.
Build,
buy or rent, the Dominican Republic still remains to be an ideal
destination
for real estate bargains, and as a possible retirement or relocation
destination
as well. In this article, we will discuss the current real estate
market (how to find the bargains plus local constructions costs to
build
your own home), but also want to highlight in general why the Dominican
Republic is so attractive overall for those seeking to live in the
Caribbean.
....
First and foremost, while
finding
reasonably
priced real estate is of importance to many, there are other
considerations
equally important as well. One such consideration is what I would
call “Island Fever”. That is to say, many believe the stereotype
of a typical Caribbean Island as a postage stamp sized location under
the
sun, and this is often the case with many islands. Aruba,
Antigua,
Tortola and others, (just to name a few) are indeed very nice islands,
but chances are you can drive such an island completely and still be
back
in time for lunch. While this may be quaint and appealing for
some,
a good number of people often eventually feel confined or
claustrophobic
as a result. The Dominican Republic in contrast is located on the
second largest island in the Caribbean, offering both high mountains
with
pine trees and ferns, plus beautiful white sand beaches all at the same
time. Many have compared the land mass of size as being about or
slightly larger than the US State of South Carolina. As an
illustrative
example, the drive from the modern metropolitan capital city of Santo
Domingo
(population 3.6 Million) to the North Coast town of Puerto Plata takes
about 3 to 4 hours. The drive from Puerto Plata eastward to the
Samana
Peninsula takes an additional 4 hours. If you want to drive from
Santo Domingo to the Punta Cana or Playa Bavaro area, figure on about 4
hours as well. So, if you want to see the country, pack either an
overnight bag or lunch, depending how far you want to go.
.
....
This of course leads
us to the
discussion
of diversity, quality of life and other issues. If you want to
live
in the Caribbean, but still want the benefits of a city, then Santo
Domingo
or the second largest city of Santiago (population 1 Million) might be
your choice. What’s in Santo Domingo and Santiago? Movie
theaters
showing
recent releases one week after they open in New York or elsewhere (in
English
with Spanish subtitles), plus a variety of international restaurants as
well (not to mention a variety of clubs and nightlife). For other
activities and shopping, there are bowling alleys, art museums,
orchestra
and ballet, modern shopping malls, supermarkets stocked with a number
of
American and European brands, PriceMart, Radio Shack and other familar
chain stores. Many major universities also, just in case you want
to
keep busy by
studying
for a medical degree at a cost of roughly US$1,000 per semester.
Of course if your idea is to get away from it all, then you have the
option
of the highest mountain range in the Caribbean or miles of uninhabited
beaches. If your ideal place involves having the best of both
worlds,
well – you can. Couple this with high interest tax-free US Dollar
banking or other investments (current interest rates are up to 7% for
US Dollar deposits, interest paid monthly) and online internet banking
access, the appeal for many is not too hard to understand. In addition,
three major international airports offer direct flights to New York,
Miami,
Philadelphia, Panama, Venezuela, Aruba, Spain, Holland, Germany,
Martinique,
and France (among other destinations).
...
Now that you can understand
why
someone
would consider the Dominican Republic, let us discuss the real estate
market
by starting with the nation’s capital, Santo Domingo de Guzman.
Just
as in the case of any growing city, Santo Domingo is expanding,
primarily
to the north and to the east (towards the airport). As a result,
smart investors might want to buy inexpensive land on the fringes of
the
city and wait for the city to come to them. This is in fact when
happened in places like Los Angeles, during the boom period of the
1950’s
to the 1970’s. In fact, as of spring 2005,
it is still possible to find 5,000 square foot home lots in a new
residential housing project 20 minutes from the city center for the
equivalent of US$20,000. Similarly, you can find other properties
outside of a planned development, such as one-half acre parcel starting
at the equivalent of US$25,000. So, the reasonably priced
properties are out there, all within close distance to modern stores
and conveniences. But while properties in the city
center
of
Santo Domingo might still seem reasonable in comparison to
North-American
cities, such as Denver, Toronto, Seattle or Chicago the fact is that
prices
have come up. This in part has been a function of the
economy and also demand (many
Dominicans
are now moving back from New York and elsewhere). As a result,
the
real bargains are to be found on the outskirts. As an example,
new
luxury 1,700 square foot (and up) apartments directly within the city
can be
purchased for
about
US$100,000 and up (2 or 3 bedrooms plus maid’s quarters, 24-hour
doorman,
intercom, off street parking, etc.). Small new homes in
residential
tract developments will start off at about US$75,000. However,
as we stated, one
can purchase a building lot within 15 minutes of the city for
about
US$20,000 and build what you like.
