Keys to diversify your real estate portfolio

Keys to diversify your real estate portfolio

Have a diversified real estate portfolio can bring great stability to investors. When a person decides to purchase real estate in the Dominican Republic, he or she is often attracted by the excellent fiscal conditions and the country's great long-term economic prospects.

But simply acquiring a single unit or luxury home is not usually an investment strategy for those who want to achieve maximum financial freedom. Ideally, this should be the first stepping stone to building a real estate in Dominican Republic that allows you to earn a continuous income from rental income.

Discover here our real estate opportunities for investors who wish to maximize the profitability and stability of their portfolio.

What is real estate portfolio diversification?

The diversification of the real estate portfolio is a real estate investment strategy aimed at reducing risk.

When an investor dedicates a portion of his capital to real estate investments, he can obtain returns from these through different mechanisms.

For example, of the tourist rentalsor from refurbishment and revaluation and subsequent sale, or other means. But there are several factors that can influence this, such as competition, the level of tourism or the location of the properties, which can reduce your income.

Keys to diversify your real estate portfolio

If you are real estate investor and you want to grow your investment portfolio, here are some tips to keep in mind if you want to maximize its stability.

1. Better few luxury homes than cheap long-term rentals

 

Diversify your real estate portfolio is not about accumulating as much real estate as possible. There are homes that can be very sensitive to changes in the market, which can reduce your income.

Although investing in low-cost real estate may maximize your return at the outset, it entails a higher long-term risk. And you depend on long-term rentals, the profitability of which depends on the local economy.

On the other hand, the luxury homes in highly trafficked tourist locations as Punta Cana, have a higher occupancy rate. Simply because tourists with high purchasing power come from all over the Americas and Europe, less conditioned by the ups and downs of the economy.

Have a few luxury homes well located allows you to have more stability than many homes of medium or low quality, whose ability to convert is much lower in a tourist context such as the Dominican Republic. This type of housing is more intended for long term rentals, which can be more affected by changes in price.

It is not a matter of not investing in different price rangesThe main objective is to act with a strategy that takes into account the characteristics of the market.

 

2. Acquire units managed by hotel brands.

 

If all your investments are made in self-managed propertiesdiversification of your portfolio can become a problem.

The more properties you acquire, the more time, cost and effort you spend on maintenance. That's why one way to reduce risk is to have luxury units in your real estate portfolio in condohotels in Dominican Republic where you can cede the management of the property to third parties, which is much more scalable.

 

3. Don't rely only on long-term rentals

 

Long-term rentals are available, short-term vacation rentalsreal estate transactions that are solely oriented towards the valorization of the property and resale... Don't gamble by relying solely on one strategy.

Again, diversification is not about avoiding other investments. But it is about finding the right balance in your investment strategy.

 

4. Go to real estate markets with stable tourist income.

 

It is not the same to invest in housing in areas where the influx of tourists is too dependent on the season or the weather.

This is what often happens to many real estate investors in the United States or in less populated urban areas, where there is no stable demand throughout the year.

That means that if you are looking for profitability with tourist rentals, your income is drastically reduced in low season, while it increases in high season. But you can reduce this range if you go to real estate markets such as the Dominican Republicwith a stable climate and an economy that receives tourists throughout the year.

 

5. Commitment to geographic diversification

 

Maybe you are a real estate investor in Colombia and all your homes are located in this country. But what if circumstances occur that severely affect demand, and your rental prices are pushed down?

You need diversify into other real estate marketsEspecially those that offer a high stability in income from tourist rentals, as is the case of the Dominican Republic, and in particular cities of international renown such as Punta Cana.

Do not be afraid to making real estate investments abroad. In fact, you will discover that the tax advantages for investing in the Dominican Republic are surely much better than in your country of residence. And, in fact, they give you all kinds of facilities as a foreign investor, whether you want to live here or not.

At Vivantia Homes we can help you take your first steps as an investor in the Dominican Republic. Discover our real estate opportunities and contact us now to book a video call.

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What are condominium amenities?

What are condominium amenities and why are they important?

One of the elements that you should consider when making real estate investments are the facilities in which the property is located.  

There is luxury units located in condominiums that, regardless of their size and characteristics, have an added value due to the location of the building in which they are located and the amenities of the condominium.  

In this post we will show you what are the amenities or amenities that you can find when investing in properties such as those of Oasis Bay u Oasis Lake. 

What are the amenities of a condominium?

The amenities, amenities or comforts of a condominium are recreational, social or sports areas that are intended to make the stay in the property more pleasant. 

What tourists who visit the Caribbean for a few days or weeks really value is not simply the fact that they live in a luxury home in Dominican Republicbut to be able to enjoy a series of experiences that make your stay perfect. 

The fact that these amenities are located on the same premises or in the same area is not a factor in near the condominium means that they do not have to travel to enjoy them, which helps people to have a better experience. 

