Is Renting Your Condo or Villa Worth It?
Many of our buyers use their properties as part time, or full time rentals. You have lots of options. Here is some information about renting your Dominican Republic Property:
Info about the DR rental market:
Its report on travel trends states that the DR is one of their top trending destinations for US travelers. There was a 320% increase in bookings from 2020. This is good news for owners of condos and villas because the most popular rentals were entire homes and condos. Cabarete is a top location.
Its report on travel trends is also excellent. The DR was one of their top international destinations for US travelers, with a 140% increase in bookings from 2020. Again, entire condos and villas were the most popular, with beachfront leading the pack. Cabarete is also a top destination.
DR Tourism Statistics:
In 2022, more than 8.5 million people visited the Dominican Republic, making it the most popular Caribbean destination. This is 3.7% more than the previous year. According to President Luis Abinader, “Our country is open, ready to give the best of itself and show the world what we already know, that we are a little piece of paradise on Earth. These numbers have been achieved in one of the worst circumstances, in a hostile international environment. “We have been able not only to withstand the impact of covid-19 and resist the effects of the economic crisis derived from the war in Ukraine, but we have managed to position our country on a better competitive map in the entire Caribbean and Latin American region.” Foreign tourists came mainly from the United States (32%), Canada (16%), and Colombia (5%) in 2022.
Rental Rates and Income
According to Global Property Guide, the growth of the DR’s vacation market continues to show steady growth. Rental yields in tourist areas like Puerto Plata and Punta Cana can be as much as 10-12% A report by Transparent in 2021 (a vacation rental data analytics firm), showed average occupancy rates of 54% in 2020. Occupancies in 2022 were much higher, with a large demand and lack of properties.
What Kind of Renters Are There?
The north coast of the DR is an interesting microcosm of tourism. We have few all inclusive resorts, but still a robust vacation market. Renters tend to be people who like their own space. They don’t want to deal with crowds, buffet lines, or being herded. They want their own kitchen, the ability to do things on their own, good access to beaches, etc. Many come back to the Sosua/Cabarete area year after year – many more than once a year!
These are the one to two week holidayers who want good access to the beach, privacy, and are comfortable doing their own thing. They may take advantage of local tours, rent a car or just hang out by the pool or at the beach. They choose condos and villas as direction opposites to hotels. This is a very strong market
More Longer Term Renters
These are the folks that come to the DR for longer than a month. Many come for a whole winter. This is a profitable market for owners because your unit has the same renter in it for long durations. There is less wear and tear, administration, and often that renter will come back to you every year. The downside is that you can’t use your property in the best months, but for investors, it’s a great option.
What Makes a Successful or Unsuccessful Rental?
How much you earn depends on several variables:
- Location. Short term or vacation renters often want to be close to the beach, or at the least, have a method of transportation to get there. This also includes access to grocery stores, restaurants, and other shopping.
- Amenities. For people with kids, they often want large pools, playgrounds, mini golf or other amenities for families. An onsite restaurant or gym is also wanted.
- Other people. Depending on the renter, some may want to be in a large community where they can meet new friends.
- Quality of your property. Renters want beautiful decorating, well stocked kitchen, lots of towels, a bbq and all the comforts of home. If a villa, then a private pool is a must. The nicer your property (pictures tell a story), and better it is to give guests a great experience, the better your reviews will be. This means more rent.
- Security. Strangers in a new country need to feel safe. All inclusive hotels offer that safety net, but so do well managed gated communities.
- A good management company. Having a great rental host to take care of your renters is invaluable. Experiences count – whether it be a good one or a bad one. Timely communication, making sure your property is in top shape, doing out reports, providing excursions, car rentals, etc. are services that renters love.
This is a brief overview. For more details on the ins and outs of renting, please feel free to contact us. We’ve helped people buy rental properties for over 17-years.
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