The worst mistake when investing in real estate for rent in Dominican Republic

Many investors want to buy real estate opportunities with an eye on renting apartments and getting month-to-month cash flow. In places like the Dominican Republic, it is a winning type of strategy if we are moving in the more touristic areas close to the beach, such as Punta Cana.

However, sometimes a mistake may be made in the mistake when investing in real estate for renting if a proper approach is not followed. From Vivantia Homes we want to clarify some of the mistakes of the beginner investor that you should avoid.

What mistakes are made when investing in rental properties?

There are several common investor mistakes that are going to invest in rental real estate.

1. Buy to rent for the long term

It may seem like a safe option, but sometimes it is the most conservative strategy, and much more could be earned through tourist rentals. On the other hand, properties that are rented to residents or locals are not always going to be as profitable as those rented to tourists from the United States or Europe, so the profitability of the property compared to the costs can be significantly reduced.

2. Buy cheap apartments in Dominican Republic

Focusing solely on the apartment prices in Dominican Republic is a common failure of the beginner, since we tend to think that the cheaper a property is, the more profitability it will give us in the end.

But that's not always the reality: there may be cheap apartments in Dominican Republic precisely because they are not intended for tourist rentals, but for locals who are looking for a permanent residence and have a lower purchasing power.

We believe that, if you are going to invest in housing, it is essential that you learn to identify profitable properties in Dominican Republic.

3. Investing in areas of the Dominican Republic that do not benefit from the Confotur Law.

Not all theapartments in tourist cities benefit from the advantages of the Confotur Law, The tax exemptions to the Real Estate Transfer Tax or the Real Estate Wealth Tax.

There are those who, in order to reduce costs, end up purchasing apartments in remote areas or areas far from the beach, In practice, this leads to a cost overrun: it is true that the purchase price of the property is cheaper, but the occupancy rate will be lower if it has difficult access or is far from the Punta Cana airport.

4. Not having the help of real estate consultants

Another common mistake is to try to minimize expenses by trying to negotiate directly with property owners, You can also count on the help of an operator who knows the Dominican Republic and can accompany you through the whole process.

At Vivantia Homes we want you to know at all times what you are doing, we provide you with complete and transparent information and accompany you throughout the whole process. process of acquiring your apartment in Dominican Republic.

What is the worst mistake when investing in real estate for rent in the Dominican Republic?

One of the most serious mistakes when going to the investing in real estate for rent is not taking into account the maintenance costs. We make the calculations thinking that the income is going to be profitable, but we do not have a real vision of the expenses that it is going to suppose, with which the property can take more time than expected to cover the investment.

You should be aware that there are maintenance costs, administration, insurance, platform commissions, etc. and vacant periods where there is no one to rent it, so you must consider all these aspects when calculating income and expenses.

We recommend that you learn how to calculate the RevPar of tourist homes to evaluate their profitability.

At Vivantia Homes we are transparent and we will show you the smartest and most effective way to make your properties can generate a high return, without you having to experience too many unforeseen expenses.

With us you will be able to acquire properties in tourist zones subject to the Confotur Law, You will be able to enjoy different tax exemptions. In addition, it is possible to acquire properties where the property is managed by a hotel brand, so you do not have to deal with marketing, nor spend money on the high commissions of a platform like AirBnB and similar, but maintaining a high occupancy rate.

Are you an investor and want more information? Start by booking a video call with us.

More doubts? We clarify them for you

Let's take a look at a few more questions that many investors ask themselves when it comes to buy real estate for rent.

Is investing in rental real estate profitable in the Dominican Republic?

Yes, although you should keep in mind that depends on the type of property you are investing in, The price of rent and the area in which it is located.

What types of rental properties are most profitable?

A property is already an investment in itself, which can be invested in by the buyer.ncrease in price over time. But if you want to earn a higher margin, you should choose to invest in luxury apartments in well-located areas, preferably units in a condominium.

What are the most important elements that an apartment must have in order to be rented?

Ideally, your apartment in Dominican Republic include a series of amenities (gym, private swimming pool, coworking area...) to make it attractive to tourists.