As a real estate investor, you should keep in mind that the tourists who will rent your property value highly the amenitiesThey have come to the Dominican Republic to have a good time. And this is a factor that will also significantly influence the price per night, which will help you maximize profitability. 

Types of amenities you can find in Punta Cana condominiums

Let's take a look at a series of amenities that can be a differential factor when it comes to finding people to buy your investment property. 

 Swimming pool 

 Swimming pools can be private or public (for the entire condominium), and it is one of the essential amenities that will allow you to find clients when renting your property. With the competition you have in Punta Cana, and being fundamentally a place to enjoy the sun and water, there are many tourists who would never stay in a place that does not have a luxury pool.  

Private beach 

Private or semi-private beaches are located in gated resorts. They are usually an additional advantage highly valued by tourists, since they allow them to avoid the crowds, apart from allowing you to go to the beach as soon as you get up in the morning, and without having to move around. 

Coworking 

If you want to attract digital nomads, which is undoubtedly a very lucrative market segment in tourist rentals, the ideal is that your property is located in a condominium that has coworking space.  

This will allow your tenants to take their laptop and work during the hours they need it, while enjoying the rest of the amenities of their accommodation. 

Gym 

 Those who come to visit Punta Cana tend to be in many cases young people, well located, and yes, with a sporty profile, or fitness lover. Because what you must have clear is that Punta Cana is a place to enjoy the highest quality of life.  

 That's why every self-respecting luxury condominium has to have a good gym facility where people can keep fit. 

Parks and green areas 

 Green areas in a condominium are synonymous with aesthetics and beauty. The more green spaces, the more cheerful and attractive a place is. But it is also a way for families traveling with children to enjoy a space in which to play, run and have fun. 

 In this sense, tourists value very positively that the condominium in which they are located includes parks and activities of all kinds for children. 

Water activities 

This is an addition that not all luxury condominiums have, and it is the possibility of practicing water activities in a nearby water park, as is the case of Caribbean Lake Park, on the shores of whose lakes the apartments are located. Oasis Lakein the heart of Down Town. 

Places where you can practice all kinds of activities, from jet skiing and aquakart to private circuit adventures with buggies. 

Gastrobar 

When people travel to Punta Cana, they want the full experience. And that includes eating and drinking big and classy. They look for places where they can enjoy upscale international cuisine, combined with delicious local flavors, cocktails and drinks, as well as stylish spaces to enjoy lunch or brunch. 

Invest in luxury apartments in Punta Cana with the best amenities

When investing in real estate in the Dominican Republic it is very important that you choose luxury apartmentsthat offer the best comforts and advantages. 

 If you are looking for luxury homes in Punta Cana to invest and rent, in Vivantia Homes we can advise you on everything you need and inform you of new opportunities, with important tax advantages by the Confotur Law. Book a video call with us now. 

 

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How much is a luxury home in the Dominican Republic worth?

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How much is a luxury home in the Dominican Republic worth?

You may be wondering about the prices of a luxury home in Dominican Republic. 

You are real estate investor and you would like to have highly profitable assets, targeting a high-end tenant type, which would allow you to maximize the profitability per night. 

 In your case, it is important for you to be clear that the price of luxury mansions in Dominican Republic can vary greatly depending on the location. In fact, if you want to maximize your profitability, it is more important that the house is located in one of the most luxurious areas of the Dominican Republic, such as Cap Cana, than the fact that it is a very large house or with many square meters. 

How much does a luxury home in the Dominican Republic cost?

If you take a look at the prices of the mansions in Dominican RepublicYou will see that prices can be very variable. 

There are luxury villas with four bedrooms that can cost you around $1.500.000 USD, to others luxury homes in Cap Cana with many more square feet and more than ten bedrooms, which can be around US$6 or 7 million. 

Everything in the end depends on a sum of factors: the size of the house, the amenities, the location and even architectural design. 

The fact that there are numerous luxury villas in Punta Cana for a high value does not mean that all of them can bring you the same level of profitability. There are those who opt for long-term rentals, but this does not always allow you to take advantage of the potential for tourism growth, and it is not always easy to find a long-term tenant. 

Is it better to buy luxury homes in Santo Domingo or Punta Cana?

The location is a very important element in determining the price of a luxury home in Dominican Republic.  

In the end, it's not just about the city in which you're buying the home, but the area in which the luxury home is located. 

In this respect, it is much more cost-effective for us to buy luxury homes in Punta CanaIt is a much more touristic area and the main gateway to the country from the United States, Europe and Latin America. 

Previously we told you about the advantages of buying a house in Punta Cana vs. luxury properties. 

The most luxurious villa is not always the most profitable for the real estate investor.

As mentioned above, it is not always the most expensive mansion or villa in the Dominican Republic is necessarily the most profitable for the real estate investor.  

