ARBNB in Punta Cana, Dominican Republic.
Orange CT · Member since 2016 · 105 posts · 25 votes
Hey guys,
Im buying a condo in Punta Cana in area nearby "EL Cortecito" 5 min walking from the beach. I have my whole portfolio in CT and would like to expand markets. Im from Santo Domingo but I have lived in CT since 2012. This condo will also be used by my family and myself as well.
Does anybody wants to share their experience owning a condo in PUNTA CANA, Dominican Republic and rent it out thru ARBNB , other short term rental platform or with a property manager?
Any tips on filling Vacancies, Arbnb experience, high or low rental season strategy? Any advice will be highly appreciated.
Following this… I own in Puerto Plata (north coast of Dominican Republic) and it’s great thus far. Been in the market 18 months at this point. Starting ‘23 strong, already booked solid through March. https://www.airbnb.com/h/casac...
You're very good at promoting your beautiful country and, anyway, as a local real estate agent, we would expect you to be positive because, if you aren't, who will?
I was just pointing out that I know plenty of people who have been to Punta Cana, including myself, and all of us have been in an all-inclusive resort and not in an Airbnb. None of us, including the many people I've met there have done cultural excursions or gone there for the local food. We've just been there for the beach, the food and resting at the resort. Granted, that's not a representative sample but I bet that's what most visitors do.
A few points regarding what you mentioned:
1. They guarantee 60% occupancy. For how long? I know large and (until then) reputable developers who have done that and then, when occupancy was below the level, they unilaterally cancel the guarantee. Nothing the owners could do. Then, you generally have to pay hefty management fees, whereby your returns oftentimes end up being less that what you can get in your home country. So why taking the risk?
2. 0% interest rate. For how long? They probably include the interest costs in the price, like the US homebuilders do with the rate buy downs. Anyway that 0% could be great if the deal is good but it doesn't made a bad deal good.
3. The tax exemption benefits are useless to most of us foreign buyers and a pure marketing tool used by the local developers. Indeed, we are taxed in our home country on our worldwide income and capital gains. So, anything we don't have to pay to the Dominican Republic tax authorities (the tax exemptions), we have to pay them to our home tax authorities because those exemptions don't apply. Local developers who market that benefit won't tell you that.
Also, I regularly see ads for large new condo developments so, if I was a buyer, I'd be concerned about overbuilding, especially given my previous remark. We have seen that movie elsewhere.
Finally, yes the Dominican Republic has it all indeed but, sadly, that includes sargassum, especially Punta Cana. We haven't found any solution to that problem. If it gets worse, which it could given that the assumed reasons are pollution and global warming, it could eventually wreak havoc on the country's tourism industry, especially Punta Cana. I know people who have been there when the beach was covered by that stinking toxic algae and they mentioned they'll never go back because of it.
To conclude, it's great that people here have different opinions. It makes for a good debate and that's what creates a market between buyers and sellers. Investing in Punta Cana might be right for the right kind of buyers (like maybe lifestyle buyers interested in getting a little bit of extra income) but they should make sure they know what they're getting into and don't look at the opportunity with rose-tinted glasses
I wouldn't give investing advice to investors in my own country so I certainly wouldn't do it give advice to investors in a country where I haven't invested, as you rightly mentioned.
Mind you, I was actually considering investing there, as I have friends who are in real estate there. I did an extensive research trip that included meetings at the Ministry of Tourism in Santo Domingo, with your country's best lawyers, ... So, I'm not sure I should "better" investigate.
Weighing the pros and cons, I decided not to invest. That doesn't mean that it's no good for somebody else. We all have different motivations and objectives, hence I don't like to give advice, especially unsolicited advice.
As to the occupancy guarantee, what I meant is that a guarantee is as good as its issuer. And I know of developers who have reneged on that kind of guarantee once the promised occupancy wasn't reached so it's not as ironclad as a government or bank guarantee. That doesn't mean the specific guarantee you're talking about won't be honoured but it's a risk. Besides I bet this guarantee is for a limited time (it's often for one year only), whereby the profit the developer makes on the sale of the properties is much bigger than the potential loss he would incur should the occupancy fall short of the promised percentage. This would make such a guarantee pretty much worthless as an indicator of the future occupancy rate.
