Considerations for Buying Foreign Property

Many expats rent out their foreign properties when they are not living in them to generate passive income. The Dominican Republic has an excellent tourist market, making renting a property a lucrative option. Some developers even offer a rental guarantee to ensure a steady income for the property owner.American and Canadian expats considering buying property in the Dominican Republic should consider that most expats do not make an immediate permanent move. Following their relocation, they usually want to spend some time in their home country throughout the year. Consider hiring 24-hour security for their DR property or finding a company that can take care of the property in their absence, including housekeeping, gardening, pool care, general maintenance, and bill payment.

However, expats should be cautious when purchasing property in the DR and beware of properties requiring a bank trust or life lease. It's essential to ensure lawyers speak English; ask to see an English version of any contract. Check how long a property has been on the market, as a property sitting there for a few years may indicate a significant problem. By considering these factors, American and Canadian expats can invest intelligently in Dominican Republic property.

Can foreigners request financing in the Dominican Republic?

It is challenging for foreign buyers to obtain approval for a mortgage in the Dominican Republic, so we recommend financing through a line of credit to get the best possible rates if you are from Canada or the US. If financing in your home country is not an option, we have two suggestions for you — traditional bank financing or seller financing. In some cases, developers and sellers finance buyers with a 20% down payment if the contract is paid off within seven or ten years. 

Bank Financing

Scotiabank’s Dominican Republic mortgage rates changed the game for expats in recent years. Scotiabank offers Canadian, United States, and United Kingdom residents mortgages for purchasing a second home in the Dominican Republic. We recommend talking to a Scotiabank Financial Advisor at one of their branches or visiting their website for more information []. 

You can also choose from a variety of additional options, but interest rates oscillate around 20%. They are also adjustable and can be obtained in pesos, which change a great deal against the US dollar. Get in touch with us if you need more information about Dominican Republic mortgage lenders. 

Several developers provide pre-sale opportunities for upcoming projects. As a project nears completion, the property's value often increases, making pre-sale opportunities a wise investment for buyers. Here is what you need to know about striking a deal with a Dominican Republic seller or developer for a property that is under construction.

Instead of being responsible for the total amount upfront, pre-sale deals allow you to ease into investing. Payments are broken up into steps. Holding a small property requires an upfront security deposit, whereas larger property hold payments are due throughout the construction development. At closing, a final payment is due.

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