There can be many pitfalls, unknowns, and unexpected issues when you buy a foreign property. The following points are some considerations you may not have thought of:
1./ Security and Management
Will you live in your foreign home/condo full time? For many of our buyers, the DR becomes a second, or vacation home. This means that there are several months when their villa is empty. Any property sitting empty tempts fate in terms of break ins, vandalism or maintenance problems. This is why having onsite security in a gated community is a really important consideration. A management service to pay your bills and provide maintenance services are also key factors for many buyers. Even for our owners who live in the DR full time, many like to travel to their home countries in the summer or take that long European vacation. Our security and management services make all that possible with no headaches or worries. Lock up and leave!
2./ Rental Management
If having your second home pay for itself and not be a large monthly cost is something that is of interest for you, then a well marketed rental management service is a key component when you buy. Many projects, like Casa Linda, have internal rental services with concierge, full front desk, 24-hour renter services, excursions and more. With Airbnb offering a lot of competition and choice for renters, a good rental management company that is hassle free for you is so important.
3./ Government
The stability of the government where you buy mixed with how it treats its people is a huge factor. Look for a country with strong ties to the United States and Canada with trade agreements, tourism and investment. This shows a desire to invest in its own people and to also keep foreigners safe and happy. Some governments are very corrupt and invest little in security of people or foreign investor dollars. How long has the country been a democracy? What's in the news? When was the last time they had a coup or a drug war?
4./ Titles
Will you actually own the property? Be wary if a developer wants you to invest in a trust or life lease. Insist on seeing titles and ensure that what you buy is registered to you either personally or in a corporate name (ensure you are a shareholder of the company). Many countries have restrictions on foreign buyers and where you can buy, how close to the ocean, etc. Ensure your property lawyer and realtor are well respected, speak English and give you English translation of all documents. Do your due diligence and research on them – ask questions of other clients. The DR has a fully registered title system whereby you own your property 100%.
5./ Community and Social Life
Many buyers forget to think about what life will really be like after they buy. Life can be lonely without like minded friends. Find out how large the expat community is. What sort of activities are there – are there things you like to do too? Is it a social area and welcoming to new people? Are there groups you can join, sports, churches? The north coast of the DR has been a home to expats for 40-years. This makes for an active, fun community where no matter what you like to do, someone else is doing it too!
6./ Security
While every country has its share of crime, it's important not to buy in an area where you will be unsafe. We suggest a gated community for petty crime and theft, but not because of violent crime. There are many places to research crime stats from around the world. Ensure your new country is not one of the ones listed as dangerous. If you can't walk down the street or beach in the evenings or have to worry about your safety, walk away. The DR has lower crime stats than the United States.
7./ Taxes
Do research on your new country's tax laws. How much are property taxes – do they differ if you are a foreign buyer? Does your taxation rate change the longer you stay in the country? Do you pay a transfer tax when you buy or how much is the inheritance tax when you pass away. Will it be difficult to get your money out of the country? Be sure the country is foreign investment friendly. The DR has structured its foreign investment programs to be tax friendly and you have the same rights as DR citizens when you buy property. Taxes can adversely affect your standard of living, so research before buying is key.