You must take into account the characteristics of the market, and think about the relationship between the investment and the return you are going to obtain in the short term.

Some prioritize having a positive real estate cash flow from day one, opting for the purchase of luxury condominium unitsThis allows you to access more economical prices than if you were buying a villa for long term rental. 

 By having greater accessibility to the market, you could invest in more units and obtain greater liquidity in the short term. You would not even have to deal with the property managementYou have the option of buying a luxury unit managed by a hotel brand, which would maximize bookings and allow you to earn a higher return per night. 

 The administration of a unit in a luxury condominium can also be much simpler than that of a large luxury home, which would reduce your profits, especially in a long-term rental. 

Discover the cost of your luxury home in Dominican Republic

The cost of a luxury home in the Dominican Republic is an important factor in making an investment decision. 

 But it's not the only key element you need to take into account, so applying for the help from a real estate consultant who knows the terrain can be key for you to know the different possibilities you have, especially if you don't know in depth what the possibilities are. best areas in Punta Cana to live and invest. 

At Vivantia Homes we can inform you free of charge of our investment opportunities in Punta Cana, with yields exceeding 10% per year in luxury properties that you can scale up for build your own real estate empire in the Dominican Republic. 

Are you a real estate investor with plans for the future? Contact us now and request a video call now. 

5. Unbeatable climate and natural environment

If your thing is investments in tourist properties, you must be clear that the climate and the environment of a place is key for people to want to stay there.

The good thing about places like Punta Cana is that it stands out because of its white sandy beaches and its pleasant temperature throughout the year, which helps to lengthen the tourist season. This place has an average temperature of 27.4º C, which is undoubtedly a great attraction for many tourists to come looking for good weather.

From Vivantia we invite you to know our offer of properties for sale in Punta Cana. Are you an investor and would like to buy properties in Punta Cana? Book your video call with us.

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Why invest in real estate in the Dominican Republic?

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Why invest in real estate in the Dominican Republic?

Real estate is one of the most attractive investments for the future in a country that depends mainly on tourism. Its strategic position in the Caribbean and internationally, together with the excellent conditions for investors, make real estate one of the most attractive future investments in a country that depends mainly on tourism. real estate investment in the Dominican Republic is one of the best decisions for those who wish to prosper in this market.

It is not without reason that many investors request the investor visa to start doing real estate business in the Caribbean paradise. If you would like to know the main reasons to invest in real estate, read on to learn all the details about this type of investment.

What is real estate investment?

Technically, there is no difference between investing in real estate or investing in real estate, except perhaps that the latter concept more clearly captures the nuance that you are not only buying a property or a unit built in a building, but you are also acquiring rights to a common part of the land on which the property is located.

That is to say, when you invest in real estate, you have the possibility of buy land, with everything attached to it, or without any construction at all, and build your own single-family home or building, or buy a unit in a building already built or under construction.

Buying land in the Dominican Republic, or an apartment already built?

Buying a unit in a building already built in the Dominican Republic entails important advantages, especially if this tourism project is already covered by the Confotur Law.

On the other hand, if you acquire land in the Dominican Republic, even if it is located in a tourist area, you would have to develop a project and apply for approval, which can delay the processes.

What are the advantages of investing in real estate in the Dominican Republic?

1. Growing market

The real estate market in the Dominican Republic will not always be the same. Prices will rise over time, there will be more housing shortages than now, the economy will probably continue to rise...

It is not the same to invest in real estate now than in 2040, so taking advantage of the trend of a growing market, which is also a reference for tourism in the Caribbean and internationally for its excellent conditions, makes you a pioneer investor, who knows how to seize opportunities at the right time.

2. High return on investment

Why buy an expensive property in Miami, when you can get a better one close to the beach in a place like Punta Cana? When it comes to investing in real estate, we should look at the return on investment or "ROI" of the property. profitability of real estate and not only in the price per square meter, or the total value of the property.

Considering also that the Dominican Republic is part of an island, and its space is much more limited, and considering also that its currency is much less strong than the dollar, there are many more possibilities to obtain a high real estate ROI, if you later decide to sell, or opt for vacation rentals.

 

Legal certainty and political stability

When you are looking for alternative real estate markets, don't be fooled by extremely cheap prices. Because there are countries where there are incredible opportunities, but bureaucracy and taxes can play a trick on you.

The legal security and political stability of the Dominican Republic is far superior to that of other countries in the area, and perfectly comparable to investing in any first world country. This provides transparency and confidence to real estate investors, who logically want the process to be clear and with total legal guarantees.

4. Low taxes

Buying a house with the intention of living in it is not the same as making an investment in real estate. Those who are looking for real estate opportunities, usually want to buy to rent, or resell after renovation or revaluation.

To achieve this objective, the ideal is not to have to wait too long, so buying land and building or to develop a tourism project can be enormously time-consuming, but it can also be a very attractive investment.

