A Dominican Republic real-estate primer
A few people asked me why I'm selling my penthouse in Sosua?? Am I bailing?? Actually just the opposite. First a little background.
I've been traveling the world for 20 years now and have bought homes in my favorite two destinations -- Cartagena (Colombia) and Sosua. I live in S. Calif and try to visit each place every two month. Yup, I got a lot of FF miles ....
Now my penthouse in Cartagena is great (www.singletravel.com/cartagena) and it is rented 90% of the time. Infact I must make a reservation to visit and I love the place. But I'm also a business man and the fact is in the two years of owning it, I maybe have seen a 5% appreciation in two years (yes, you can still buy an ocean front condo for $30,000 there-- amazing cheap, but it is Colombia). Here in Calif the same money in real-estate would have grown 100%.
Now the DR is sorta like Calif. I'v been coming to the North coast (Puerta Plata, Sosua and Cabarete) for 15 years now and have seen the complete cycle. 15 years ago is was like the South of France, five years ago a real-estate disaster and now a new life. Cabarete has been the driver here and is basically 100% sold out of anything nice. Ocean front condos have doubled in the last year and now it is a nightmare (the traffic and congestion is like Los Angeles at 8. AM) and is a real zoo. I would not live here if you payed me, but fun to visit.
The boom has now hitting Sosua again where some ocean front and hi-end projects were sold out BEFORE they were started. What is Hot is:
1.) Hi-end with appreciation potential
2.) Secure (boy this is important)
3.) Well managed projects (a nightmare if you get into the wrong project)
4.) Good generators with a track history
PLUS they are talking about (three people told me about this) an upscale Golf-Course between Sea-Horse-Ranch and Sosua. WOW, if this goes, look out!
I also know (has been verified) that the owner of E-Bay has outbid Sea-Horse-Ranch for the ocean front property between Sea-Horse and the Breezes Hotel. What's going up, don't know but something big is cooking in the oven.
As for me I have put my penthouse on the market (www.singletravel.com/penthouse) because I'm building a new home. I expect a 30% return on my money in one-year of ownership in CaribeCampo. They have built new penthouses (nothing like mine though) and one is already been sold for $225,000.00. Amazing.
(http://www.caribecampoclub.de/apartments/apartments.htm)
Now one of my better moves (and I'm certainly made many bad ones too) was buying a lot in Sea-Horse -Ranch a few years ago. I've doubled my money. Today the lots are selling for $100.00 a sq meter and they even have sold a non-ocean front house for 1.1 million. Don't believe me, look here.
(http://www.sea-horse-ranch.com/eng/sales.php)
A nice lot there now is $250,000.00 and THEY ARE SOLD OUT!! There are 8 homes being built there now not including mine. The place is going crazy.
What is constant is the cheap labor, so this is the perfect time for me. If you see what Sea Horse rents home for (and mine will be the only hi-tech home there) you see I'll pick up another $75,000.00 a year or so in rents and write it off also form my taxes! Mine will be comparable to #76 as an example
(http://www.sea-horse-ranch.com/eng/rentals_all.php)
You can built a hi-end home for 55$.00 a sq foot and a average home for maybe $25-30.00 a sq foot. Thank good for those Haitian labors. I'm building a 6,000 sq foot home, shit, why not!
Yes the DR is a third world country and does have some problems (well, more than a few) and is not a investment for everyone. But it is:
1.) the cheapest Caribbean property
2.) no hassle buying
3.) cheap living
4.) awesome country to explore and live in
5.) an alternative to some who realize the U.S. might not be the safest or the best place to live anymore (just in case)
I'm told many Americans are now scooping things up and again here is my advice.
A.) Security
B.) Track record
C.) Management
D.) Buy cheap (yes there are some $40,000.00 condos) but you'll get cheap services and little appreciation and poor security. DON'T BE CHEAP!
E.) Quality and location is what is HOT
To give you an example, a real-estate office owner son lived in the Cabarete area called " Pro Cab." It has a gate and a guy who sits there (sometimes) and waves you through without getting up. A few month ago he woke up at 4 AM with a gun at his head (they stole everything). The next week he put his house for sell (and already sold) and moved into his mom's unit in CaribeCampo (great security) and again can sleep at night without nightmares.
Buying a single detached home (means you must deal with your own security, electricity, pool, garden maids who don't show etc.) with moderate security I feel is a mistake. I thing Playa Azul is crazy or anything way up in the hills or any property where everything is up to you. For us gringos it must be turn-key and no problems (reason I bought in CaribeCampo and now Sea-Horse-Ranch).
Going home two days ago, the guy on the plane next to me just bought a NEW unit at Pierre George (guess he is turning the hotel into condos) and a 750 sq foot condo cost him $125,000.00. Shit, I couldn't fit my bed in there but it is a great location and very secure and well run place. You get the idea.
This place (Dominican Republic) is the last great bargain in the Caribbean, If the country ever gets it shit together, well, it will be another St. Marteen, Maui, or like the beach in S. Calif. Just remember, I told you here BUT don't be stupid (do your homework) ....
My recommended brokers are:
Dean at Century 21 (http://www.juanperdomo.com/)
Josefina Covents (http://www.dominican-real-estate.com/)
Bookmarks