Buying Foreign Property:
No matter where you are considering buying a foreign holiday home, investment property or temporary retirement home, there are some universal points to consider. While we sell condos and villas in the lovely Dominican Republic, the following points are good ones to consider no matter where you are considering buying:
The Dominican Republic offers an excellent balance of weather, services, community, etc., but also incorporates the following, which are key:
- Security: 95% of our clients will never make the DR their permanent home. Even if this is their home base, they will keep property in Canada or the US. We all have families that we will visit periodically and many go home from May through October. Any property has to have good security and a management company that looks after it in your absence. This includes housekeeping, gardening / pool care, general maintenance, bill payments, etc. You know how it is, the second you go on holidays, that's when something goes wrong with your house. Both condos and houses should have this services – we call it "lock up and leave".
- Rental management: Most of our clients are using their properties to generate income or at least pay for themselves when they are not using them. This is a wonderful thing and helps make foreign property possible. Choose a country that has a great tourist market, that way you can be ensured of holiday renters, who pay hotel rates per night to rent your place. Also choose a subdivision that handles it all for you. Make sure they have international marketing of the rental units and ask to see actual numbers of rental income versus expenses before you buy. Some of our developers actually offer a rental guarantee. The DR is the # 1 Caribbean tourist area, so we enjoy 60-85% yearly occupancy rates. When we did our initial research on where to buy, this was a big factor. Belize, Costa Rica, etc. could not boast these numbers. If you want to rent, this is really important.
- Government: Ensure that the government is very tied to the US and Canada via free trade agreements, investment, etc. This ensures that it will continue to develop for its people and will maintain a solid democracy. Research corruption. Some countries are pretty scary investments due to the government and drug trade. Ensure the government is foreign investment friendly, there are no restrictions on living there (strange visa requirements), and that your property is registered to you.
- Titles: As above, do not buy if it is in a bank trust, a life lease, etc. Ask if your title is in your name and registered to you. Make sure your lawyer speaks English and ask to see an English version of your contract. Find a reputable realtor who understands the market you are coming from. Sometimes terminology is different and can be confusing. Just a little example: what Americans call an escrow account, Candians call a trust account. If you say escrow to a Canadian, they just look at you like "huh?"
- Community: If you plan to spend any amounts of time in the country you choose, and just use the property as an investment, ensure there is a large community of like minded people. The beach is great, and weather is wonderful, but you will get lonely. As an example, my husband likes to watch hockey (we are Canadian), so he goes to one of the local bars during play offs and watches it on the big screen with 20 other Canadian and American guys. Women specifically need to have a community of other women that they can be friends with, or life can be lonely. Where we live, there are so many people from Canada and the US, that it makes it really easy. Even if people come and go, they are welcome to join in the community at bbq's, events, etc. Also, when you have a large community, it makes adjustment to the area easier, you learn where to shop, buy furniture, etc.
- Medical: Ensure there is excellent medical services close by. As we get older, this becomes more important.
- Taxes: Make sure your new country is not planning on taxing the heck out of you. Check on property taxes, inheritance taxes, etc.
- Distance to Airport: I keep hearing about people in Costa Rica that land and then have a three hour drive to their property. Besides being a painful process, this will be very difficult to sell later.
- Resale: See how long property is sitting on the market. The whole world had an economic downturn last year, but if traditionally properties take 2 years to sell, that's a problem.
- The Builder: Do some serious research on who is doing the building. Do they have experience in that country? Do they have enough money to finish without presales ? In some of these countries, anyone can be a builder.
- Safety: Check out crime stats and talk to other buyers. Make sure it's safe to walk down the street in the middle of the night. If there are bars on all the windows, then do not buy there.
Foreign investment only has to be frightening if do not do research. Talk to others that have purchased and discussed their experience. Rent for a month and live like a resident, not a tourist.