However, for a small or medium-sized investor who simply wishes to invest in apartments for rent, they can benefit from low taxes or even be exempt from some of them if your real estate investment is made in a project that is covered by the Confotur Law.

We are talking about having an exemption of Real Estate Transfer Tax (3%), exemption from property tax for 15 years, as well as exemption from income tax (ISR) for 15 years.

Would you like to know the conditions for doing real estate business in the Dominican Republic? Are you looking for opportunities to invest in real estate in Punta Cana? Talk to us now.

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Buying a house in Santo Domingo vs. Punta Cana

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Buying a house in Santo Domingo vs. Punta Cana

When you consider invest in Dominican Republic or you want to buy a vacation home to enjoy a season in a Caribbean paradise, location is undoubtedly one of the most important factors. Many people only consider, however, two options: buying a home in Santo Domingo vs. Punta Cana.

Which is the best city in the Dominican Republic to make real estate investments? Why buy a house in Punta Cana or Santo Domingo? In this post we are going to show you some aspects that you may not know, but that can be very helpful if you want to make investments in the Dominican Republic.

Buying a house in Punta Cana vs. Santo Domingo

There are several reasons why it is much better to invest in real estate in Punta Cana than in Santo Domingo, but we will mainly focus on three: tourism, security and quality of life.

Punta Cana is the main gateway to the DR and the Caribbean.

 

Although Santo Domingo is the capital of the Dominican Republic, in practice Punta Cana is the gateway to the country.

Because Punta Cana International Airport (PUJ) is the country's main airport, and one of the gateways to the Caribbean for those coming from North America, Europe and Latin America.

With more than 61,000 air operations per year and a passenger traffic of almost 10 million people, it is the first place that tourists visiting the Dominican Republic go to, since Punta Cana is a city designed for tourism.

As a real estate investor, it is logical that you are interested in investing where there are more possibilities to rent your property at an attractive price, since there are many people who come to enjoy the city, or who stop there because they are passing through on their way to other destinations.

A luxury environment, with resorts and hotels at the highest level.

If what you are looking for is a luxury environment, with beautiful resorts, golf courses like Cocotal Golf & Country Club and a variety of restaurants and high-end hotels, it is certainly much better to buy a home in Punta Cana.

Punta Cana is a luxurious city, but also for people who want to live well and enjoy quality of life.

As an investor, you may have wondered at some point in which area of Punta Cana millionaires live. Because you would like to have a property as close as possible, which allows you to charge high rents. The truth is that in the whole area of La Romana, and especially in Cap Cana and Cocotal Golf & Country Club and Bávaro, you will be able to find high-level apartments and villas to rent at more than excellent prices.

Santo Domingo, a more urban and working city

Santo Domingo is an urban, commercial and residential city, which makes it primarily an economic center. Punta Cana, on the other hand, stands out for its quality of life, a calmer atmosphere and a more leisure and pleasure-oriented environment.

Although it also has its tourist appeal, buying a home in Santo Domingo is more geared towards those who wish to pursue a long-term rental strategy. It is in Punta Cana where it is easier to obtain high rents per night for short periods, which increases long-term profitability.

Which is safer to live in, Punta Cana or Santo Domingo?

Another reason why it is worth buying a house in Punta Cana vs. Santo Domingo is security. Both cities are very safe, although it is true that the different areas of Punta Cana are much more homogeneous, and having much less population and a higher standard of living, security is excellent.

Although both cities are extensively developed, Punta Cana stands out for its luxury developments, with 24/7 security, as well as multiple resorts, so it offers a much more pampered environment.

On the other hand, Santo Domingo is a capital of more than 2,800,000 inhabitants, so it is much more heterogeneous, and although you will find luxury apartments and villas, there are also more areas with less control.

All in all, you should be aware that the Dominican Republic is very safe compared to surrounding countries, and in recent years crime rates have decreased significantly.

Which is more expensive, Santo Domingo or Punta Cana?

Clearly Punta Cana has a much higher average sales price, around $2000-2200 USD per square meter, compared to the $1,650-1700 that can be found in Santo Domingo.

Keep in mind that everything will ultimately depend on the area where you are. It is not the same to do Real Estate in Cap Cana or in the area of Playa Bávaro, than in other more peripheral areas, such as Verón or Uvero Alto.

However, we recommend that you do not focus solely on price, since as investors we must think in terms of profitability.

If investing more in the purchase of a luxury apartment will allow you to charge higher rents, or the property will appreciate much more in value in the future, with a luxury apartment you can reduce the risks. In a place like Punta Cana, a meeting point for many travelers with high purchasing power, you will have no problem renting your home, and revaluing it with yields that exceed 10% net annual return in many cases.

In short, we recommend that you clearly bet on investing or living in Punta Cana. Having said all this, whether you want to buy a house to live in the Dominican Republic or you are a real estate investor, we invite you to ask for our help to buy your home.