Also, I'd personally never buy properties with hotel management for reasons I already mentioned but I'm sure some investors like and look for that kind of properties.
While there is only one set of facts, we can have different opinions and it's good that way. I'm not trying to convince you or anyone else that investing in Punta Cana is a bad idea. It could be a great idea for the right investors. I'm just sharing facts and points of view and I trust that it'll help readers form their own opinion and make the right decisions for themselves.
Reading this thread has been very insightful. Does anyone have the latest updates on investing in Punta Cana? I'm particularly interested in hearing from those who have started doing short-term rentals and can share their experiences.
Reading this thread has been very insightful. Does anyone have the latest updates on investing in Punta Cana? I'm particularly interested in hearing from those who have started doing short-term rentals and can share their experiences.
I wouldn't give investing advice to investors in my own country so I certainly wouldn't do it give advice to investors in a country where I haven't invested, as you rightly mentioned.
Mind you, I was actually considering investing there, as I have friends who are in real estate there. I did an extensive research trip that included meetings at the Ministry of Tourism in Santo Domingo, with your country's best lawyers, ... So, I'm not sure I should "better" investigate.
Weighing the pros and cons, I decided not to invest. That doesn't mean that it's no good for somebody else. We all have different motivations and objectives, hence I don't like to give advice, especially unsolicited advice.
As to the occupancy guarantee, what I meant is that a guarantee is as good as its issuer. And I know of developers who have reneged on that kind of guarantee once the promised occupancy wasn't reached so it's not as ironclad as a government or bank guarantee. That doesn't mean the specific guarantee you're talking about won't be honoured but it's a risk. Besides I bet this guarantee is for a limited time (it's often for one year only), whereby the profit the developer makes on the sale of the properties is much bigger than the potential loss he would incur should the occupancy fall short of the promised percentage. This would make such a guarantee pretty much worthless as an indicator of the future occupancy rate.
Also, I'd personally never buy properties with hotel management for reasons I already mentioned but I'm sure some investors like and look for that kind of properties.
While there is only one set of facts, we can have different opinions and it's good that way. I'm not trying to convince you or anyone else that investing in Punta Cana is a bad idea. It could be a great idea for the right investors. I'm just sharing facts and points of view and I trust that it'll help readers form their own opinion and make the right decisions for themselves.
I wouldn't give investing advice to investors in my own country so I certainly wouldn't do it give advice to investors in a country where I haven't invested, as you rightly mentioned.
Mind you, I was actually considering investing there, as I have friends who are in real estate there. I did an extensive research trip that included meetings at the Ministry of Tourism in Santo Domingo, with your country's best lawyers, ... So, I'm not sure I should "better" investigate.
Weighing the pros and cons, I decided not to invest. That doesn't mean that it's no good for somebody else. We all have different motivations and objectives, hence I don't like to give advice, especially unsolicited advice.
As to the occupancy guarantee, what I meant is that a guarantee is as good as its issuer. And I know of developers who have reneged on that kind of guarantee once the promised occupancy wasn't reached so it's not as ironclad as a government or bank guarantee. That doesn't mean the specific guarantee you're talking about won't be honoured but it's a risk. Besides I bet this guarantee is for a limited time (it's often for one year only), whereby the profit the developer makes on the sale of the properties is much bigger than the potential loss he would incur should the occupancy fall short of the promised percentage. This would make such a guarantee pretty much worthless as an indicator of the future occupancy rate.
Also, I'd personally never buy properties with hotel management for reasons I already mentioned but I'm sure some investors like and look for that kind of properties.
While there is only one set of facts, we can have different opinions and it's good that way. I'm not trying to convince you or anyone else that investing in Punta Cana is a bad idea. It could be a great idea for the right investors. I'm just sharing facts and points of view and I trust that it'll help readers form their own opinion and make the right decisions for themselves.
