What is the Punta Cana Real Estate Market Like?
The Punta Cana and Bavaro areas on the East Coast of the DR are considered one of the fastest growing markets in the Caribbean! Post-construction property rates are still appreciating better than the entire international market averages. Pre-construction/ or under-construction properties are appreciating even faster due to the nice "early-bird" discounts the Developers provide, and even a higher discount for a higher upfront payment. Some investors buy 2 properties. One for themselves, and one to flip once all the condos are sold. Making anywhere from 12% - 20% ROI in a short period of time from construction completion, to marketing and selling as a viable resale.
Despite the worldwide effects of the pandemic, sales are still booming. Some owners took their properties off the market so as to keep their "landing pad" in case they need to relocate here on a more permenant basis, some increased their prices... while others, who leverage as a vacation rental properties, were forced to lower their prices to compensate for the temporary loss of rental bookings. Or a loss of income, a job or a business they own back in their countries. This all equates for a great time for new buyers.
We have no Covid-19 cases (I am aware of) here in the beach-town areas of El Cortecito or Los Corales... or even in the Residential Cocotal Golf & Beach, and other residential golf course communities; The East Coast of the DR is still booming with new construction despite this pandemic, with "higher than average" sales of both pre- and under-consruction properties, and existing and furnished resale properties.
How Big Is the Dominican Republic and the Punta Cana/ Bavaro areas?
The Dominican Republic (recorded) population as of 2021 is nearly 11,300,000. Punta Cana and Bavaro are growing rapidly. Today, the area has an estimated population of 110,000. The region covers approximately 1,100 acres and is considered to be more like a collection of small communities rather than a city. Currently from Punta Cana, to Bavaro and Uvero Alto, there are over 50 all-inclusive resorts and numerous residential communities stretched over 30 miles of beautiful beaches. For info on the local people and expat population, check out Why Buy in Punta Cana.
Reliable Realty DR only promotes properties within the most popular and reputable communities in the Punta Cana area. This includes El Cortecito, Los Corales, Bavaro, White Sands, Punta Cana, La Romana (45 minute drive from Punta Cana)... and now Macao; and includes the residential communities of Cocotal Golf and Country Club, Punta Cana Village and Resort, Cap Cana, and Cana Bay / Hard Rock Hotel (golf and beach) the newest residential area inside the golf course, located near Macao. Click here for Punta Cana Area Resources.
What’s the average cost of properties in Punta Cana?
We have and can assist in all price ranges (or budgets) from $75,000 U.S. to in the $$$millions. The average price really depends on what the prospective buyer is looking for and can spend. Our top selling properties are purchased as vacation homes (or condos), located on or near the beach. Ocean view condos are more expensive than the condo in nice communities just across the street from the beach (no ocean view).
Currently, the inventory of Ocean View condos is very, very low... and we are not making any more beach. They typical prospective Buyer can afford a 2BR/ 2Bath around 1250 sq. ft. (average). They have cash budgets of around $140,000. Some purchasers have about half of this amount (or $70,000 U.S.) and are still able to purchase a $140,000 - $150,000 property if the owners are willing to finance the balance; Typical terms are 50% down, for 5 years, at 5% - but can be negotiated slightly to meet the purchasers abilities and Sellers needs.
New condo Owners recieve a well-constructed, solid concrete block with all the fixtures for both RESALE;s and NEW CONSTRUCTION properties. All condos are situated within beautiful gated condo communities with a pool and often other onsite bonus amenties. If buying a resale in the beach-town areas, most all resales come furnished, and are just a short 6-15 minute walk to 6 public beach accesses. Depending on the location of the condo community within the beach-town areas, most are also just a short 2-18 minute walk to an array of excellent international dining options, bars, grocery stores, pharmacies, cute boutique shops, salons-massage places, tennis, cash exchanges, Dentists, small medical clinics, and other needed services.
Our agency only promotes properties within the most popular and SAFE areas (security/covid-19/ and govt. restriction safe)… Owners and visitors are free to walk anywhere without fear of safety; all condos we represent are in a well-maintained gated communities, offering sound and caring HOA (Homeowners Association) located in the larger cities of PUNTA CANA and BAVARO. These 2 cities include smaller towns like; El Cortecito, Los Corales, White Sands, Macao, and large golf-course residential communities of Cocotal Golf and Country Club, and Cana Bay / Hard Rock Hotel (golf and beach) near Macao; as well as luxury homes and condos (starting at $400,000) located in world-class self-sustaining golf course & beach communities in Punta Cana Village and Resort, Cap Cana, and La Romana (approximately a 45 minute drive from Punta Cana).