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What are the internal taxes paid in the Dominican Republic?

What are the internal taxes paid in the Dominican Republic?

If you are thinking of living in one of the most beautiful places in the Caribbean, the first thing to do is to be well informed about taxes. What are the internal taxes to be paid in the Dominican Republic?

Whether you are a real estate investor and want to make your way in the world of Real Estate in the Dominican Republic, or you simply want to buy a property and move to live in Punta Cana to enjoy its quality of life and its beaches, in this post we will show you what you know about this matter.

What are the internal taxes in the Dominican Republic?

Internal taxes in the Dominican Republic are those taxes corresponding to the Dominican tax system. These taxes are collected by the Dirección General de Impuestos Internos (DGII).

Those who invest in this country and come from abroad must pay taxes on the real estate operations they carry out. However, thanks to the Confotur Law, you can access great tax advantages as an investor.

To invest in real estate in the Dominican Republic you don't need to live here, but it can be a good option if you would like to settle in this beautiful Caribbean country.

Here are the most important taxes you should know if you are going to live in the Dominican Republic.

Income Taxes (ISR)

Income Tax (ISR) is the tax levied on individuals. It is a progressive tax, which is levied on individuals according to their income level, in accordance with certain brackets corresponding to the current year.

Foreigners who are not residents in the country are only subject to ISR when the income has been obtained within the Dominican Republic.

On the other hand, if they are tax residents in the country and have income from the Dominican Republic itself, this income would be subject to ISR.

It should be noted that even if the income is earned outside the country, some types of income may be taxed. In the case of annuitants, however, they would be exempt from taxation on income from foreign sources.

In addition, income derived from investments in tourism projects that benefit from the Confotur Law will be exempt from the payment of this tax for a period of 15 years.

Asset Tax

Asset Tax in the Dominican Republic is paid on property, such as homes or vehicles.

This tax is only paid when the aggregate of the properties represents 1% per year. Once again, it is worth remembering that those who have invested in tourism projects subject to the Confotur Law will also be exempt from this tax for 15 years.

3. ITBIS (Tax on the Transfer of Industrialized Goods and Services)

ITBIS is a tax similar to VAT that is levied on value added. The acronym ITBIS stands for Tax on the Transfer of Industrialized Goods and Services.

The general rate is currently 18%, while certain products are exempt from this tax.

It should be noted that homes in the Dominican Republic are not subject to ITBIS, although the buyer of a property will have to pay the Real Estate Transfer Tax to register the home, which represents a 3% of the value of the property, although again if the project is subject to Confotur, it would be exempt.

 

4. ISC (Selective Consumption Tax)

This is a consumption tax levied on certain goods, such as alcohol, tobacco and fuel, telecommunications and insurance services, as well as the issuance of checks and electronic transfers.

The rates are as follows:

● Alcoholic beverages: 10%

● Tobacco: 20%

● Telecommunication services: 10%

● Insurance: 16%

● Issuance of checks and wire transfers: 0.0015 on the value of each check paid or wire transfer.

If you are going to reside in the Dominican Republic and buy these products or services, you will be paying taxes, although if you receive income from abroad in US dollars or any other hard currency, the cost is not at all high.

Do I have to pay taxes if I want to reside in the Dominican Republic? Some exemptions

There are different exemptions that can benefit you if you want to establish your tax residence in the Dominican Republic.

For example, if you are a rentista above a certain threshold, you are not required to pay ISR or income tax. Find out what you have to do to obtain a rentista visa in Dominican Republic.

On the other hand, pensioners or retirees can also obtain the ISR exemption if they receive a monthly pension of $1500 USD, as explained above.

Foreign investors would only have to pay taxes on Dominican source income, while income generated abroad would be exempt from income tax if you decide to establish your residence in the Dominican Republic.

Would you like to learn about real estate investment projects that benefit from the Confotur Law and buy your apartment in Dominican Republic? Write to us.

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Investing in apartments for rent, what are the advantages? 

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Investing in apartments for rent, what are the advantages?

There are different investment strategies depending on the purpose of the real estate purchase. 

One of the possible strategies is investing in apartments for rentThis means that you want to turn your homes into a real estate asset that generates recurring income and profitability. 

There are many ways to carry out this type of real estate investments in Dominican Republic. We are going to show you the different options you can choose from and the benefits they offer. investing in apartments for rent. 

Ways to invest in apartments for rent

There are different Real Estate strategies that have as their main objective rent the properties to third parties. 

These are some of the most important ones. 

Buy apartments for tourist rental 

Consists of buy an apartment to rent it to tourists visiting the Dominican Republic and wishing to book a stay in your rental house. 

 Generally, this type of acquisition has some advantages that make it very attractive to the investor: 

  • They are apartments focused on tourismThey therefore target a type of end customer with high purchasing power. They are willing to pay more per night. 
  • Tourist rentals can less trouble in the long runThe people come, enjoy their stay in your apartment and leave, leaving you with a high profitability.  