I have experienced buying the next:
-lots
-apartment doing BRRRR
-Flipping in USA and DR
-Long-term and short term
-we have about 20 units long long-term rental
And now we are building 35 more units apartments 1bed 1 bath for long-term rental (we earn the equity of the construction and with our analysis the CCROI 19% a year after all the expenses been paid)
and developing 15 units close to the beach to sell
So if you just asked me about a short-term term I only will talk about short-term but if you ask me about the other above I will give you my experience for free I have property in the USA and I don't get the same amount of ROI than in DR ask me and I will answer you
I wouldn't give investing advice to investors in my own country so I certainly wouldn't do it give advice to investors in a country where I haven't invested, as you rightly mentioned.
Mind you, I was actually considering investing there, as I have friends who are in real estate there. I did an extensive research trip that included meetings at the Ministry of Tourism in Santo Domingo, with your country's best lawyers, ... So, I'm not sure I should "better" investigate.
Weighing the pros and cons, I decided not to invest. That doesn't mean that it's no good for somebody else. We all have different motivations and objectives, hence I don't like to give advice, especially unsolicited advice.
As to the occupancy guarantee, what I meant is that a guarantee is as good as its issuer. And I know of developers who have reneged on that kind of guarantee once the promised occupancy wasn't reached so it's not as ironclad as a government or bank guarantee. That doesn't mean the specific guarantee you're talking about won't be honoured but it's a risk. Besides I bet this guarantee is for a limited time (it's often for one year only), whereby the profit the developer makes on the sale of the properties is much bigger than the potential loss he would incur should the occupancy fall short of the promised percentage. This would make such a guarantee pretty much worthless as an indicator of the future occupancy rate.
Also, I'd personally never buy properties with hotel management for reasons I already mentioned but I'm sure some investors like and look for that kind of properties.
While there is only one set of facts, we can have different opinions and it's good that way. I'm not trying to convince you or anyone else that investing in Punta Cana is a bad idea. It could be a great idea for the right investors. I'm just sharing facts and points of view and I trust that it'll help readers form their own opinion and make the right decisions for themselves.
I have experienced buying the next:
-lots
-apartment doing BRRRR
-Flipping in USA and DR
-Long-term and short term
-we have about 20 units long long-term rental
And now we are building 35 more units apartments 1bed 1 bath for long-term rental (we earn the equity of the construction and with our analysis the CCROI 19% a year after all the expenses been paid)
and developing 15 units close to the beach to sell
So if you just asked me about a short-term term I only will talk about short-term but if you ask me about the other above I will give you my experience for free I have property in the USA and I don't get the same amount of ROI than in DR ask me and I will answer you
I'm not sure what you what kind of long term you mean (renting by the year to the local population or by the month to visitors for example). In any case, I wouldn't because it's riskier and potentially much less profitable than short-term rentals. The problem with those anywhere in the Caribbean is the sargassum risk. I can get better returns elsewhere without having to take that risk, which for me is a deal breaker.
I'm not sure what you what kind of long term you mean (renting by the year to the local population or by the month to visitors for example). In any case, I wouldn't because it's riskier and potentially much less profitable than short-term rentals. The problem with those anywhere in the Caribbean is the sargassum risk. I can get better returns elsewhere without having to take that risk, which for me is a deal breaker.
Understandable
In your point of view, you think that could be riskier due the sargassum and that is ok, people don't stop to visit and do tourism in the Dominican Republic because the sargassum. that's natural and sargassum come every year per 2-3 month
But if you are open to see a different way to make money I will be glad to help you or show you cause as I mentioned before I work in real estate full time. I am not only a realtor guy. My partners and I, we are developers (for properties on sale and also long term rentals) I've been doing short term but as I told you if you consider short therm rental is not good for you probably you can change the niche and make money
I don't know how many years you have without visiting the DR but one thing I can tell you the same property you visited on that time now probably cost the double or are in the way to cost that.
If you want, one day we can talk about:
-Multifamily
-Condos
-Lots
or even development projects like us or maybe with us how knows.
If you are completely sure that short term rentals don't work for you. So consider to change the niche and in that way we can find great deals.
I am open to help you and run the numbers.