14 property tips for foreigners in the Dominican Republic

Authored by the expert who managed and guided the team behind the Dominican Republic Property Pack

Everything you need to know before buying real estate is included in our The Dominican Republic Property Pack

Are you considering investing in a tropical paradise? Wondering what legal steps you need to take as a foreigner? Curious about the financial implications and opportunities in the Dominican Republic's real estate market?

We will lay down recent insights. Ici no guesswork, we rely only on solid data.

Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Dominican Republic Property Pack

This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.

1) You must demand sellers cover lawyer and notary fees—negotiate fiercely before sealing the deal!

When buying property in the Dominican Republic, local sellers often expect buyers to cover lawyer and notary fees.

These fees are part of the typical closing costs, which can range from 4% to 10% of the property's value. This includes transfer taxes, attorney fees, and notary fees. It's a common practice, so be ready to discuss these costs before sealing the deal.

In recent years, many expatriates and foreign buyers have shared that they were expected to pay these fees. Guides and articles consistently advise buyers to negotiate these costs before finalizing any purchase. Real estate agencies and legal experts in the Dominican Republic echo this advice.

Online forums and communities are buzzing with shared experiences, where buyers emphasize the importance of negotiating these fees. Cultural norms in the Dominican Republic highlight the need for transparency and negotiation, so understanding and discussing these costs upfront is crucial.

Many buyers have found that negotiating these fees can lead to significant savings. It's not uncommon for sellers to be open to discussions, especially if you show awareness of the local customs and practices.

Remember, the key is to be informed and proactive. Approaching the deal with knowledge and confidence can make a big difference in your buying experience.

Sources: International Living, Cana Law

2) You can unlock massive cash flow with Airbnb in Dominican beach hotspots loved by global tourists

In the Dominican Republic, short-term rentals like Airbnb are booming, especially in popular beach destinations.

In 2023 and 2024, the country saw a record-breaking influx of over one million international tourists in just three months. This surge has driven up demand for accommodations, making short-term rentals a lucrative opportunity for property owners.

Take Santo Domingo, for example. Here, a typical Airbnb listing is booked for 197 nights a year with a median occupancy rate of 54%. Hosts earn an average of $62 per night, which adds up to a nice annual income.

Meanwhile, in Puerto Plata, the average nightly rate is higher at $132, though the occupancy rate is a bit lower at 33%. Still, these numbers show that short-term rentals can be quite profitable, especially during peak tourist seasons.

The tourism industry in the Dominican Republic is a big deal, fueling the local economy with jobs and foreign currency. Vacation rentals are becoming more popular than traditional hotels, with Airbnb capturing nearly 60% of the lodging room supply.

This shift in consumer preferences suggests that the short-term rental market has plenty of room for growth. It's an exciting time for property investors looking to tap into this trend.

Sources: Airbtics, Dominican Today, Dominican Today

Everything you need to know is included in our Real Estate Pack for The Dominican Republic

3) You will go up your success by targeting luxury golf communities, attracting wealthy seasonal visitors eager to invest

Investing in niche markets like luxury golf communities can boost your success, especially in the Dominican Republic.

The luxury real estate market here is thriving, with an annual growth rate of 2.74% expected from 2024 to 2028. This boom is set to push the market to around $795.70 billion by 2028, showing a strong appetite for high-end properties.

Communities like the Coral Golf Resort in Punta Cana and Cap Cana are prime examples of this trend. They offer high-end amenities and draw in significant investments, appealing to wealthy buyers seeking exclusive experiences.

The Dominican Republic's tourism industry is also on the rise, thanks to economic stability and a welcoming investment climate. Golf tourism plays a big role here, with the global market expected to grow at a CAGR of 7.4% from 2024 to 2032.

This growth aligns with the spending habits of affluent tourists who are eager to invest in luxury amenities and experiences. The appeal of these golf communities is undeniable, attracting those who value exclusivity and high-end living.

By focusing on these niche markets, you tap into a lucrative segment that caters to the desires of wealthy seasonal visitors. The combination of luxury and leisure in these communities makes them a magnet for investment.

Sources: The Agency DR, Dominican Today, Globe Newswire

4) You must know foreign buyers face limited local bank financing, so bringing your own capital is crucial for success

Buying property in the Dominican Republic as a foreigner can be tricky, especially when it comes to financing.

Back in 2023 and 2024, foreign buyers often struggled to get loans from local banks. The main issue was that only a few banks offered mortgages to foreigners, making it tough to find good financing options.