In order to qualify for this type of tourist rentals, investors look not so much at the space of the apartment itself, but at the facilities and location in which it is located. It is much better to invest in a condominium in Punta Cana with a private beach, gym, swimming pool, coworking area and close to the most fashionable golf course than in a house located away from the tourist areas. 

Investing in apartments for long-term rentals

Investment in apartments for long-term rental consists of acquiring homes with the objective of renting them for long terms, from 6 months to 1 year, with a view to keeping tenants for as long as possible.  

  • This type of investment is oriented to the rental of apartments to local peoplewhether they are nationals of the Dominican Republic or foreigners living and working in the country. 
  • The profitability is usually much lower, since the priority is to allow the person to stay as long as possible and prices tend to be lower. 
  • Most of the local people have a lower average wage than most U.S. tourists or other neighboring countries, so profitability tends to be lower and there is no guarantee that the tenant will renew the contract. 

Those who opt for this type of real estate investments in Dominican Republic tend to look for low-priced apartments or houses that can be renovated and generate higher profitability, or that are close to business areas, with a view to renting to people with high purchasing power. 

The biggest problem with this investment strategy is that, in a tourism-oriented market such as the Dominican Republic, it involves blocking an asset with a long-term leaseAlthough it offers you stability, it cannot benefit from market price increases during the tourist season. 

Benefits of buying apartments for rent in Dominican Republic

Acquiring an apartment for renting involves large amounts of money. advantages for investors for various reasons.  

You get liquidity from the very first moment 

When you buy an apartment, it is all about expenses at first. Unless you want to use it to live in it, the best option is usually to rent it to obtain an income that will allow you to cover the monthly mortgage or the administrative costs of the acquisition.  

Even if you are thinking of waiting for it to appreciate in value to sell it, in the first years it is always best to rent it to cover part of the cost you have incurred. Pay close attention to the occupancy rate of your tourist apartmentIt is essential to maximize your liquidity. 

You have a buoyant rental market 

The Dominican Republic is attracting more and more digital nomads, tourists, investors and professionals who are looking for the best quality of life.  

In such an environment, the apartment rentals is always in fashion, as they are people who tend to move around a lot and are not going to stay too long on the island, or in some cases, they are going to look for other tourist destinations.  

In this sense, taking advantage of this continuous tourist movement is a great opportunity for those who choose to buy apartments for short-term tourist rental. 

 Lower acquisition costs 

The relationship between housing costs and the price of apartment rentals in the Dominican Republic is beneficial for the real estate investor. In this sense, if a foreign investor with high purchasing power comes, he will obtain many more advantages when buying an apartment in the Dominican Republic than in the United States, where prices are higher. 

Ideally, you should obtain financing that will allow you to obtain a cash flow positive, but even if this is not possible, you can still profit from the long-term appreciation of the property. 

 

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How to obtain a property title in Dominican Republic? 

How to obtain a property title in Dominican Republic?

Obtaining the title of property in Dominican Republic is a fundamental aspect that, as a good real estate investorYou should bear in mind when carrying out any operation.  

Of course, when buying an apartment or home, you need to to obtain title to real estate, so that you can have an official certification that the property belongs to you. 

A homeowner's title deed in the Dominican Republic provides legal certainty, so any real estate investment requires obtaining this type of document to avoid legal conflicts, although the time to obtain it may vary if you buy the property directly from the promoter (developer), or if the property already has an individualized title. 

In this post we will explain what does the title to a house or property consist of? and the steps you must take to achieve it.

What is the title of a real estate property in the Dominican Republic?

The title or ownership role is an official document, which certifies the ownership of a real estate property.  

In this document, which must have a watermark to be considered legal, a series of foodstuffs are specified to certify its veracity. These are. 

  • Issuing title registry office 
  • Cadastral designation 
  • Name of the owner, whether natural or legal person 
  • Identification of the property 
  • Square meters (unit of measurement used in Dominican Republic) 
  • Registration  
  • Municipality 
  • Province 
  • Date and time of registration 

Steps to obtain the title deed of your apartment

Generally, when we are going to make a real estate investment in the Dominican Republic, what we are carrying out is a purchase of a property which is already registered with its title deed in the seller's name. 

  1. Signing of the purchase and sale contract

The first step (after the initial reservation and deposit payment) is to sign the contract for the purchase and sale of the propertywhich must be signed by both parties. In addition, the contract must be accompanied by the identity cards of both parties. 

  1. Payment of the property

At this stage, the payment of the property. This is a process that must be documented and where the buyer must obtain a receipt for the amount paid. Previously we have already told you about how much does an apartment cost in Dominican Republic. 

  1. Notarization

The process of signing the purchase-sale contract is made before a notary, who certifies that both parties have signed the contract and authenticates it legally. 

