less than 16% of the tourist population coming from the US, The Dominican
Republic remains an undiscovered paradise. If you ask most Americans
about the Dominican Republic, many cannot locate it on the map. For
those that have discovered it while on vacation, many have decided to call
it home. Well, there’s nothing wrong with falling in love. This is
especially true when one has a love of crystal clear water, sugary white
sand beaches, and the beautiful mountain scenery unique to the Dominican
Republic. In addition, when adding the costs of property to our discussion,
the Dominican Republic is still one of the best real estate bargains left
in the Caribbean – if you know where to look.
Not only is the Dominican Republic situated
on the largest island in the Caribbean, it is also offers some of the most
diverse topography. From the snow capped mountain region in Constanza
to the sun drenched beaches of Samana or Barahona, the Dominican Republic
offers something for everyone. Whether you want the beach lifestyle
or the cosmopolitan feel of historical Santo Domingo, you truly can have
the best of everything. But before you put your lovely three-bedroom colonial
in New England on the market, let’s talk about some realities and expectations.
Fact and The Fiction
One problem we all have is that we are human.
That is to say, we sometimes think with our hearts and not our head.
A little of that is good now and then, but not when it comes to real estate.
There are wonderful experiences to be found when one lives in a place like
the Dominican Republic, but there are some drawbacks as well. In
addition, anytime we move to a place where the culture and the language
is different, we need to learn the ropes and understand that living in
a Spanish speaking island nation is not the same as living in Topeka, Kansas.
According to The Dominican Republic Report,
this country does offer one of the best places in the entire Caribbean
to live, work, retire, or invest. It has one of the strongest economies
among all other Latin American countries. However, it is different.
That difference is what makes it wonderful and provides for the incredible
investment opportunities, but also offers some the need for understanding
if you are not accustomed to another culture.
there be Light
There is an electricity problem in the Dominican
Republic. That is to say that there is electricity, just not enough
of it. All your appliances from the US that run on 110 or 220 will work
fine. In some places, however, the power can go out every day for
up 7 hours a day. Not always enjoyable when you are in the middle
of Monday night football (yes there is CNN, HBO, CINEMAX, and a whole slew
of other programming in English). In addition, since many water systems
rely on electricity to pump water into the house from the main water system,
you may find yourself unable to shower at 6:00 AM in the morning.
Before you take this as a negative, it’s not
as bad as it sounds. The fact is that the government has been actively
working on upgrading the generation systems and has recently purchased
additional power systems for the country. In addition, privatization
of the electric company should speed things up (The government owned electric
company has already been transferred to private ownership). But it is something
you want to be aware of when looking at apartments or other real estate.
A booming business in the last few years has been the sale of battery inversion
and household generator systems. Chances are that you will want to have
reliable electrical service on demand. This being the case, you must
factor in the cost of a battery inverter, which is an automatic backup
system that kicks in once a power loss is detected, or a gasoline powered
generator when looking at either the rental or purchase of a home.
These systems generally cost in the area of $ 2,000 or less, but are an
additional expense to be calculated. If you are looking for apartment
rentals, keep a lookout for a building that has a “planta full”.
This means that the building has an independent system for the entire building.
Believe me, if the advertisement does not say it, do not bother asking
about it. The good news is, that while this is a problem at the moment,
it will not be five years from now. Do not be afraid to purchase
a property whereby you currently need a power backup source. Luxury
apartments that have a “planta full” carry a premium with respect to rental
costs, but that will change as the power needs improve going forward.
Also, as the electricity situation gets better, so called non-luxury properties
or homes in secondary middle class neighborhoods will increase in value
because there will be a level playing field will respect to amenities.
There are some beautiful apartments and homes that simply sell for a deep
discount because of the location (and therefore lack of attention by the
electric company). Keep in mind that a US $2,000 expence for a power
backup system is in reality a small price to pay when you are saving $
50,000 or more on the purchase price of a home (when compared to home prices
in other parts of the Caribbean).
Costs More in English
If you have any high school Spanish skills
rumbling around the back of your brain, now is the time to use it.
The fact of the matter is, you will not find many people in the Dominican
Republic that speak fluent English. I do not care what your travel
agent told you. Yes, of course the desk clerks at some larger hotels speak
English. But do not expect to have any in depth and profound conversations
in your native tongue. The fact of the matter is, you will have a
hard time at the airport, with taxi drivers, with the corner “Colmado”
or convenience store and with the general population at large. This
also includes many well-educated professionals such as bankers, lawyers,
the folks at the Telephone Company, etc, etc. With the majority
of tourists currently coming from Europe, there is a greater possibility
of finding someone that speaks Italian, French or German as a second language.
It is not that Dominicans do not wish to speak ot learn English, quite
the contrary is true. It is simply the case that the majority of
foreigners visiting the country are not English speaking.
Now, with that said, just be aware that you
will pay more when you encounter someone in business that is catering to
the US tourist. This is especially true with real estate people.
Anyone marketing property in English knows that most Americans do not know
the local market and really have no easy way of finding out. The rental
costs of apartments and real estate will, in some cases, be quoted in double
to what a Dominican would pay for the same thing. Just keep this
tidbit of information in the back of your mind. Some Dominicans think
Americans are “loaded” and have no problem paying higher prices than the
locals. Remember – do your homework and brush up on your Spanish.
It will cost you, if you don’t.
So you have decided you like the Dominican
Republic and want to get settled in. Where do you look? Good
question…….here’s the answer. That depends. It depends on if
you want to live near the beach or directly inside the city. It also depends
if you like music or not. What I mean by that is, Dominicans are
very fun loving people. They like their music. I like their
music. But not every-night and not until 4:00AM in the morning. You
will find a very cozy 3-bedroom house for rent in some working class or
middle class neighborhoods that rent for $ 185 per month at current exchange
rates. No, that is not a typo, I did say $ 185 per month. Very
clean, very nice, with a front porch. The catch is, your chances
are pretty good that your neighbor is aspiring to become a Disc-Jockey
and would like the whole surrounding area to be aware of his music selection
skills. In all honesty, you could get that in any middle class neighborhood
in the US. The difference is, in the US, the other neighbors will
probably also complain about the noise and the police will come to address
the problem. Late Friday-Night block parties are the norm is some
districts. If you like that, then you already have your real estate focus
narrowed down. If you want conservative neighbors and a quiet atmosphere,
then that will leave you with another set of places to focus your search.
There really is a big spread in prices for
both rentals and real estate sales. Like real estate everywhere,
it is a function of location and amenities. There are decent places to
live for $ 300 per month with regards to rental rates. There are
very nice homes (new construction) for sale in quiet residential neighborhoods
for less than $ 70,000. It really all depends on what you want and
what you are comfortable with. Like everywhere else, bargain hard
and pay cash if you can. Non residents often find it difficult to
obtain local bank financing.
For Additional Information Regarding
Real Estate, Investments,
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