Interest rates for foreigners were also a hurdle, as they were higher than those for locals, ranging from 8% to 13%. This meant borrowing money was more expensive for non-residents. Plus, banks had stricter lending criteria for foreigners, demanding large down payments and lots of paperwork, which was a challenge for many.

Another obstacle was the loan-to-value ratios, which were lower for foreign buyers, typically between 50% to 70%. This required foreigners to put down more money upfront. Real estate agents and expat communities often highlighted these issues, stressing the importance of bringing your own capital.

In the Dominican Republic, it's common knowledge that foreign buyers have fewer financing options from local banks. This makes having your own funds crucial for purchasing property.

Sources: DR Properties, Dominican Today, Kredium

5) Unlock massive ROI with tax-exempt condos in new Dominican Republic developments—worth every extra penny!

In the Dominican Republic, new development condos are pricier than older ones, especially in 2023 and 2024.

Imagine a beachfront condo in a new development; it might set you back between $500,000 and $1 million. Meanwhile, older properties in the same area could be as low as $200,000 to $400,000. But here's the kicker: these new condos often come with perks that make them worth the extra cash.

Thanks to the Confotur Law, new condos can enjoy tax exemptions that older properties don't. This law offers a break from the annual 1% Real Estate Property Tax (IPI) for up to 15 years. So, if you were looking at a $5,000 annual tax, you could save a whopping $75,000 over those 15 years.

These tax breaks can really boost your return on investment (ROI). Without them, you might expect a 5% annual ROI. But with the 15-year exemption, your effective ROI could jump to 7% or more. That's a big deal, making new developments a hot ticket for investors.

For foreign and non-resident investors, these tax benefits are especially appealing. They not only save money but also make the investment more lucrative in the long run. This trend is drawing more international buyers to the Dominican Republic's real estate market.

Sources: Understanding the CONFOTUR Law and its Benefits for Foreign and Non-Resident Real Estate Investors, Dominican Republic Property Prices Will Rise in 2025

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6) You should know that new roads and airports will go up tenant demand and boost your investment returns

Focusing on areas with growing infrastructure projects can be a smart move for attracting more tenants.

In recent years, the Dominican Republic has been pouring money into infrastructure, with CAD 2.14 billion invested in 2022. This hefty investment shows the government's dedication to improving the country's infrastructure, which is crucial for economic growth. The construction of new roads and airports is not just about convenience; it's about boosting property values and making areas more appealing to potential tenants.

Take Pedernales, for example. The government plans to build an international airport there, aiming to turn it into a major tourist hotspot. This kind of development can significantly increase property values and attract more tourists, which means more people looking to rent. It's a win-win for property investors.

Transportation is another big factor. The National Road Infrastructure Connectivity and Transformation Plan is set to make a real difference by reducing traffic congestion and improving access. Better roads mean easier commutes, and that's something tenants really value. Surveys show that people prefer properties with good transportation links, so areas with upgraded infrastructure are likely to see a rise in rental demand.

Improved infrastructure doesn't just make life easier; it makes properties more attractive. When roads and airports get a facelift, it draws in more tenants and tourists, boosting the local economy. This is especially true in areas where the government is actively investing in infrastructure projects.

So, if you're thinking about buying property in the Dominican Republic, keep an eye on areas with ongoing infrastructure projects. These are the places where you'll likely see the most growth and demand. The government's commitment to these projects is a clear signal that they're serious about making the country more accessible and appealing.

Sources: Trade Commissioner Service, World Bank, GlobeNewswire

7) You must master currency exchange rates, as wild fluctuations will dramatically impact your investment

Investing in the Dominican Republic means keeping a close eye on currency exchange rates.

In 2024, the exchange rate between the US Dollar and the Dominican Peso saw some wild swings, with the highest rate hitting 60.751 DOP and the lowest at 58.894 DOP. This kind of fluctuation can really shake up the cost of buying property. Imagine a property priced at 10 million DOP in 2023; if the peso strengthens, that same property could cost you more in 2024.

On the flip side, if the peso weakens, it might make Dominican products more appealing on the global stage, which is great news for investors in manufacturing or agriculture. The Dominican Peso is a free-floating currency, meaning its value can shift due to factors like inflation and interest rates.

This introduces some risk for foreign investors, as these economic changes can affect the value of their investments. The Central Bank of the Dominican Republic is actively trying to manage this by tweaking its monetary policy and stepping in when needed to stabilize the market.

For anyone looking to invest, understanding these dynamics is key. You’ll need to stay informed about how these fluctuations might impact your investment, especially if you’re eyeing property in the country.