  1. Registration of the sale at the General Directorate of Registration of Titles

 Next, the following has to be carried out registration of the sale at the Dirección General de Registro de Títulos de Propiedad (General Directorate for the Registration of Property Titles)which must be notarized. The Dirección General de Registro de Títulos will perform an exhaustive legal review of the contract to verify that there are no legal conflicts or encumbrances.   

This institution will validate the transaction and, if everything is correct, it will issue the certificate of title in the name of the buyer. 

  1. Registration in the Real Estate Jurisdiction

Finally, once the property has been paid for, the following will be done register it in the Real Estate Jurisdiction.who issues the title deed to the property. 

Costs to register a property in Dominican Republic

If you are going to invest in the purchase of a property in the Dominican Republic, you should be aware that as in any real estate investment, there are usually associated administrative costs. 

  • You must pay the Real Estate Transfer Tax, which is equal to 3% of the appraised value of the property. This is paid only once, and within six months after the purchase. However, if the property benefits from Law 158-01 for the Promotion of Tourism Development (Confotur Law), you will be exempt. 
  • Notary fees: the processing of the title deed involves paying the fees of the notary, who will be responsible for ensuring that the legal transfer of the property takes place legally. These usually amount to around 1% of the value of the property. 
  • Administrative fees and appraisal expenses. These are the expenses derived from the registration of the property, and depend on the type of property and its value.  

 In addition to these initial costs for the purchase of the property, you should take into account the annual IPI payment (Real Estate Wealth Tax), which is equivalent to 1% of the value of the property, but from which you would be exempt for 15 years if the property benefits from the Confotur Law.

 

What to do if the property does not have a title deed?

In some cases, when we are going to perform the purchase of a property in Dominican RepublicIn some cases, there may be situations in which the title to the property has not yet been taken out, or the owner has the title to the property, but the demarcation has not yet taken place. 

This can occur in two situations: 

  • Persons who have been residing on a plot of land or dwelling for yearsThe property has never been titled, so it is not legalized. This is something that occurs in cases of single-family homes. If you are going to invest in this type of real estate, it is very important to certify that the seller has the property title before carrying out any operation, since it could imply legal risks. 
  • Developers (promoters) who sell a property in a condominium or parcel, but who have not carried out the deslinde, that is, the legal and technical process by which a larger property is divided or individualized. In these cases, the developer holds title to the property during the construction phase, and once the condominium units are sold, each buyer can register their individual property.  

From Vivantia Homes we are at your disposal to answer any questions you may have about the purchase process of our real estate offer. Consult with us now the characteristics and conditions for buy your apartment in Dominican Republic.

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What is the down payment for an apartment in the Dominican Republic?

What is the down payment to buy an apartment in the Dominican Republic?

Planning the financing of your apartment is one of the aspects that you should take into account to avoid financial problems in the future. One of the questions that many real estate investors usually ask themselves is what is the down payment for an apartment in the Dominican Republic, or the first payment that must be made, in order to know in advance how much you should have saved to invest in your home.

The situations can be diverse, depending on where you are going to buy your home in the Dominican Republic. A rural accommodation is not the same as a luxury apartment with private beach, swimming pool, gym and direct access to one of the best golf courses in Punta Cana.

The important thing, in any case, is that you are clear about everything you need to know about the down payment when it comes to the cost of an apartment.

Ways to buy an apartment in Dominican Republic

Before answering the question of what is the down payment for an apartment for sale in the Dominican Republic, you should be clear on this point.

There are two ways to buy apartments in the Dominican Republic and in many other destinations ideal for real estate investors.

● Buying apartment directly from the developer: in this case, you are buying a unit in an apartment in a project that is under construction. This is what is sometimes also known as investing in plans. It does not mean that the apartment is not ready to live in, but rather that the building is not yet fully completed. Generally, payments can be more flexible than when it comes to an apartment that is already built and where the owner already has his or her title deed.

Buying an apartment from the owner: these are homes or units in apartments that have already been built and where the demarcation has already been done, so the owner has the title deed and he sets the conditions to sell it. In the latter case, it is normal that the owner demands full payment of the apartment and not in installments, so you must pay in cash or apply for a mortgage loan, except in very rare cases, where the owner accepts payment in installments.

What is the down payment for an apartment in the Dominican Republic?

Seen from this perspective, you can now see more clearly that the down payment is usually not the same when buying an apartment from the developer as it is when buying from an owner.

Down payment when buying from a private homeowner with a mortgage loan

If you are going to buy an apartment from a private owner or company, they will generally ask you to pay in cash. Therefore, if you want to pay a down payment, and pay the rest of the apartment in monthly installments, you would have to apply for a mortgage loan.

