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Can I hold title to property?
Sure you can. One of the largest US title companies, Stewart Title, has an office in the Punta Cana area. They can provide title and closing services for your DR investment. Contact us for more details.
What is the real estate market like?
Booming! Pre-construction properties are appreciating at a minimum of about 30% per year. Post-construction properties are appreciating a little slower, but still at a very attractive rate.
What are the condo fees and what do they cover?
Condo fees can vary depending on the particular community. Generally they run anywhere from US$80-150/mo for a 1 br and US$120-250/mo for a 2 br. The fee includes maintenance of the grounds, tennis courts and pools, 24-hour security, water, maintenance of the beach, etc.
Is there financing?
Yes. With a minimum FICO score of 640 you can get up to 80% loan-to-value for about 8.5% APR.
Can I rent my property when I’m not there? What are the fees?
Of course. We at ERA Punta Cana would be happy to manage your rental for you when you are not here. Rental fees are 1 months' rent for an annual contract to place the tenant, then 10% monthly for the management fee. A 6-month lease will cost half a month's rent for the tenant and the property management fees are the same, plus miscellaneous expenses such as cleaning and maintenance, which are nominal.
What are the fees for buying a property?
There are very few fees involved with buying a property in the DR. Estimate approximately 5% in one-time fees based on the purchase price. This includes attorney’s fees, title registration, and government transfer tax.
What are the property taxes like?
Very good. You will pay taxes on ever dollar above approximately US$160,000 at a rate of about 1% per year. For example, if you purchase a property for US$200,000 you will be responsible to pay taxes on the US$40,000 difference from US$160,000. This means you will pay 1% of US$40,000 which is US$400.
And what about insurance?
Insurance can be purchased for about .8% of the purchase price (including tax). This includes coverage for fire, electronic devices, and liability. You can purchase property insurance at any stage of construction from raw land to the finished product.
How does the buying process work?
Very simple. First you make an offer. It's a 1-page document with only the highlights of the transaction (i.e Name, property location, price, terms, initial deposit). Typically this comes with a separation fee of anywhere from US$1,000 up to 30% depending on the developer and the stage of the project. A formal contract follows within a couple of weeks. It is in spanish since this is a spansh-speaking country. My office can provide contacts for you to have your contract translated if needed. At this point a second deposit is usually expected according to the purchase offer. After the contract you simply continue paying according to the agreements.
Q: WHO IS STEWART TITLE?
A: Stewart title is one of the largest and most respected title and escrow companies in the world. They are based in Houston, Texas and have over 5000 offices world wide, in over a dozen countries (USA, Mexico, Dominican Republic, Austrailia, Spain, United Kingdom , Korea, Poland Turkey, others). Stewart Title has been publicly traded on the NYSE for over 10 years.
Stewart Title offers:
Title guaranty
Recorded documentation search
Escrow
Document custody
Closing service
Administrative service for projects
Credit report
Basically they protect you, the foreign investor. They are a US based firm that is here to make acquiring property easier and safer for you.
Q: WHERE IS THE DOMINICAN REPUBLIC LOCATED?
A: The Dominican Republic is located in the Caribbean Sea, close to Puerto Rico and all the Caribbean islands.
Q: WHAT DO YOU RECOMMEND THAT I DO WHEN I WANT INVEST IN A VACATION HOME?
A: The best thing to do is get someone to recommend an attorney that they have used. The following list may seem a bit complicated, but the attorney can take care of almost anything. Stewart Title recommends:
Research the title certificate
Check the legal status of the company
Find out where to go for all required procedures
Hire a lawyer
Research Zoning Laws
Ask about other related payments, such as maintenance fees, cable, etc.
Inspect the property or the plans if its not yet built
Submit your documents on time
Double check the sale/purchase contract
Register you purchase quickly
Q: HOW LARGE IS THE POPULATION OF THE DOMINICAN REPUBLIC?
A: 8.8 million persons (2004), with the majority between ages 15 and 64
Q: HOW ADVANCED IS THE TRANSPORTATION SYSTEM? IS IT SAFE?
A: There are seven major airports, including Punta Cana, La Romana, Puerto Plata and Santo Domingo. There is an excellent highway system which goes through the entire country. It is a very safe country with a lively culture. Rememebr, the locals survive off of tourism
Q: WHAT TYPE OF ECONOMY / GOVERNMENT IS FOUND IN THE DR?
A: There are four main sectors that mobilize the Dominican economy: tourism, free trade parks, mining and agriculture. Tourism is the fastest growing sector. The agriculture is largely based on sugar, tobacco and coffee.
The governemt is an elected democratic republic, similar to that of the United States, but not as advanced or efficient.
Q: DOES THE DOMINCAN GOVERNMENT MAKE IT DIFFICULT FOR FOREIGNERS TO ACQUIRE REAL PROPERTY?
A: No. The government actually encourages foreign investment and has implemented very simple rules for acquiring property and very lucrative tax benefits. Simply speaking, all you need is a good attorney to take care of the paper work, and you'll be on your way.
I could get into all the requirements needed to purchase a property, but really you are better of speaking with an attorney and they can explain it better than I could.
Q: WHAT IS THE LOCAL CURRENCY?
A: The local currency is PESOS, but dollars are widely accepted. Euros are accepted in most resorts. The local exchange has been stable at approx. RD$33.00 to US$1.00 (thirty three pesos to every one US dollar)
Q: ARE THE CIGARS IN THE DOMINICAN REPUBLIC REALLY BETTER THAN CUBAN CIGARS?
A: In my opinion, they are both great. But, there is a simple fact that leads one to believe that DR cigars are taking the lead and that is because the soil here is cultivated and then allowed to rest and regain its minerals. Cuban soil is constantly cultivated to meet worldwide demand and is not given enough time to replenish itself.
A good cigar here is an ARTURO FUENTE GRAN RESERVA ($8) or the top of the line OPUS X ($50).
Q: WHY ARE THERE SO MANY “SPECTACULAR” PROJECTS UNDER WAY RIGHT NOW?
A: Simple, the DR is close enough to the United States os that you can “get away,” but not have to go to far. Also, the Caribbean is pure magic. Also, don't underestimate the vision of people like Jack Nicklaus, Pete Dye, Arnold Plamer, Nick Faldo. These are huge names with huge reputations. They would not all be here if it wasn't going to be a success.
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