Considering first investment property in Puerto Rico

Developer · Member since 2010 · 188 posts · 104 votes

2y

Hi Ryan,

I moved to Puerto Rico in 2020 and I am invested heavily in the market. I started REIA Rico in 2021 and have at least 2 meetings a month for real estate investors.

I'll be honest, what you are seeking is what almost everyone who reaches out from the mainland is seeking. Exactly. 20% down financing for investment property will not be easy but if you have a W-2, maybe it's possible. Not sure. Try to get preapproved from a local loan broker or Co-op. Stay away from the top 2 banks, they can take months to actually finance you and saavy agents wont accept a preapproval from them because they can take forever. Mainland banks can not finance in PR. A few rare exceptions. Finding a condo that allows Airbnb/STR will be challenging, they're rare and cost more because of it. A few years ago sellers weren't accepting offers with financing because there were so many cash buyers. That's probably changed. However, many sellers will not accept an offer subject to an appraisal. That's because the appraisals here are typically horrible. Be prepared to come in with additional cash to close due the the appraisal.

The STR market here has become way more saturated and competitive especially in San Juan. Probably buy during hurricane season (now) to get the best deal. Dec/Jan are peak STR months. Generally all months other than Sep-Nov are profitable.

STR Property management is common and I know a lot of folks doing this. When you are on the island, come to our meetings, you will meet a lot of people / resources there. Good luck.

1 Reply

Jonathan GreeneBusiness Member

Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes

2y

It doesn't make sense as a first investment, especially when your main reason is because you "enjoy speaking Spanish and salsa dancing". There is something to be said for knowing your ideal avatar, but you are taking on a lot more red tape and a lot less learning possibility.

When you are a non-local investing out of your area, you are a mark for every deal out there. If you really wanted to invest there, you would be wise to do 2-4 more times, meet some local investors and out-of-area investors. You seem like you could be sucked into a Puerto Rico investing funnel with the slightest of ease so I would pump the brakes.

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3 Reply

Ryan DeRobertis

OP

Member since 2019 · 12 posts · 2 votes

2y

Hello,

Thank you for the feedback. I definitely have some rose tinted glasses on and am drawn to the idea of 'lifestyle investing' hence why I am trying to get more realistic/experienced advice here.

Kathryn and Jonathan, if I had to summarize your feedback;

-If it seems so great, it will be competitive
-If it is competitive, I am massively disadvantaged not being local/experienced in the market. Also, for every good deal, there could be bad deals others will try to spring on me due to my disadvantage

To that end I have been considering two paths:

A. Rent my house in Philadelphia out, and move to puerto rico as a renter with the goal to buy for myself more so than to rent for short term. My mortgage in Philadelphia is roughly $1400 and similar rentals range from $1900-2200 in my area, so I think I can cashflow it.

B. Abandon the Peurto Rico dream for now and look at more realistic/beginner friendly areas that still sport a large latin influence and strong rentals, like Florida (I've looked a little bit outside Miami..Boca Raton, Tampa, West Palm Beach, etc). Then, rent that property out, or rent my house in Philadelphia and move to Florida.

Thank you for your feedback already, any other advice or guidance you'd share?
----

Also, tangental to this.. I am getting a lot of 'beginner friendly real estate guides/partners' gurus on instagram sending me messages.. It seems like they help you find a deal, work through the process, sometimes property management etc... What exactly is this?

Isn't what they offer the same to what an investor friendly real estate agent would do? Are most of those gurus just selling courses/cutting a fee on top of an agent? I don't mean to discredit them, I am genuinely curious as to their roles/function/incentives.

0 Reply

Ryan DeRobertis

OP

Member since 2019 · 12 posts · 2 votes

2y

Quote from @Kathryn Morea:

Hi Ryan,

I moved to Puerto Rico in 2020 and I am invested heavily in the market. I started REIA Rico in 2021 and have at least 2 meetings a month for real estate investors.