Mortgage loans in the Dominican Republic usually lend around 80% of the price of the property, so the down payment you would have to assume directly would be 20% of the property in case of buying the property directly from the owner. Obtaining the mortgage loan allows you to acquire the property at the time of purchase, but you become indebted to the bank (which can be fixed or variable) and pay interest.

It is very important that, if you are going to buy to rent, you take into account the type of cash flow in your real estate investment and try to achieve optimal conditions.

Down payment when purchasing an apartment from the developer

Now, what happens if you are buying a unit in a property owned by the developer? The developer usually sells with greater flexibility, in order to have more liquidity to complete the construction project. Generally, the payment is divided into four parts:

● Reservation fee: it allows you to reserve the luxury apartment or house, so that it is no longer shown to anyone else and you can make up your mind. This amount ranges from $2000 to $5000.

● Promise of sale: in these cases, you have to pay 20% of the property at the time of signing the contract, which is done within a maximum of 30 days after booking.

● During construction: a 40% is paid on the property, which can be divided into monthly installments, without having to take out a mortgage from the bank.

● Upon delivery: once construction is completed, you would have to pay the other 40% on the home.

There are cases in which you can find properties in which you can select the amount you want to pay as down payment and thus access discounts on the down payment for early payment, as is the case of the project Oasis Bay Boutique.

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Importance of cash flow in real estate investments

Cana Bay

Importance of cash flow in real estate investments

One of the elements that you must take into account when making a real estate investment in the Dominican Republic is cash flow.

The investment cash flow is an essential aspect that allows you to assess whether you are making a good financial decision. The fact that it is negative does not necessarily mean that it cannot be a good investment if you sell the property in the future, but you should consider all the variables before making the purchase of an apartment.

If you are thinking of applying for a mortgage to buy an apartment in the Dominican Republic, consider what we are going to tell you below.

What is cash flow in real estate investment?

Cash flow as applied to real estate transactions is the relationship between the income coming in or the expenses going out on an investment, such as the purchase of an apartment.

For example, if you apply for a mortgage to buy an apartment in Punta Cana, and the cost of the mortgage is $$600 per month and you were able to rent the apartment for $$800, you would have a positive cash flow.

On the other hand, if the cost of the mortgage were higher than the price of the rent, we would be talking about a negative cash flow, so every month you would lose liquidity. This does not necessarily mean that you are losing money, since you now own an apartment, and that is an asset that you can sell to maximize your profits.

What to consider when calculating cash flow when buying an apartment in the Dominican Republic?

When buying an apartment in the Dominican Republic and renting it out to earn income from it, you must take into account some elements that add to the cost of your mortgage when calculating your cash flow.

The commissions of the apartment rental platform you are using. Keep in mind that these tend to be higher than when you use the service of a hotel brand.

● Maintenance and property management costs. The unit you have purchased in the condominium has common expenses. For example, if the facilities have a swimming pool, gym or coworking room, this increases the monthly costs, although when renting the apartment for long periods, you can pass the costs on to the guests.

● Taxes: the taxes involved in owning an apartment also represent an outflow of money, so you must account for them. That is why it is very important that when you buy an apartment in the Dominican Republic you can evaluate the possibilities of reducing the tax expenditure, for example by choosing an apartment that takes advantage of the benefits of the Confotur Law.

Many investors do not take these costs into account when assessing cash flow. The consequence? They may not achieve optimal terms for financing the property and find that they end up with a negative balance every month.

This may at first sight be a setback, but you should bear in mind that, with the appreciation of the property, if you sell it in the future you will most likely be able to recover what you have been losing due to the negative cash flow and even make a profit. However, the risk is greater than if you had achieved a positive cash flow.

Investing in apartments in the Dominican Republic and maximizing profitability

It is always desirable to be able to obtain a positive cash flow from the beginning, or at least a balance between income and expenses, although we know that this is not always possible in all real estate operations.

However, a positive or neutral cash flow allows you to acquire an asset with minimal expenses, or even with monthly profits, which reduces the risk of the real estate transaction.

Now, in a booming real estate market and with high tourism growth in the Dominican Republic, sometimes a negative cash flow does not have to be a bad investment. By the time you have finished paying the mortgage, on the other hand, you can move to a positive cash flow.

Even more important than the rental price and maintenance costs is the occupancy rate of the property. Because someone may think that he will have a positive cash flow with short term rentals, but due to the high competition in tourist rental applications, he may not achieve the desired occupancy rate to achieve a positive cash flow.

In other words: tourist rental platforms can reduce the expected cash flow and complicate your expectations.

In this sense, from Vivantia Homes we advise you to reduce risks and take care of your cash flow. In addition to looking for good financing options, it is best to opt for properties in which the property management is linked to a hotel brand, which allows you to increase the occupancy rate, reduce expenses in commissions and delegate the management. This ultimately influences long-term profitability, even if you decide not to sell the property in the future.

If you want to find the best real estate opportunities in Dominican Republic, talk to us now.

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