Looking to purchase a property in Punta Cana

@tliew1  At the risk of sounding jaded, which I promise you I'm not, DON'T.  Don't even entertain the idea.  Punta Cana is NOT the Dominican Republic, it is a giant tourist area.  But, it is still the DR for rentals.  Unless you have a huge appetite for headaches, stress, non-stop problems and complaints, and have an enormous amount of money you're willing to throw into an investment that will only pay off in decades IF you manage to sell it.  Honestly, trying to manage 10 units from a foreign country is a recipe for disaster.  Find some people that just own a vacation home here, that don't even rent it out, and ask them about their issues.  Please visit somewhere else on the island, rent for a month or so, experience it for yourselves.  It is a beautiful, awesome place, but it will chew you up and spit you out if you are not prepared.  I say this as a former property manager and rental owner from Ontario, a current business owner here, and dabbled in renting our villa for a few months here while we rented in the same town here.  It is not what you think it will be at all.

@UncleBuck

🎯 Pretty sound advice UB. I cannot even begin to imagine the amount of buyers remorse for the uninitiated to DR life.

@tliew1

First thing is get an inspection and an attorney t walk you through everything. All documents are in spanish, so be sure you have an honest interpreter. Buying a building will do two things ...Make you a resident by purchase (if over $170K) but as a business will be subject to taxes..I own property and did buy residency by purchase, however as long as I do not stay there one whole year, I will not be subject to full taxation, only 50%.  An attorney can advise you on other business costs you'll incur. Expect to pay the attorney about $5k up front for representation...could be more.

Truth in commenting:  My wife and I have been landlords for over 40 years in the US.  We've never owned property in the DR, but have spend considerable time investigating the market for both personal (our own) use and as potential investments.

Our conclusion is that as perennial snowbirders each winter, it's just plain not wise to purchase investment RE property in the DR.  If you're talking major corporate level, sure -- money can be made.  But they also have the resources to protect those investments.  You probably don't.

My advice:  Don't even start considering this purchase unless:

1. You speak Spanish fluently.
2. You are going to live in one of the units (not recommended) or within 20 minutes drive AT MOST (better, but not perfect).
3. You need to be able to keep an eye on your investment.
4. Good rental managers are hard to find in the DR.  The good ones are also going to be very expensive. 
5. If you're trying to do it yourself, you definitely can't do it from abroad.  You also can't do from within the DR unless you're reasonably close to the property.
6. Good housekeepers are not too hard to find in the urban areas...but hard to keep.
7. Good housekeepers can be found in the hinterlands, of course.  The problem is whether they are RELIABLE or not.  Their understanding of time & appointments is probably going to differ significantly from your own. 
8. You can get a solid grip on the labor laws in the DR -- which vary BIG-TIME from North America. 
9. If you hire this out through a rental agency...expect to pay premium rates for the labor.
10. You intend to market these units SOLELY to EXPATS from USA or Canada. 
11. You'd make far more money this way -- as long as you deliver a product emulating reasonable North American standards of habitability and reliability.
12. You would have the ability to do reasonably deep credit and reference checks on your prospective tenants, back in the USA.  Again, not 100% perfect (no credit check anywhere ever is)
13. You'd have reasonable expectation that furnishings wouldn't all sprout legs and walk off.  No, not perfect, but pretty good expectations.  Still would need SOLID security systems and protection, to keep the neighbors from "finding" your possessions "out in the street," abandoned, so they just knew you didn't want them anymore and they decided to give them a new home (out of the kindness in their hearts, of course).
14. You could also try the AirBnb route...but only if you're close enough to keep an eye on your property.

Now, obviously, ALL OF THESE ISSUES CAN BE OVERCOME, if you are talented, dedicated and eager enough.  I don't mean to say otherwise, and there will probably be some folks in some forums that brag about how they've made a fortune in DR RE.  I don't doubt them.

1. The question you must ask yourself is: Do I want to spend this stage of my life with the constant time demands and frequent headaches of managing properties and tenants?
2. After our own research, we decided our answer was NO.  Subsequently, we reduced our RE portfolio back in the States, and put the funds into REITs and other investments. 

Whichever path you choose, there will of course be opportunities and risks.  Just choose what is best for YOU!

Best,

Jim

ExpatRusher

@ExpatRusher

Wow, excellent post

@LiveAtlanta

Great advice! Just wanted to add that by law, any contract is to be provided on both languages, which ever that second language might be. I can’t recall the law number/code now but there is a law in this.

@aurincdisla

Is this only real estate purchases? In over 21 years I have never been provided any contract in 2 languages.

@ExpatRusher

Thank you so much for your wonderful advise. It really gave us an insight of things.