots, the 1% tax is calculated on the actual appraised value without the exemption.

• The real estate tax is payable every year on or before March 11, or in two equal installments: 50% on or before March 11, and the remaining 50%, on or before September 11.

• The amount of the exemption is adjusted annually for inflation.

• The following properties are exempt from paying real estate tax: (a) farm properties; (b) homes whose owner is 65 years old or older, and has no other property in his or her name; and (c) properties owned by companies, which pay a separate tax on their company assets.

Can you finance a house in the Dominican Republic?

You can get financing for the purchase in the Dominican Republic as a non-resident foreigner. Financing in general is possible only for clients from the USA and Canada. Also, it's good to note that the major banks here in the Dominican Republic have offices and/or connections in the USA and Canada, so it is easy to get client's information. Financing a lower amount is also possible.

What is the procedure to buy a house in the Dominican Republic?

1. A “Contract of Sale” or “Purchase Agreement” is made and signed by the parties of interest and the required deposit, usually 10%, is placed in the Escrow Account. This will reserve the property for you and in essence, take it off the market.

2. Some of our properties are exempt of Tax, otherwise you will need to pay a transfer tax. Currently, the tax is approximately 3% of the appraised value. This value is a government calculation and does not necessarily reflect the true value of your purchase (usually far less than the actual cost). And 1% Tax property twice a year.

3. Closings are normally within 30-60 days depending on the agreement between buyer and seller. All buyers’ funds should be in the Escrow account 3 days prior to closing. On the closing date, both buyer and seller will sign the appropriate documents or someone you appoint can act as your “Power of Attorney” to handle the closing for you.

What are the Legal & Professional Fees at Buying or Selling process in the Dominican Republic?

Your real estate lawyer will charge you a percentage of the purchase price of the property. Generally fees are 1 to 1.5% of the purchase price. This amount includes all disbursements, due diligence (see Buying Process), and will convey the title into your personal name or corporation, depending on which way you choose to buy. Real estate fees are paid by the seller or developer, not the purchasers. Please note that all payments and disbursements to the firm are subject to a 18% government value added tax.

What monthly costs are associated with owning?

General running costs like utilities, condo fees, etc. are standard like anywhere. Some fees are optional like housekeeping, etc. Below is a basic breakdown of costs for running a 2-bedroom villa (with all services). Condos are generally less each month.

Subdivision/Condo Fee $200- $350/month (includes cable, security, water, outside lighting, maintenance of common areas, garbage, onsite office)

Pool/Yard Service $250/month

Housekeeping:  $100-$300 month

Electricity: (average $100/bedroom per month if rental unit)

Propane: $20- $30/month depending on usage

Misc: (consumables and maintenance) $100/month estimate (if villa, less if condo)

How do I finance a house in Dominican Republic?

Place a new, US dollar first mortgage on the DR property being purchased.

1. Interest rates are between 3.75-5.75%

2. Amortizations up to 25 years.

3. 35-40% down payment required.

4. The approval process is similar to that of North America, with lenders requiring similar documentation.

5. You can be self-employed.

Can I get a loan in the US to buy a house in Dominican Republic?

Financing in general is possible only for clients from the USA and Canada. For European countries it's far more difficult. Also, it's good to note that the major banks here in the Dominican Republic have offices and/or connections in the USA and Canada, so it is easy to get client's information.

How does real estate work in Dominican Republic?

Real estate purchases in the Dominican Republic work a little differently than in the U.S. Instead of tendering a written offer, you first negotiate and reach a verbal agreement on the price with the seller. Then, a binding “Promise of Sale” or “Option to Purchase” is prepared by an attorney and signed by both parties.

Do I need a permit to purchase land in the Dominican Republic?

Before purchasing land in the Dominican Republic, it is highly recommended that you have your attorney confirm that the property may be used for the purposes you desire.

Restrictions may be applicable in specified zones. An example of such a restriction currently exists along the entire Dominican coastline known as the “maritime zone” in which all beaches are designated as public property. Building is prohibited within the maritime zone without a special permit. Also tourist zones have specific building restrictions.

How much do I need to retire in Dominican Republic?

The Dominican Republic is one of the least expensive places to live in Latin America, making it a very desirable place to retire. A monthly budget of $1,200 allows an American retiree to live comfortably in the Dominican Republic. *Monthly Budget may vary by your needs.

Would you like to live in the Dominican Republic or having your vacation home?

Are you looking for your dream home away from rutine, cold weather o investment in the Dominican Republic? Discover our unique paradise living experience.

At Punta Bay we make it yours with the best price of the Caribbean and best dominican real estate service. We exceed every expectation with exclusives deals, owner’s benefits and all effortless travel planning to come to see your property.

Would you like to live in the Dominican Republic or having your vacation home?

Are you looking for your dream home away from rutine, cold weather o investment in the Dominican Republic? Discover our unique paradise living experience.

At Punta Bay we make it yours with the best price of the Caribbean and best dominican real estate service. We exceed every expectation with exclusives deals, owner’s benefits and all effortless travel planning to come to see your property.