A real property is not an asset if it doesn’t put money into your pocket, but takes from it, which makes it a liability. Yes, real estate can generate a stable and reliable passive income; it serves as a valuable addition to your nest egg, but if you don’t do it the right way, you’re missing its full potential to generate vast wealth.
Real estate can be a sturdy buffer
All types of investments are vulnerable to economic downturns brought about by catastrophic financial crisis which affects not only the country’s fiscal status but the international market as well. To avoid huge losses, every wise investor creates a buffer system to withstand financial adversities due to economic meltdown, regulatory changes and natural disasters; in addition to personal issues that may affect one’s nest egg. One way to do this is to diversify your investments and ensure that real estate enjoys the warmth of your nest.
Buying a real estate overseas reduces the vulnerability of investments because it prevents or mitigates the impact and the effects of losing some aspects of your nest egg. For example, you can lose stocks overnight, but a condominium unit of Real Caribe with sophisticated amenities in one of the hottest economic and tourist spots in Dominican Republic, like Sto. Domingo will stay untouched. It is tangible, it stays where it is, and you can count on it when you need cash.
How do you respond to sudden events in your life that have relative effects on your finances? Do you opt for survival mode, or the damage control approach? Immediately following sudden monetary disasters when exceptional measures have to be taken to save your assets, business or people in your life, your passive income from real estate or its lease or purchase price can help you meet your monetary needs. It serves as your emergency protection.
Immediately after a financial loss, investors know that there are operations and decisions that must be taken with an end view of restoring a stricken nest egg to its former glory, while going forward and facilitating the necessary adjustment to the changes caused by your losses. You can use your real estate property to facilitate the immediate restoration of your monetary status to normal conditions, either through selling it or optimizing your passive income from your property.
Here are factors to consider when buying a property in developing-world real estate markets…
Internal factors in the housing sectors: Availability of land, residential construction sector conditions, and mortgage financing availability determine the supply and demand of real estate properties in a certain country; as well as the affordability and availability of houses.
Cities in the Dominican Republic for instance, has a growth rate of 3.0% per annum which means that the population and the demands for houses are likely to double in the next twenty years. Consequently, the Dominican cities are now preparing to expand their urban growth ring and to urbanize an average of 1,400 hectares of its territorial jurisdiction every year. Moreover, mortgage financing in Dominican Republic is stable and has survived the bustles in the regional and international market. While housing in the country are relatively inexpensive, the demands for the finest homes in the economic district of Sto. Domingo could skyrocket the rental and purchase prices of homes in the coming years. It is a situation which is favorable for real estate investors who decide to buy a price of property in this bustling city. At present, there is almost 1 million housing deficit which calls for rapid production of houses to accommodate not only Dominicans but foreigners who come as tourists, investors or expats as well.
Sound Housing policy
Choose a country with housing legislation which is favorable to property owners, in terms of property taxes and exception, rental laws, obligations and contracts and other housing policies that can affect your interests both as an owner and an investor.
While Dominican Republic does not view decent housing as a basic human right, its housing legislations revolve around two objectives: Every Dominican a homeowner and everyone has the access to low-interest mortgage credit. This means, that all housing policies are centered on promoting decent homes for everyone and developing their capacity to buy or rent respectable homes. The modernization of the housing policy in the country also called for investor-friendly policies on property rights, housing financing and infrastructure and other legal and regulatory policies. What’s more, real estate investors in the Dominican Republic can apply for second passport in the country’s investors program!
You don’t invest in a losing market; you put your money in a thriving and promising industry in an equally growing city with vast opportunities for hefty Returns on Investment (ROI) in the coming years. You think of long-term returns, instead of amassing quick wealth and losing them overnight. While you slowly build your real estate portfolio, you can also grab the opportunities to venture into different types of businesses; in case you decide to become an active, instead of a passive homeowner.
For the past 24 years, the GDP of the Dominican Republic has never failed to amaze anyone with its significant growth and stability, which reached a remarkable 8.7% GDP from April to June of 2016. The immense growth in the tourism industry and a sparkling interest in commercial investments in the Dominican cities, particularly in Sto Domingo is also very encouraging for the real estate sector.
Anyone can enjoy the benefits of buying a real estate property overseas as a way of diversifying investments, so you don’t lose everything when markets crash and stocks go down. It is also a good source of passive income, and a guarantee of a sound retirement portfolio, and you don’t even have to be there. There are companies, such as Real Capital Ventures which specializes on creating top-class passive income for its clients by providing them with the opportunities to gain advantageous deals by investing in real estate overseas, such as the Dominican Republic.
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Ninety percent of millionaires will tell you that real estate is one of the smartest and safest ways to amass wealth.
In its race to be the hottest real estate in the world, Dominican Republic never shied away from an opportunity to flaunt its booming economy, promising investment climate and strong fiscal policy.
How healthy is the Dominican Republic Economy?