Why is it important to use a trusted real estate agency?
Real estate agents in the Dominican Republic are not yet required to be licensed and their activites are not always regulated by the government if they do not have a legal Registered tax-paying Corporation here. Always ask your agent if they have an RNC (taxpayer identification). It is best to seek the assistance of a reputable and well established real estate agency who is knowledgeable about the current real estate market and trends, who understand the Domincan Republic Real Estate Laws, and who have a network of reputable legal resourses (specializing in Real Estate, Residency, and Tax laws), to assure prompt and seamless sales transaction, all the way to title in your name. Those trying to buy real estate on their own to save money almost always end up paying more with a much longer sales process, and numerous headaches. It is always advisable to work through a trusted agency. For more, visit Why Choose Reliable Realty DR.
Do foreigners need to be residents of the DR to buy properties?
There are no restrictions for foreigners buying properties in the Dominican Republic. You receive a freehold title in your name, and have the same rights as any landowner in the Dominican Republic. Foreigners do not need to be residents (although there are government incentives for being one). Because this area has grown so fast, and Covid-19 has limited the amount of Government employees at the Register of Deeds, and other supporting Real Estate governed offices. Meaning, it may take up to 6 months to receive an actual title now. But titles always come to our purchasers. In the interim, no worries...your legalized / notarized Definative Purchase Contract is honored as proof of ownership until your actual individual title is processed and received.
What is the procedure for buying properties in the DR?
The process isn't difficult when you use a reputable Realtor / Broker and Attorney i.e. one experienced in Real Estate, current taxes, is prompt, responsive and speaks English. Your Realtor will refer a reputable and experienced Attorney; then if needed, homeowner insurance agencies, furniture / decorator providers, various contractors, and a great Accountant, if setting the property under a corporation Accountant referrals. All English speaking with an understanding of the North American culture and expectations.
When working with Reliable Realty DR, once we've shown you a property that you want to purchase, we assist with the following steps:
STEP 1: WRITING A DETAILED PURCHASE OFFER (PO): To start, your ID information (passport or cedula ... if you are already a resident here, and 1 more picture I.D. (i.e. your driver's license). The PURCHASE OFFER (PO) will additionally contain.. .the Offer Price, the contingencies/ conditions, inventory mentioned, and default penalties for both sides, etc.; typically this PO holds the property for 30 days, once the PO is signed by both parties and the Buyers 5% reservation or earnest deposit is received by the Real Estate Agency and held in escrow, or if buying Pre or New Construction; the deposit is held by the Developer and reciepts are provided.
STEP 2: The PROMISE OF SALE CONTRACT: Once the PO IS signed by the Parties and the reservation deposit is received; We work directly with the referred and selected Attorney who will write the legal PROMISE OF SALE CONTRACT - This contract basically includes all the terms and conditions expressed and agreed upon in the PO,then adds all the legal jargon required by the Dominican Republic for Real Estate transactions. In some quick cash purchases, the PO is honored and the Buyers go direct to the Final Contract...
STEP 3: The FINAL CONTRACT called the DEFINATIVE CONTRACT.
A) In the case of buying an existing property (or a resale) with cash; Once the Promise of Sale Contract is finalized, and the final payment is received by the Seller(s) a final contract is formulated by the Attorney called the DEFINATIVE CONTRACT. This contract establishes 3 important points: A) The property is confirmed as "paid in full", B ) The Seller relinquishes all ownership rights and obligations to the new Owner, which the Owner accepts (i.e. utility costs, HOA fees, insurance payments, forthcoming costs... but also any rental income is pro-rated (if any) and credited to the new Owner. C) Finally, it establishes the amount of the IPI valuation (or assessed value... which is almost always lower than the Selling price)... shown in pesos. This is the amount of the onetime 3% transfer tax due by the new Owner; They attorney can pay this on behalf of the new Owners.
B) If Financing direct with an Owner; An additional Mortgage Contract is required and coorespond to the Sellers; The title will still be transferred into the new Buyers (Owners) name(s), and the transfer 3% title transfer taxes will still be required... but in this case a lien on the title will show against the property until the agreed payment schedule is full-filled. Then the Attorney will submit proof of payment in full with the Register of Deeds, tax Depts, etc., and the Attorney can proceed with the "proof documents" to remove the lien. A new title will be provided 3-6 mos. later in the new Owners name(s) but without the lien.