I'll be honest, what you are seeking is what almost everyone who reaches out from the mainland is seeking. Exactly. 20% down financing for investment property will not be easy but if you have a W-2, maybe it's possible. Not sure. Try to get preapproved from a local loan broker or Co-op. Stay away from the top 2 banks, they can take months to actually finance you and saavy agents wont accept a preapproval from them because they can take forever. Mainland banks can not finance in PR. A few rare exceptions. Finding a condo that allows Airbnb/STR will be challenging, they're rare and cost more because of it. A few years ago sellers weren't accepting offers with financing because there were so many cash buyers. That's probably changed. However, many sellers will not accept an offer subject to an appraisal. That's because the appraisals here are typically horrible. Be prepared to come in with additional cash to close due the the appraisal.

The STR market here has become way more saturated and competitive especially in San Juan. Probably buy during hurricane season (now) to get the best deal. Dec/Jan are peak STR months. Generally all months other than Sep-Nov are profitable.

STR Property management is common and I know a lot of folks doing this. When you are on the island, come to our meetings, you will meet a lot of people / resources there. Good luck.

I also plan on visiting PR(san juan for now, maybe ponce as well) in November for fun and to learn more. Regardless of where my investment plans go, I'd be interested in coming to a meet up. Are there any around the second or third weeks of November?

0 Reply

Kathryn Morea

Developer · Member since 2010 · 188 posts · 104 votes

2y

Yes, we meet the 1st Thursday each month for our main evening meeting and we meet the 2nd Saturday each month at 8am for Dealmakers Breakfast Club. I can't post the link here, you can dm me or search online.

0 Reply

Kathryn Morea

Developer · Member since 2010 · 188 posts · 104 votes

2y

Ryan, renting a place in PR to learn the market better sounds like a good idea. Another idea is to partner with someone who is located in PR and better understands the market. But honestly, if you live here, you will understand and be more patient with the investing scenario. Everything takes longer. Labor, supply chain (we are on an island) and red tape: from offers and closing, to funding to permits. Island time is a real thing. And some things that you can get in the mainland are just not available in PR.

If it's so hard, why bother at all? Mostly because the tax incentives are *insanely* good. Not for a single airbnb like you are seeking (you and everyone else) but because if you start a BNB or a guest house or a hotel, you can get 40% of your investment back in the form of a tax CREDIT that you can sell for about 90 cents on the dollar. Read that again. That means an 800K purchase and a 200K rehab (1 million invested) can result in a 400K tax credit that results in 360K CASH back in the pocket of the investor.

And that BNB that just got 40% of their investment back is now competing with you, the small investor with a single condo that you paid full price for with no tax benefit. So yet, there are a lot of fresh units just hitting the market this year and new ones that will hit soon adding to the competition.

So if you want to kill it in the PR market, maybe think bigger. But I recommend you study it much more extensively before diving in. I've been investing since 1989, and PR investing is harder than anything I could have imagined. But it can be profitable.

0 Reply

Marc RiceBusiness Member

Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes

2y

Quote from @Ryan DeRobertis:

I am considering my first rental/vacation property and would like it to be in Puerto Rico for a few reasons:

--
1. I loved it when I went. Amazing beaches, food, nature, culture, etc. I enjoy speaking Spanish and salsa dancing and it is a great location for this.

2. It scores a 100/100 (san juan) on airdna, so it seems to have a strong rental market.

3. $$$ going into the island from the new tax incentives. It's a place to legally go and sell stock/business without capital gains. When those individuals are there for over half the year, it will bring prosperity to the island.

4. Quick/cheap flights from Philadelphia, where my primary residence is.

5. After establishing or continuing it as a rental, I'd like to move there myself for at least half the year.

Question: What are people's general opinion on PR in 2024? Is it still a good investment? Rough for a beginner? Important resources(articles, books, podcasts) to review?

--

Searching properties:

Size: 0-2 bedrooms
Price range: 300k max

I've started looking on clasificados, and trying to determine where to search. I like the idea of san juan, specifically miramar, santurce, or anything 1-2km from the beach with food/entertainment really. Condo or house I am open to either, as long as it can be a reliable rental. I am sure everyone else feels the same though, so if there are any other recommended areas I'm open. Locations that are a 0-1 hour car ride from san juan to a nice town/city with more affordable areas walking distance to the beach would be interesting as well.

Examples:

https://www.clasificadosonline.com/UDRealEstateDetail.asp?ID...

https://www.clasificadosonline.com/UDRealEstateDetail.asp?ID...

Question: What are any issues with the above? Do I at least seem to be picking reasonable properties?

