I am finding more and more foreigners that are buying Real Estate in the Dominican Republic. While I favor renting for many reasons, many people are taking advantage of the great Real Estate prices here, coupled with the good conversion rate between the US dollar and the Dominican peso which is currently about 38 pesos to the dollar.
Buying Real Estate in the DR poses several risks that are not usually a problem in the US. I’ll be going over many of these as this post progresses. Along with the additional risks there are other things you need to consider. It basically comes down to the necessity of taking your time and investigating the property before you make a purchase.
First thing to know is if you only speak English you are very likely to end up paying more for the property than you would if you can speak the local language, Spanish. This is the same whether you are planning on renting or buying a property. Personally I like to look around a bit, than have a Dominican friend come in at a different time and ask the price. He will usually be able to get the same property for at times as little as half the price.
Power and Water
It is important to understand that the utilities here are not near as good as in most countries. The voltage at a house I have rented in the past varied from 70 volts (sometimes less) to over 150 volts. Even a good regulator has a hard time coping with that much voltage change. Also, power is not always on. Some areas receive power only a few hours of the day. Just because the power is good a few blocks down the street doesn’t mean the property you are looking at receives the same power. Power theft is extremely common here so if your neighbors are all tapping into the same transformer as you expect your power to be very poor and inconsistent.
Depending on where you live water is also an issue. If you receive city water it may only be on at certain times of the day. There are many ways to compensate for this including cisterns and tinacos (water storage methods). You need to have an idea about this before you buy or rent the property.
Some condos and apartments have systems where they provide the storage necessary to give you close to full time power and water. If they are not proudly pushing this fact you can bet that it does not have it. As for power, there are some areas, in particular in the major cities of Santo Domingo and Santiago as well as other tourist areas where the city provides almost uninterrupted power.
If you are planning to buy a house you really want to take this into account. In most locations there is very little regulation as to how much noise your neighbors can make. Block wide parties can be held frequently, neighbors that blast their stereos at all hours of the night, houses that turn into bars at night (blasting the stereo) is common. Plan on checking out the area at night before you buy any real estate and realize things can change very quickly with the addition of one new neighbor. Some communities police themselves against this problem but expect the price for the land to raise considerable in these areas.
Popular Real Estate Locations
Where to start looking first will of course be determined by what type of area you want to live in. There are beautiful and cooler locations in Jarabacoa, Constanza and other mountainous areas. Some of the most expensive properties are found near the large tourist areas like Punta Cana. You can also find very nice beach areas near Puerto Plata, Sosua, Samana, and along the southern and eastern coast line from Santo Domingo to Bavaro. Bear in mind these can also be the first hit during a hurricane.
Real Estate Scams
This can be a pretty tough one for foreigners. It is pretty easy to get ripped off when buying real estate with or without a house already built on it. If the lawyer you use doesn’t provide the necessary searches (although they all say they do), you can end up buying land where the person selling it doesn’t have the property rights and you end up losing your entire investment.
Similar problems are frequently reported where construction companies contract to build on your new property and use your money to try and make good on other contracts and in the end not having enough money to complete your house. During the 3 years I have been here I have repeated read newspaper reports of this happening.
Well, do I have you scared yet? Good! If you really want to buy real estate in the Dominican Republic, this is a great place to live. I have only hit a few of the possible problems so far, keep collecting information and find a reputable real estate agent to help you. Don’t rush into any deal or it is likely to cost you. Spend some time in the area you would like to live (it wouldn’t hurt to rent a few months) and try to find other foreigners that have successfully bought property here to get advice from.