C) If buying Pre- or Under-Construction properties, the Developer will hold the reservation deposit (varies from $1000.00 U.S. to up to 5% of the agreed selling price. Our clients would still require an Attorney to assure the Developers sales contracts are fair and balanced. Once approved, and signed by the Buyers and the Developer(s), the next payment between 20% - 25% is required within 30 days. If more is paid upfront, most Developers will provide discounts off the standard asking and selling price. Payments are then made during the construction process (varies depending on the size of the new Development, when the Buyers purchased, how far along the construction is, if there are separate construction phases in Development, and the financial abilities of the Buyer(s), approved in the intial purchase offer. Typical time periods are between 18-24 months. 10% - 25% of the payment is heldback until the construciton is confirmed (by us) as completed and fully operational.
STEP 5: ONCE THE DEFINATIVE (or Final) CONTRACT IS SIGNED (Payment received - to Sellers, Attorney fees, and taxes paid), all confirming documents will be registered by the Attorney with the Register of Deeds, with the 3% title transfer taxes paid to the Tax Department (Attorney does this on behalf of the Buyers represented) . Then it is simply a waiting period of anywhere from 1 - 6 months before the new title to the property will come to the attorney in the new Owners name(s). NOTE: Before the pandemic, a new title in the Buyer(s) names only took around 4 - 6 weeks to obtain.
STEP 6: GETTING THE PROPERTY READY FOR OCCUPANCY (i.e. utilities set up, furnishings, customizations, upgrades, if needed, insurance, etc.), Our agency assists with all the details from start to finish and beyond.. i.e. Project Management (boots on the ground for new construction... or renovation projects), Property Management... which entails several diligences (change of names on all utilities, painting preferred colors, full inventory, perhaps some minor repairs or updates. If not furnished... furnishing, accessorizing. And, If the property is going into our Vacation Rental Program, various steps are done to assure the property is well equipped and well adverized to secure bookings of short-term vacation rental guests; and offering nearly all the same services, as a resort to the Owners and their guests.
That’s it! WELCOME TO THE DOMINICAN REPUBLIC! – We are always here to assist our owners for life!
Can I get financing there?
Bank loans here are difficult for foriengers to acheive if they do not live here full or part-time. The process takes several months, and interest rates here are still very high (8-10% average - variable too). So we do not recommend trying to get a bank loan here if you do not reside here. Better to find a property where the Owner (typically an American or Canadian) will agree to finance directly with another American or Canadian.
What if I want to rent out my property? Can I make enough income to cover my cost of ownership?
Many buyers rent out their properties to vacationers and long-term renters. This income will cover all, or at least a good portion of your costs of ownership (assuming there are no worldwide events... like a pandemic) that affect the average booking stats, due to other countries impossing challenges for vacationers to travel here with ease.
What can I expect to pay in property taxes?
This is one of the best incentives offered by the Dominican Government to foreign investors. Tax Abatement law #151 basically states that you are exempt from paying property taxes for 15 years on property purchases that fall under 7.4 million pesos. The peso to U.S. Dollar exchange rate over the past 7 years has remained fairly consistent, meaning property assessed values (or IPI Valuations) equating to approximately $126,000 -$147,000. IPI values have been rising over the past few years, but on an average equate to around 60% - 75% of the properties actual Selling Price. Meaning you could buy a property for around $240,000 (as of 2021) and you MAY still qualify for this property tax exemption for up to 15 years. The representing Attorney will find out what the IPI (or Assessed) valuation is once the Purchase Offer is signed by the Parties. This report takes around 2-5 days to receive.
If the property IPI valuation is over the approx. 7.4 million pesos, the annual property tax is only 1% of the IPI valuation. Very affordable.
The newest Tax incentive offered by the government is called CONFORTUR. Many New Construction Developments have qualified for this new tax incentive. In a nutshell, the development must be in a touristic designated zone (near the resorts). Numerous requirements: i.e (short list) the buildings must be built to withstand hurricanes, and up to a #7 earthquake, They must have elevators and steps, ADA complient for the disabled, there must be an onsite lobby and full-time security and Adminstration onsite for all incoming and outgoing personnel, additional Safety, hazzard inspections, additional parking spaces, a swimming pool, and other onsite bonus amenties, beach access, health and safety certifications. In general, the New Development must operate similar to a resort. Those New Construction Developments that do qualify (check with our agency first) are exempt from the one time 3% title transfer tax, and are guaranteed the 15 year Property Tax Exemption, regardless if the IPI or Assessed value is higher than 7.4 million pesos. This tax exemption status is not transferrable to the second buyer (on a resale).
What taxes, fees and closing costs are involved when acquiring property in the DR?