Question: What other areas of puerto rico do people suggest? I really enjoyed san juan, but realize it might be the most competitive area.

--

Financing:

I would like to do 20% down, or more if needed, but I would like to avoid 100% cash offers as it would likely be the majority of my liquid assets.

Question: How does financing differ from the mainland? Am I likely to get a mortgage with a 20% offer or is it too competitive? Can mainland banks be used?

Agents:

I've read/heard that areas are largely represented by specific agents. I tried to get in contact with an agent through BP's find an agent, but the concierge said BP didn't have an agent in the area.

Question: What is a good way to get in contact with an agent who can help me narrow down locations and then focus on finding properties there

Property management:

Seeing as this is my first investment property, I would like to start with property management and learn more as I progress.

Question: Is property management common in PR and are there any recommendations?

___

Thank you in advance for any guidance. I appreciate the podcast and forums here!

PR is great. You can reach out to my lender at First Bank for a great 2nd home loan 10% down. It'll be hard to find a good deal while navigating the lack of MLS/clasificados there.

[email protected]614-363-2787

Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews

Website View Page

0 Reply

Ryan DeRobertis

OP

Member since 2019 · 12 posts · 2 votes

1y

Quote from @Kathryn Morea:

Ryan, renting a place in PR to learn the market better sounds like a good idea. Another idea is to partner with someone who is located in PR and better understands the market. But honestly, if you live here, you will understand and be more patient with the investing scenario. Everything takes longer. Labor, supply chain (we are on an island) and red tape: from offers and closing, to funding to permits. Island time is a real thing. And some things that you can get in the mainland are just not available in PR.

If it's so hard, why bother at all? Mostly because the tax incentives are *insanely* good. Not for a single airbnb like you are seeking (you and everyone else) but because if you start a BNB or a guest house or a hotel, you can get 40% of your investment back in the form of a tax CREDIT that you can sell for about 90 cents on the dollar. Read that again. That means an 800K purchase and a 200K rehab (1 million invested) can result in a 400K tax credit that results in 360K CASH back in the pocket of the investor.

And that BNB that just got 40% of their investment back is now competing with you, the small investor with a single condo that you paid full price for with no tax benefit. So yet, there are a lot of fresh units just hitting the market this year and new ones that will hit soon adding to the competition.

So if you want to kill it in the PR market, maybe think bigger. But I recommend you study it much more extensively before diving in. I've been investing since 1989, and PR investing is harder than anything I could have imagined. But it can be profitable.

Thank you so much for this information. Great context. I had hear the island is massively lacking in hotels so it makes sense there are incentives for developers.

I am working on fixing my house in Philadelphia for rental then will be looking at temporary apartments in PR.

0 Reply

Ryan DeRobertis

OP

Member since 2019 · 12 posts · 2 votes

1y

Quote from @Marc Rice:

Quote from @Ryan DeRobertis:

I am considering my first rental/vacation property and would like it to be in Puerto Rico for a few reasons:

--
1. I loved it when I went. Amazing beaches, food, nature, culture, etc. I enjoy speaking Spanish and salsa dancing and it is a great location for this.

2. It scores a 100/100 (san juan) on airdna, so it seems to have a strong rental market.

3. $$$ going into the island from the new tax incentives. It's a place to legally go and sell stock/business without capital gains. When those individuals are there for over half the year, it will bring prosperity to the island.

4. Quick/cheap flights from Philadelphia, where my primary residence is.

5. After establishing or continuing it as a rental, I'd like to move there myself for at least half the year.

Question: What are people's general opinion on PR in 2024? Is it still a good investment? Rough for a beginner? Important resources(articles, books, podcasts) to review?

--

Searching properties:

Size: 0-2 bedrooms
Price range: 300k max

I've started looking on clasificados, and trying to determine where to search. I like the idea of san juan, specifically miramar, santurce, or anything 1-2km from the beach with food/entertainment really. Condo or house I am open to either, as long as it can be a reliable rental. I am sure everyone else feels the same though, so if there are any other recommended areas I'm open. Locations that are a 0-1 hour car ride from san juan to a nice town/city with more affordable areas walking distance to the beach would be interesting as well.

Examples:

https://www.clasificadosonline.com/UDRealEstateDetail.asp?ID...

https://www.clasificadosonline.com/UDRealEstateDetail.asp?ID...