Sources: Exchange Rates, One Money Way, IMF eLibrary

8) You will discover pre-construction deals in Punta Cana's hotspots can boost your returns compared to buying completed units

Investing in pre-construction properties in tourist hotspots like Punta Cana can often yield better returns than buying completed units.

In recent years, Punta Cana's real estate market has been buzzing with activity. In 2023 and 2024, housing prices saw a notable increase, with apartments rising by 7% and houses by 5%. This surge is largely due to the rising property values and the strong demand for new developments in the area.

Looking ahead to 2025, the trend is expected to continue. Property prices are projected to rise by 3% to 7%, driven by the allure of luxury resorts and prime properties near the airport. Pre-construction properties often come with perks like tax exemptions and other incentives, which can significantly boost their value once completed.

Investors eyeing pre-construction developments in Punta Cana can anticipate a projected ROI of 11%, which is higher than the average ROI for completed units. This is largely due to the potential for capital gains and rental income from properties located in prime tourist areas.

The demand for new developments remains strong, fueled by the need for modern amenities and sustainable living options. Punta Cana's appeal as a tourist destination ensures a steady influx of visitors, making it an attractive spot for real estate investment.

Sources: BiggerPockets, Live and Invest Overseas, The Agency DR

Everything you need to know is included in our Property Pack for The Dominican Republic

9) Unlock massive returns by renovating older Dominican properties—labor and materials are cheaper than in neighboring countries!

Renovating older properties in the Dominican Republic is a smart move because labor costs are lower than in many neighboring countries.

In 2023 and 2024, labor costs in the Dominican Republic ranged from $4 to $6 per hour, while in Jamaica, they were between $5 and $8 per hour, and in the Bahamas, they ranged from $7 to $10 per hour. This makes hiring local workers more affordable, which is a big plus for anyone looking to invest in property renovations.

Construction materials are also cheaper here. For instance, concrete, a staple in building projects, costs between $90 and $100 per cubic meter. This affordability is a boon for those wanting to renovate without overspending.

Overall construction costs per square meter are another area where the Dominican Republic shines. In 2023 and 2024, these costs ranged from $800 to $1,200 per square meter, compared to Jamaica's $1,000 to $1,500 and the Bahamas' $1,500 to $2,000. This means you can stretch your budget further and potentially see better returns.

With these lower costs, you can focus on enhancing the charm of older properties, which often have unique architectural features. This not only preserves the cultural heritage but also increases the property's value.

Investing in the Dominican Republic offers a unique opportunity to capitalize on cost-effective renovations while enjoying the island's vibrant culture and beautiful landscapes.

Sources: Cost Comparison Studies, Rental Yields and Market Conditions, Branded Private Residences

10) You’ll find beachfront homes command top tourist rents but demand extra upkeep from relentless saltwater corrosion

Beachfront homes in the Dominican Republic are incredibly popular among tourists these days.

Imagine waking up to the sound of waves and having direct access to the beach—it's no wonder these properties are in high demand, leading to premium rental prices. With the recent surge in tourism, more people are flocking to the Dominican Republic, making these homes even more sought after.

Investors are particularly interested because of the high rental yields these properties offer. In places like Playa Nueva Romana and Las Terrenas, annual yields can range from 6.2% to 8.9%, making them a lucrative option. This means property owners can earn substantial income, which is a big draw for those looking to tap into the booming tourism industry.

But owning a beachfront property isn't all sunshine and rainbows. The ocean's proximity means these homes face constant exposure to saltwater, which can be quite corrosive. Saltwater contains elements like magnesium chloride and sulfate ions that can damage concrete and metal structures, leading to frequent repairs.

Local real estate agents and property management companies often emphasize the importance of regular maintenance to combat saltwater corrosion. They know that keeping up with repairs is crucial to maintaining the property's value over time.

So, while beachfront homes can be a great investment, it's essential to be aware of the upkeep involved. The allure of premium tourist rents is undeniable, but the need for regular maintenance is a reality that comes with the territory.

Sources: Travel Daily News, Pond Armor, The Agency DR

11) You can unlock insider secrets from local expats on top-notch lawyers, contractors, and inspectors

In the Dominican Republic, expat communities are a goldmine for property buyers.

These groups are buzzing with tips on finding trustworthy lawyers, contractors, and inspectors. Expats love to share their stories and advice on forums and social media, making it easy for newcomers to tap into this wealth of knowledge. You'll often find detailed accounts of property buying adventures in blog posts, where the importance of community advice is front and center.