...
While
building costs will of
course
vary
on how complicated or luxurious you build, costs will of course be a
function of how you want to finish the house (imported tile, marble
floors, types of windows and doors, very upscale kitchen,
etc., etc.). To offer an illustration, one
client
told us they obtained an estimate of US$107,000 to build a 1,000
square
foot hunting cabin in the southeastern United States. In the
Dominican
Republic, an identical sized home will cost about US$45,000 more or
less to
complete (in fact there is a builder offering new 1,200 square foot
homes 20 minutes outside the city for US$50,000 - on a 2,000 square
foot lot. However, it is important to note that we are talking
about
a home built with cinderblock, poured concrete and metal bar
inside
the block. Wood construction is actually more expensive in the
Dominican
Republic and no one in his or her right mind would build with wood
anyway.
Concrete or block is stronger, insect and weather proof, and can be
finished
in such a way in that you would swear your walls are solid poured
plaster
(the way they used to build houses in the US or Canada 80 years
ago).
If you finish the outside facing with attractive local stonework you
can have a very attractive home that would be almost prohibitive
cost-wise
elsewhere.
Plus, you will have a house that never needs painting and will last
more
than a lifetime. Not fancy enough? Add a red or orange
colored
Spanish terra cotta style tiled roof or imported Italian and Spanish
ceramic floor tile.
.
While some building materials
will
cost
about the same as they might in North America or Europe, the real
difference can be found with
local
labor costs. A seasoned master mason will charge about US 70
cents
per block for labor. General construction labor will cost about
US$10 per day (no misprint, per day – not per hour). Other
labor
such
as plumbing (using the very same PVC pipe used in the US) or
electricity
at equally reasonable costs, but you must of course shop around and get
a few estimates.
....
The real key of course to
finding
real
estate bargains involves staying away from the normal traps. That
is to say, there are always two markets, one for the locals and one for
the tourists. Can you guess which costs more? While it certainly
may
be more comfortable for you to obtain a nice brochure in English with
pretty
photos, you can believe you are paying for it in more ways than
one.
Stated another way, while some very nice residential developments
exist,
such properties being offered at US$80,000 for a building lot or
US$400,000
for a home are not only outrageous in price, but also way off what a
local
Dominican would pay for the same thing elsewhere. So, learn to look
where
tourists fear to tread or may not know about, which most certainly
involves
brushing up on Spanish (the official language of the country). In
summary, the true real estate bargains and true local real estate
prices
are not to be found by reviewing real estate being marketed in English,
or by visiting some of the high priced real estate chains either.
Bargains will be found by doing some of your own investigation and by
talking
to the local people directly, and simply by scouring the local market.
...
We
discussed the city of Santo
Domingo,
but what about the rest of the country? Certainly, there are a
number
of very inexpensive or reasonably priced properties both in the
mountains
and at the beach if you know where to look (and if you poke around in
the
countryside yourself). In the past, one of our clients reporting
buying a
roughly
one acre lot on a bluff overlooking the ocean (North Coast) for
US$22,000.
Another client has purchased 8 acres of farmland for US$27,000.
Yet another purchased a smaller building lot for US$14,000. One
client
rented a small but very nice home in the mountains for US$350 per
month.
In Santo Domingo, a brand-new 4 bedroom 3 bath home (the master bath
even
has a jacuzzi) in a residential area recently rented for US$475 per
month. Granted, these are examples of what some of our clients have
paid in the past (2001, 2002, 2003, 2004) but the point is that these
situations are possible, if you
take
the time to scout around. Stay away from ads offering rentals in
US Dollars. You will find a few of these kind of advertisements,
but no Dominican in his right mind would (and certainly most do not
have the capacity, even prefessional people) pay US$1,500 monthly
rental for a home or apartment. The highest priced monthly
rentals we have seen (in pesos, for a very upscale apartment in Santo
Domingo) have not been more than the equivalent of US$800 per month,
and even this is high by local standards.
.
Where are some of the
best places to
investigate?
Well, mainly in those places, which are undiscovered by tourists or we
can say undeveloped. For beachfront, such areas include sections
of Barahona, west of Santo Domingo and the areas near Miches and Sabana
de La Mar on the inside bay of Samana. The Samana peninsula also
is a beautiful spot and is also one place to look as well.
However
it is starting to become discovered and this in and of itself has
driven
up some real estate prices accordingly. For property in the
mountains
or non-beachfront, areas around Salcedo, Monte Plata, and San Juan
offer
some prospects.
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