Question: What are any issues with the above? Do I at least seem to be picking reasonable properties?

Question: What other areas of puerto rico do people suggest? I really enjoyed san juan, but realize it might be the most competitive area.

--

Financing:

I would like to do 20% down, or more if needed, but I would like to avoid 100% cash offers as it would likely be the majority of my liquid assets.

Question: How does financing differ from the mainland? Am I likely to get a mortgage with a 20% offer or is it too competitive? Can mainland banks be used?

Agents:

I've read/heard that areas are largely represented by specific agents. I tried to get in contact with an agent through BP's find an agent, but the concierge said BP didn't have an agent in the area.

Question: What is a good way to get in contact with an agent who can help me narrow down locations and then focus on finding properties there

Property management:

Seeing as this is my first investment property, I would like to start with property management and learn more as I progress.

Question: Is property management common in PR and are there any recommendations?

___

Thank you in advance for any guidance. I appreciate the podcast and forums here!

PR is great. You can reach out to my lender at First Bank for a great 2nd home loan 10% down. It'll be hard to find a good deal while navigating the lack of MLS/clasificados there.

Much appreciation. I am working on making it down there to rent first, learn the market better, and buy accordingly.

0 Reply

Alan AsriantsBusiness Member

Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes

1y

Get to know the area more before investing. This is a good start. The island is not that large so if you target a specific location you like Im sure it wont be too difficult to get to know the ins and outs. Buy when you feel like you really know what is going on in the local market like the back of your hand.

Btw I love PR and definitely going back. Didn't seem to hard to navigate. We had a rental and went around the entire island - took a couple of hours.

You can use some of that Salsa dancing and spanish to help you get more info from locals and professionals lol :)

[email protected]267-767-0111

Alan Asriants - New Century Real Estate 590 Reviews

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0 Reply

Marc RiceBusiness Member

Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes

1y

Quote from @Ryan DeRobertis:

Quote from @Marc Rice:

Quote from @Ryan DeRobertis:

I am considering my first rental/vacation property and would like it to be in Puerto Rico for a few reasons:

--
1. I loved it when I went. Amazing beaches, food, nature, culture, etc. I enjoy speaking Spanish and salsa dancing and it is a great location for this.

2. It scores a 100/100 (san juan) on airdna, so it seems to have a strong rental market.

3. $$$ going into the island from the new tax incentives. It's a place to legally go and sell stock/business without capital gains. When those individuals are there for over half the year, it will bring prosperity to the island.

4. Quick/cheap flights from Philadelphia, where my primary residence is.

5. After establishing or continuing it as a rental, I'd like to move there myself for at least half the year.

Question: What are people's general opinion on PR in 2024? Is it still a good investment? Rough for a beginner? Important resources(articles, books, podcasts) to review?

--

Searching properties:

Size: 0-2 bedrooms
Price range: 300k max

I've started looking on clasificados, and trying to determine where to search. I like the idea of san juan, specifically miramar, santurce, or anything 1-2km from the beach with food/entertainment really. Condo or house I am open to either, as long as it can be a reliable rental. I am sure everyone else feels the same though, so if there are any other recommended areas I'm open. Locations that are a 0-1 hour car ride from san juan to a nice town/city with more affordable areas walking distance to the beach would be interesting as well.

Examples:

https://www.clasificadosonline.com/UDRealEstateDetail.asp?ID...

https://www.clasificadosonline.com/UDRealEstateDetail.asp?ID...

Question: What are any issues with the above? Do I at least seem to be picking reasonable properties?

Question: What other areas of puerto rico do people suggest? I really enjoyed san juan, but realize it might be the most competitive area.

--

Financing:

I would like to do 20% down, or more if needed, but I would like to avoid 100% cash offers as it would likely be the majority of my liquid assets.

Question: How does financing differ from the mainland? Am I likely to get a mortgage with a 20% offer or is it too competitive? Can mainland banks be used?

Agents:

I've read/heard that areas are largely represented by specific agents. I tried to get in contact with an agent through BP's find an agent, but the concierge said BP didn't have an agent in the area.

Question: What is a good way to get in contact with an agent who can help me narrow down locations and then focus on finding properties there

Property management:

Seeing as this is my first investment property, I would like to start with property management and learn more as I progress.