According to the Expat Insider 2024 report, expat communities play a crucial role in navigating local bureaucracy. Many expats who have successfully bought property say that community advice was a game-changer. Events and meetups often feature workshops where property tips are shared, showing just how active these communities are in offering support.

Social media is alive with chatter about property buying in expat groups, showing high engagement and information exchange. Reviews and ratings on expat platforms back up the reliability of recommended service providers. Plus, collaborations between expat groups and local businesses are common, offering services tailored to foreign buyers and highlighting the benefits of expat referrals.

Local expat communities often share insider tips on reputable lawyers, contractors, and inspectors. This sharing of information is often documented in articles and blog posts by expats, which detail their property buying journeys and highlight the crucial role of community advice.

Surveys and studies, such as the Expat Insider 2024 report, emphasize the supportive role of expat communities in helping newcomers navigate local bureaucracy and find reliable service providers. Interviews with expats who have successfully navigated the property buying process further illustrate the benefits of seeking advice from these communities.

Sources: The Latinvestor, Internations

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12) You must exercise extreme caution with agricultural land deals

In the Dominican Republic, land ownership in rural areas has been a tangled issue for years.

Back in the mid-1980s, peasants began seizing land, leading to a situation where many land titles are incomplete or contested. Fast forward to 2012, and only about a quarter of rural land was officially registered, leaving a lot of agricultural land with murky ownership. This lack of clarity has resulted in numerous legal battles, with many locals lacking formal rights to their land.

The State Lands Titling Commission was set up to tackle these issues, but by 2012, they had only managed to title a small fraction of properties. This shows the ongoing challenges in sorting out land ownership. Real estate experts and local lawyers stress the need for thorough due diligence when buying agricultural land. They advise potential buyers to check the legitimacy and completeness of land titles to avoid future disputes.

Media reports and studies on historical land reforms highlight the complexity and contested nature of land ownership in the region. This is especially true for agricultural land deals, where older titles can be incomplete or contested. Buyers need to be extra cautious and ensure they have all the necessary information before making a purchase.

In the Dominican Republic, the process of acquiring land can be tricky, especially in rural areas. It's crucial to work with knowledgeable professionals who understand the local landscape and can guide you through the process. This insider knowledge can be invaluable in navigating the complexities of land ownership in the country.

For those considering buying property in the Dominican Republic, understanding the historical context of land ownership is essential. The challenges faced in the past continue to impact the present, making it important to approach land deals with caution and due diligence.

Sources: Land Links, USDA

13) You must seize the Confotur program for incredible tax breaks on tourism-related real estate investments

Thinking about investing in the Dominican Republic? The Confotur program could be your golden ticket.

This program has been a game-changer, especially for luxury tourism and residential projects. Since 2023, there's been a noticeable uptick in approved projects, drawing in international clients and speeding up large-scale developments.

One of the biggest perks? Tax savings. You could dodge real estate property tax for up to 10 years, skip customs duties, and avoid transfer tax. Plus, rental income might be tax-free for a decade, potentially saving you up to 20% on taxable income.

The Confotur program isn't just about tax breaks; it's also a major economic booster. It's helped the Dominican Republic become the seventh-largest economy in Latin America, fueling growth in the tourism sector and creating jobs.

Real estate experts love Confotur for its streamlined investment process and the way it enhances profitability. It's a win-win for investors looking to make a smart move in the Caribbean.

Sources: ICLG, Dominican Today, Realtor DR

14) You gain massive negotiating power by walking away from deals, as sellers often inflate prices to start!

The real estate market in the Dominican Republic has been quite dynamic in recent years, especially in 2023 and 2024.

During the first half of 2023, the pace of real estate sales slowed significantly, which means sellers might be more open to negotiating prices. With fewer buyers competing, you have a better chance to strike a good deal.

It's common for sellers in the Dominican Republic to start with inflated prices. For instance, apartment prices jumped 7% and house prices rose 5% last year. This gives you room to negotiate, as initial prices are often higher than what buyers are willing to pay.

Real estate agents have noticed that buyers willing to walk away often secure better prices. Sellers, especially those with properties priced between 8 and 15 million pesos, may be more flexible to ensure a sale.

Many properties stay on the market for a long time, which can increase seller motivation to negotiate. This is particularly true for properties in popular areas where competition among sellers is high.

Understanding these dynamics can give you an edge. If you're ready to walk away, you'll have more negotiating power, as sellers often start with inflated prices.

Sources: Dominican Today, Simply Dominican, The Latinvestor