For both Americans and Europeans, cost of housing (your largest initial or monthly expense by far) has certainly gotten out of hand in the US and Europe.  On the one hand, chances are you currently have a middle-class home or apartment that you are living in at the moment, which can be sold for prices ranging from US$300,000 on up.  If you currently live in or near a major metropolitan city in the United States or Europe, you probably are nodding your head in agreement as you read this.  However, the question becomes, what do you do or where do you go that allow you to afford something similar for far less - without sacrificing your lifestyle? 
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In terms of offering the most affordable real estate in the Caribbean (in relation to the very over-priced Bahamas, Aruba, St. Martin and many other familiar places you might have been considering), the Dominican Republic stands head and shoulders above the rest.  Right now, in 2005, you can easily purchase a brand new 1,400 square foot 2 or 3-bedroom apartment in a residential section of Santo Domingo or Santiago starting at about US$70,000.  If you prefer a 3 bedroom single family home, new 2,000 square foot homes in a very nicely done secure residential community can be purchased for about US$100,000 up to perhaps US$150,000 (all depending upon size, features, etc.).   And if you are concerned about style and quality, think again.  Many of these new homes and newer residential housing projects are exactly the kind of homes you might find in Florida - but at a fraction of the cost.

So, let us assume you sell your current dwelling in the US or Europe for whatever amount (for our example, let us assume the equivalent of US$300,000) and you find the perfect home in the Dominican Republic for about US$150,000, complete with marble finished bathrooms, mahogany cabinets in the kitchen and many other attractive features as well - Now what?  Well, with the difference of US$150,000 you invest your money into a local bank certificate of deposit denominated in Pesos (the local currency of the country) earning a 20 per-cent rate of interest.  You now have a fully paid for home you own free and clear, plus a monthly income of about RD$70,000 or about US$2,000 - all from the sale proceeds of your previous home.  With this amount of a monthly income, you should live quite well in your new home - and newly adopted country (and you have not even touched your other savings, investments or pension funds).

But how is it possible you can live so well in the Dominican Republic on this monthly amount?  A very good question and here is the answer.  With a fully paid for home or apartment (no mortgage, no monthly home payments either for rent or otherwise), your basic living expenses will involve utilities, food, leisure activities, etc.  In regards to utilities, you can expect your monthly electric bill as a worst case to total about US$250 per month with constant running of your air-conditioner (your bill may even be much less).  Your telephone and high speed DSL Internet bill to total about US$150 and your monthly cable television bill about US$60 - for roughly 90 channels, 14 or so in English (CNN, HBO, CINEMAX, The Movie Channel, BBC News, CNBC, CBS, ABC, The Disney Channel, etc.).  Remember these are high estimates, as your own expenses for such things could be lower. Of course, the other question is what would the same things cost in Florida, California or Europe?

In regards to other living expenses, such as food shopping, entertainment and so on, this will be a function of what kinds of items you want to buy and what you want to do.  In other words, if you have fairly simple taste and stick with local products, your food bill will be quite reasonable.  In fact, local fresh fruits, vegetables, meats, etc. are inexpensive in comparison to prices in North America.  Imported food items of course do cost more.  Regardless, it is not unreasonable to assume a monthly food budget for two people ranging from US$400 to US$700 with variables being local versus imported food products, plus how much you might spend each month on things like wine or spirits. 

So far, we have spent roughly half of your monthly bank account interest earnings on food and utilities, and you have not skimped or denied yourself anything either.  The other half we can spend on things like golf, eating out, movies, plus a maid who will come in every day 9 to 6 Monday to Friday (plus cook, wash and iron) for about US$150 per month.   Aside for this, living in a tropical climate means less expenses for clothing because there really is only one season - constant year-round summer.  Also, living on the second largest island in the Caribbean (about the size of South Carolina) means you have the option of both the beaches and the mountains, within a short car ride away.  Not to mention what could possibly be the largest selection of vacation resorts of any Caribbean destination (more than 30 at current count) to treat your self to over a long weekend.  In fact, resort rates are often deeply discounted and advertised in the local newspapers during off-season for tourism, so you can very well invite friends and family for a few days of fun - at a price that is quite reasonable.

Some 2005 Questions and Answers About Living In The DR, Economy, Banking, Etc. :