Question: Is property management common in PR and are there any recommendations?

___

Thank you in advance for any guidance. I appreciate the podcast and forums here!

PR is great. You can reach out to my lender at First Bank for a great 2nd home loan 10% down. It'll be hard to find a good deal while navigating the lack of MLS/clasificados there.

Much appreciation. I am working on making it down there to rent first, learn the market better, and buy accordingly.

Sounds smart!

[email protected]614-363-2787

Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews

Website View Page

0 Reply

Edwin Soto

Member since 2024 · 1 post · 0 votes

1y

Quote from @Kathryn Morea:

Hi Ryan,

I moved to Puerto Rico in 2020 and I am invested heavily in the market. I started REIA Rico in 2021 and have at least 2 meetings a month for real estate investors.

I'll be honest, what you are seeking is what almost everyone who reaches out from the mainland is seeking. Exactly. 20% down financing for investment property will not be easy but if you have a W-2, maybe it's possible. Not sure. Try to get preapproved from a local loan broker or Co-op. Stay away from the top 2 banks, they can take months to actually finance you and saavy agents wont accept a preapproval from them because they can take forever. Mainland banks can not finance in PR. A few rare exceptions. Finding a condo that allows Airbnb/STR will be challenging, they're rare and cost more because of it. A few years ago sellers weren't accepting offers with financing because there were so many cash buyers. That's probably changed. However, many sellers will not accept an offer subject to an appraisal. That's because the appraisals here are typically horrible. Be prepared to come in with additional cash to close due the the appraisal.

The STR market here has become way more saturated and competitive especially in San Juan. Probably buy during hurricane season (now) to get the best deal. Dec/Jan are peak STR months. Generally all months other than Sep-Nov are profitable.

STR Property management is common and I know a lot of folks doing this. When you are on the island, come to our meetings, you will meet a lot of people / resources there. Good luck.

Hi Kathryn!

What is REIA, where can I learn more about it and where do Real Estate Investors meet in Puerto Rico? I am interested in meeting people from whom I can learn more about real estate investing.

0 Reply

Kathryn Morea

Developer · Member since 2010 · 188 posts · 104 votes

1y

Quote from @Edwin Soto:

Quote from @Kathryn Morea:

Hi Ryan,

I moved to Puerto Rico in 2020 and I am invested heavily in the market. I started REIA Rico in 2021 and have at least 2 meetings a month for real estate investors.

I'll be honest, what you are seeking is what almost everyone who reaches out from the mainland is seeking. Exactly. 20% down financing for investment property will not be easy but if you have a W-2, maybe it's possible. Not sure. Try to get preapproved from a local loan broker or Co-op. Stay away from the top 2 banks, they can take months to actually finance you and saavy agents wont accept a preapproval from them because they can take forever. Mainland banks can not finance in PR. A few rare exceptions. Finding a condo that allows Airbnb/STR will be challenging, they're rare and cost more because of it. A few years ago sellers weren't accepting offers with financing because there were so many cash buyers. That's probably changed. However, many sellers will not accept an offer subject to an appraisal. That's because the appraisals here are typically horrible. Be prepared to come in with additional cash to close due the the appraisal.

The STR market here has become way more saturated and competitive especially in San Juan. Probably buy during hurricane season (now) to get the best deal. Dec/Jan are peak STR months. Generally all months other than Sep-Nov are profitable.

STR Property management is common and I know a lot of folks doing this. When you are on the island, come to our meetings, you will meet a lot of people / resources there. Good luck.

Hi Kathryn!

What is REIA, where can I learn more about it and where do Real Estate Investors meet in Puerto Rico? I am interested in meeting people from whom I can learn more about real estate investing.

Yes you can check eventbrite and facebook. Or send me a DM and I'll send you the details. Jan 9, 2025 is our next one.

0 Reply

Sara Szo

Member since 2025 · 4 posts · 2 votes

1y

@Ryan DeRobertis Curious to know if you made it down to PR and what you may have learned since this was originally posted. I've been looking into the same thing and @Kathryn Morea information here has been really helpful (Thank you!)

I definitely understand everyone else's practical advice regarding "lifestyle investments" but also think there is something to be said about following what lights a fire for you!

0 Reply

Considering first investment property in Puerto Rico

Considering first investment property in Puerto Rico

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