Does buying real estate in another country seem a little intimidating?
What do you need to watch out for?
No matter where you are considering buying a holiday home, investment property or eventual retirement home, there are some universal points to consider:
Most of our clients will never make the DR their permanent home. Even if this is their home base, they will keep property in Canada or the US. We all have families that we will visit periodically and many go home from May through October. Any property has to have good security and a management company that looks after it in your absence. This includes housekeeping, gardening/pool care, general maintenance, bill payments, etc. Both condos and houses offer these services – we call it “lock up and leave”.
#2: RENTAL MANAGEMENT:
Most of our clients are using their properties to generate income or at least pay for themselves when they are not using them. This often makes buying foreign property possible. Choose a country that has a great tourist market, that way you can be ensured of holiday renters, who pay hotel rates per night to rent your property. Also choose a subdivision that handles it all for you. Make sure they have international marketing of the rental units and ask to see actual numbers of rental income versus expenses before you buy. Some of our developers actually offer a rental guarantee. The DR is the #1 Caribbean tourist area. Belize, Costa Rica, etc. could not boast these numbers.
Ensure that the government is very tied to the US and Canada via free trade agreements, investment, etc. This ensures that it will continue to develop for its people and will maintain a solid democracy. Research corruption. Some countries are pretty scary investments due to the government and drug trade. Ensure the government is foreign investment friendly, there are no restrictions on living or buying there (strange visa requirements), and that your property is registered to you.
#4: MEDICAL SERVICES
Ensure there are excellent medical services close by that accept either travel insurance or local insurance. As we get older, this becomes more important. Look for hospitals with docotors and other staff trained to a North American or European standard. Check if medical equipment and testing is up to par. Find out the quality and cost of local health insurance. In some countries you won’t be able to obtain your presecription meds.
Check to see if the property is in a bank trust, a life lease, etc. This means that you don’t truly own the property. Ask if your title is in your name and registered to you personally or a company you own. Make sure your lawyer speaks English and ask to see an English version of your contract. Find a reputable realtor who understands the market you are coming from. Sometimes terminology is different and can be confusing. As an example: what Americans call an escrow account, Canadians call a trust account.
If you change your mind after you buy and want to sell, what is the resale market like? See how long property is sitting on the market. The whole world has had an economic downturn, but if traditionally properties take two years to sell, that’s a problem. You need to be able to get your money out if your personal situation changes.
This one is often overlooked, but exptremely important. If you plan to spend any amount of time in the country you choose, and not just use the property as an investment, ensure there is a large community of like minded people. The beach is great, and hot weather is wonderful, but you will get lonely. Women particularly need to have a community of other women they can be friends with, or life can be lonely. In the Sosua/Cabarete area, there is a large community of Canadians and Americans. Even if people come and go, they are welcome to join in the community at bbq’s, events, etc. Also, when you have a large community, it makes adjustment to the area easier, you learn where to shop, buy furniture, etc.
Check out your new country’s tax laws: property taxes, inheritance taxes, capital gains, etc. Canada Your new country should not have their hand in your pocket as well as your home country. Look for a country with low taxes that is expat/foreign investment friendly.
#9: DISTANCE TO AIRPORT
Travel can be a tiring experience. The last thing anyone wants is an additional three hour drive to the airport after they land in their new country.
Do some serious research on who is doing the building. Do they have experience in that country? Do they have enough money to finish without pre-sales? In some of these countries, anyone can be a builder.
Check out crime stats and talk to other buyers. Make sure it’s safe to walk down the street in the middle of the night. If there are bars on all the windows, then don’t buy there.
Find your DR condo or villa:
Villas offer space, private pools, gated communities and specialty services for expats. Morning coffee overlooking your sparkling pool, tropical nights on your back terrace…heaven.
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