GDP and growth rate, these are the two factors that determine whether or not, a country is the best place to start an investment. With a 5.52% average in the GDP annual growth rate from 1992 to 2014 and a whopping 8.7% GDP in the second quarter of 2016 over the same period in 2015; plus below 1% inflation rate last year, Dominican Republic indeed is one of the fastest growing economies of the world!
It is true that the past 20 years has been a test of the country’s resilience against financial crisis. But, new developments, influx of tourists and growth in the manufacturing industry have paved the way for a stronger economy as job creation and private consumption increased.
Supply and demand
With an employment rate of 50.4%, tourism growth double than the world’s rate, and roughly a million shortage in residential housing; the Dominican Republic real estate is definitely an excellent investment vehicle for local and international investors. Urban migration, rapid population growth and hurricanes also contribute to an increasingly severe housing shortage both for high end and low-end consumers.
The dynamic growth of the tourism industry in the Dominican Republic increased the demand for residential and luxury properties, eventually pushing the prices up.
Dominican Republic is the undisputed leader in the tourism industry in the Region with its 5.8% tourism growth, which is higher than the Caribbean’s 3.7 percent. In fact, around 6 million tourists are expected to visit this country this 2016 and the government spares no effort to meet its targeted 7% tourism growth.
International tourism demands for new developments, including luxury real estate and retail establishments. Consequently, more jobs are created, attracting more visitors to the country. The Dominican Republic is also one of the top choices of foreign home buyers consisting mostly of retirees and full-time expats because of the weather, low cost of living, friendly people and unlimited investment opportunities in various industries.
Latest Real Property Developments in Sto. Domingo
Investing in the city center definitely makes sense-Sto. Domingo is the financial capital of Dominican Republic. It is the major center for politics, commerce, culture and different types of industries. The most important industries also maintain their offices in Sto. Domingo-the largest metropolitan city in the country.
Recently, Real Caribe-the Antilles-based division of Real Capital Ventures started a multi-million dollar residential investment project — the Central Suites Tower, in the luxury residential landscape of Sto. Domingo. This luxury high-rise property is located in a prime investment spot of the city and consists of full-service residential units expected to generate robust cash flow from high-end tenants. Both the local and international investors eye this project as a low-risk opportunity to gain passive income and maximum ROI because of the foreseen consistent and high yielding returns from prime properties with appreciating value.
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Spreading your investments beyond one jurisdiction is the best way to protect and grow your nest egg and you can do this by obtaining a second passport in the Dominican Republic.
With an investment of US$200,000 in a local financial instrument like a residential property in Santo Domingo, you can qualify for a second passport. That means, you can enjoy a stable stream of passive income and the benefits that go with it. What’s more, you don’t have to give up your citizenship when you establish residency in the country, either as a resident or as a citizen. In short, you can enjoy some benefits not available for foreigners, especially in the area of banking, investing, travelling and establishing a residency. The same thing applies to rentistas or foreigners receiving at least $2,000 fixed monthly income from a foreign source, such as real estate transactions in the Dominican Republic, provided that the principal amount was generated or earned overseas.
Offshore investing allows you to capitalize on the advantages available outside your home country such as tax incentives, asset protection and complimentary benefit of banking confidentiality. At the same time, a second passport introduces you to the vast options of internationalization for your investments that are available only for Dominicans. This means, you can continuously receive your social security payments, open local financial accounts and enjoy visa-free travel anytime (yes, cheaper travel cost). You can literally diversify your life, by making Dominican Republic your second home!
Enjoy a fully diversified portfolio
It is a common knowledge that regulations may restrict foreign investment opportunities and such restriction can limit the diversification of your investment portfolio. But, a second passport gives investors unlimited access to local and international markets and to all other exchanges available. On top of that, there are lots of opportunities in the Dominican Republic, especially in the real estate sector because of its large consumer market.
Diversify your life!
Having the right to invest, work and live in a country other than your own offers great advantages because you never know where life will lead you several years from now. Think of the bigger picture; Dominican Republic is a great place to start a family, or to spend your golden years because of its friendly people, low-cost health care and education, and breathtaking tourist spots!
Where to Invest
The Dominican Republic is known for its fairly secure investment opportunities both to foreign and local investors. Still, like any other investment, choosing a reputable investment firm is a critical factor in protecting your money. Consulting reputable investment advisor, like our experts in Real Caribe, is a good idea. So, if you are looking to grow and protect your assets, we offer below-market-value investment opportunities with high returns and low risk factors.
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Our team of experts seriously analyze market trends and investment opportunities and provide exceptional investment options to our clients. Besides, our clients are entrusting their investments to a company with over 30 years of experience in real estate, investment, banking and finance. We buy luxury high-rise properties in areas with flourishing economy and surging demand for housing; and strictly screen and select our tenants to minimize investment risk. We also provide a high level of upkeep and maintenance for your investment properties.
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