Where—and How—to Buy in the Dominican Republic and Costa Rica

▪ Graham says: I read your article about the Dominican Republic in last month’s issue. My wife and I are frequent visitors to the country and would love to own a second home there that we could also rent out for income when we’re in the States. How hard is it for foreigners to buy real estate in the Dominican Republic and where should we look to buy?

▪ Ronan says: Thanks, Graham. I’ve been scouting the Dominican Republic, or “the DR” as it’s often referred as, for more than a decade, and I think this is an excellent moment to explore real estate opportunities in this Caribbean country.

The good news is that foreigners are allowed to purchase real estate in the DR with all the same rights as citizens. In fact, these rights are spelled out and guaranteed in the country’s constitution. As always, you’ll want to hire a good, local attorney to take you through the process, but it’s relatively straightforward.

In terms of where to buy, over the past year I and four of my team have spent weeks on the ground in the DR and our overwhelming takeaway was the incredible potential of Cap Cana.

If you’re a regular visitor, I’m sure you’ve been.

Cap Cana is an out-of-this-world luxury beach and golf community and the country’s top tourist destination. It’s massive, twice the size of Manhattan, with top-tier golf courses, a marina, sports fishing, shopping complexes, upmarket restaurants, a hospital, and a bilingual school. And it’s just 20 minutes’ drive from Punta Cana International Airport, which has regular flights to Canada and the American northeast.

Then there are the beaches. Cap Cana boasts some of the most beautiful beaches I’ve seen anywhere, with glistening white sands against azure Caribbean waters.

Like Mexico’s Riviera Maya and Cabo, the Dominican Republic has seen a huge surge of visitors post-pandemic, with tourism numbers topping 10 million for the first time ever in 2023. Most of these arrivals go to Cap Cana.

I scouted Cap Cana twice last year and during each visit I found myself thinking of it as a sort of mini “Caribbean Cabo.” Just like Cabo, you have the marina, the golf, and the world-class sportfishing.

And the market is similar to Cabo in terms of demographics and wealth, in that it attracts a lot of what I call the “ordinary rich”—the doctors, the lawyers, the tech wealthy, and many other kinds of successful entrepreneurs.

So, the best income play is to buy good-value real estate in an amenities-rich community in Cap Cana that will appeal to these “ordinary rich” tourists who have been flooding here in increasing numbers.

In fact, I’ve been working to bring exactly this kind of opportunity to members of my Real Estate Trend Alert group. And I’m hugely excited by the potential. The developers I spoke to have shown me construction estimates that were shockingly low, considering how much costs have risen elsewhere due to inflation, supply chain issues, and labor shortages. Plus, Cap Cana has major plans for expansion and it looks like things are already kicking off.

The growth potential in Cap Cana is outstanding. This is an excellent moment to buy here.

▪ Barbie G. say: How do mortgages work in Costa Rica?

▪ Ronan says: Hi Barbie. Typically, it’s quite challenging to get bank financing in Costa Rica. You can expect lots of paperwork, high interest rates, and a life insurance requirement that often rules out anyone even with treatable or controlled medical conditions.

Getting residence in Costa Rica first can help remove some roadblocks, but that would then give you other obligations—like paying into the local healthcare system. However, there are other ways of securing financing that you could consider.

Costa Rica is one market where you’ll see seller financing offered. This is far more common in Costa Rica than in, say, Mexico or Panama. This is where the seller of a property is willing to finance your purchase.

Here’s how it works: You make an offer. If a seller’s home is worth $200,000, you can offer $50,000 now and the balance over 10 years at 5%. Offers like this can work in markets where there aren’t many buyers at that moment in time, and the seller just wants out. But in today’s hot real estate market, these sorts of options can be harder to come by.

With deals I bring to members of my Real Estate Trend Alert group, we sometimes have developer financing. As the name suggests, this is when a developer finances a piece of the real estate you buy from them; they are the bank. With developer financing, you can bypass the banks or seller financing entirely. But finding it is tough.

This isn’t something you’ll typically get access to in Latin America. In fact, I’ve rarely seen it for anyone other than members of my Real Estate Trend Alert group. We’re able to secure it thanks to our insider contacts and group buying power. Most ordinary retail buyers will never get this option.

It’s one of the big benefits of being a part of RETA. It allows us to bypass the bureaucracy of the bank and get great terms of our own.