There are very few fees involved with buying a property in the DR. On average, the legal fees and the onetime 3% title transfer tax could amount to arround 3.5% - 4.5% of the property purchase price. Closing costs include all attorney fees, title registration, and the one time 3% government title transfer tax. Visit DR Real Estate Law and Process.
What about property insurance?
Full Homeowners Insurance can be purchased for 1% of the purchase price (including tax). Homeowners insurance covers fire, earth quakes, hurricannes and flood damage, theft, furnishings, tenant liability and much more. You can purchase property insurance once the Definative or Final contract is signed and the Sellers have confirmed reciept of their proceeds from the sale. Our agency can provide 3 quoutes from the top and most reputable insurance companies here.
Is there Title Insurance available, and is it recommended?
You can buy Title Insurance. Stewart Title is here in the DR. They have been established in the DR for many years and provide title and closing services, as well as dependable title insurance and escrow services. However, Title Insurance in most cases is redundant to what the Sales Contracts already guarantee, so we don't always recommend title insurance, as it is viewed as paying twice for the same gaurantees. Please check with our agency if the property you are considering is one we do recommend Title Insurance.
What about condo fees?
Condo fees vary by the complex or condo/ villa community. Generally (as of 2021) they average around $110.00 - $125.00 U.S. per month for a one (1) bedroom condo; $-160.00 - $225.00 U.S. per month for a two bedroom condo... these are the average HOA fees for condos in communities located across the street from the beach (6-10 minute walk). Condo or HOA fees are about 2.5 times higher for a property located inside a beachfront condo community, and for an actual single-family house (or villa) within a golf course that also has a owners beachclub (perhaps a 5-20 minute drive away).
The HOA fees include maintenance of the grounds and pool, 24-hour security, community lighting, and misc. exterior bldg. repairs, water, trash disposal, weekly fumigation (for mosquitos/ bugs), and sometimes community internet, and propane gas (gas dryers and gas stove/ovens. For Beachfront condo communities, or properties within a golf-course community, there is an additional fee that includes maintenance of the golf course, private beach-club, costs to support an onsite resturant, personal pool and ground maintance (for a yard), and perhaps a fitness center/ gym, etc.
What about bequeathing real estate to my children?
There are no restrictions on foreigners bequeathing titles of real estate property in the DR to their children. The property will automatically go to the children of the Owners, (covered in the Sales Contracts), unless there is a legalized WILL established in your country that names a different person. Legal married spouses must be included in all real estate purchases. If one partner passes on, the spouse will inherit the property. If both owners pass on, the property is passed to the children. No worries about the government here taking the property or probate courts. It is recommended all purchasers establish a WILL with inclusion of this property.
Inheritance taxes for beneficiaries who reside here have been lowered to 3% of the appraised value of the estate. If the beneficiary resides outside the DR, inheritance taxes are 4.5%.
How do I find the right property and community?
Complete our PROPERTY QUESTIONNAIRE so we can narrow down the very best options for you based on your budget, preferred location (if known), and other criterias.
How can I know if buying in the DR is a sound financial investment?
Check out Punta Cana Investment Resources, Reliable Realty DR in the Media, and read about how you can earn income on your property in Nine Ways to Buy in the DR
ANSWERS TO OTHER COMMON QUESTIONS/ CONCERNS:
Can I become a resident of the DR and still retain citizenship in my home country?YES. You can have dual citizenship with little or no restrictions (check with your home country). For more on acquiring residency, visit Relocation and Residency Guides. The cost (as of 2020) is around $2,500 per person for an English Speaking Attorney who will assist in all requirements. Per person discounts offered for couples and/ or families securing residency at the same time.
Is it safe there?
YES INDEED. See "The Low Crime Rates" in Why Buy in Punta Cana; Additionally the Bavaro beach-town areas and other gated golf course communities have become very nice "safe havens" eliminating the worldwide pandemic affects (from the Covid-19 virus, riots, loiting, government control - strict mask requirements, etc.). Yes, masks are required here for larger groups, and inside businesses (i.e. grocery stores). Quick electronic temperature ck's, and hand sanitizers are provided upon entrance. However, beaches, golf courses, tennis courts, and restuarants are open, inside and outside, with the required social distancing requirements.
Is Punta Cana very developed in terms of infrastructure, technology, etc?
Yes, for the past 4 years Punta Cana and Bavaro have been ranked in the top 3 as one of the fastest growing areas in the Caribbean. The newer DOWNTOWN PUNTA CANA area has helped bridge the infastructure between the 2 main cities of Punta Cana and Bavaro and is considered another hot booming real estate area since 2016.
What are the Hospitals and Healthcare like? Is Healthcare affordable?
AWESOME and very affordable! Details coming soon!