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| Viviun -> AD-70409 : Great Investment Property Near Bavaro/Punta Cana. - Apartment Buiding For Sale in La Otra Banda De Higüey, Altagracia Dominican Republic | ||||||||
Apartment Buiding For Sale in La Otra Banda De Higüey, Altagracia Dominican Republic Great Investment Property Near Bavaro/Punta Cana.Asking Price: $175,000 USD (Negotiable - Financing Available) This is a lovely property with apartments in la Otra Banda de Higüey, built following simple lines and North American quality. Every step of construction was supervised by an experienced builder from Canada. The locals were so impressed with the quality built into this building, they nicknamed him 'Engeñero' (the Engineer).
The floor plan is simple, but very desirable in this area. Units renting around here for as much as RD$2,500 per month, do not have indoor plumbing and have wooden walls. These units are currently renting for $3,600and will be increased to $3,900 very soon. The double unit has been separated with internal doors making a total of seven unites currently rented. All tenants are clean and good payers. Across from the building is a property with a mango tree offering cool shade from the afternoon sun. This lot is now under construction with lovely two-bedroom apartments (not for sale) bringing property value even higher and making this area even more desirable. Similar buildings are being completed on a property to the north. The panorama from the rooftop is spectacular. (see the Web site for a panorama view) You can tell just by looking at this building that this was well designed, engineered and constructed. No corners were cut. Just a note concerning this area and island: The Dominican Republic is one of the most stable economies in the area and where we live, real estate is going up very quickly. Cap Cana is located twenty to thirty minutes from here making our location, La Otra Banda de Higüey, the bedroom city of choice. (See capcana-dot-com/2005/updates/) The area around this building is very tranquil and picturesque. Have a look at the panorama by visiting our site. Note on the country's economy: Here is a quote from dr1-dot-com, for Friday, 15 December, 2006: “The Dominican economy grew by 10% in 2006, achieving the second highest growth rate in the region, and will finish this year with five consecutive trimesters with a double-digit growth rate. Venezuela also enjoyed a 10% increase in its growth rate. These figures were published in a study by Economic Commission for Latin America and the Caribbean (ECLAC). ECLAC, which is known as CEPAL in Spanish, points out that the driving force in the figures is the increase in investment and not in consumption. ECLAC, a United Nations organization, expects a continued growth estimated at around7%. Although there was in increase in the international price of oil, there is an expected inflation rate of only 4.5% in 2006 compared to 7.4% in 2005 and 28.7% in 2004.” Note on real estate: Real estate here has doubled in the past two years. We bought property here for RD$266 per square meter in December,2004. Fourteen months later the property next door sold for RD$425per square meter! Gross revenue for this building is RD$24,500 per month or RD$294,000 per annum. Running costs, including management, are about RD$40,000 per annum. This leaves a return on investment of 4.4%. That does not take into account that the rents here increase by about 15% or more per annum (no rent control board). It also does not include the real estate capital gains. As of right now, moneys earned here are tax free, as long as they are declared here (there is nothing to file here, you simply consider it as moneys earned here). This property, all things being equal, will sell for roughly RD$10,000,000 (about $357,000CDN) in two to three years. To see how this would play out in your portfolio, have a look at the tables on our Web site. This could be used as a unit to rent, furnished, to northerners looking to come for the real flavour of the place for two weeks to two months. Those kinds of rentals are four times what the locals would pay (roughly $490 US per month). We can help you set that up.
What if the economy fails at it did a few years ago? Any investment carries some element of risk. I invested in mutuals with the Royal Bank of Canada a few years ago. That investment has lost 65% to date. The agent's poor choice of investing and my poor choice of agent. The best way of reducing the risk is to find something that will likely perform well over the long term. Mark Twain, although not the best manager of his own finances, did make a statement that has proved true over and over: “The thing that I like most about property is that God's not making any more of it.” My personal experience in real estate investment bears this out. Property bought seven years ago in Peterborough, ON, Canada for $105,000CDN now has an appraised value of over $200,000. That's an annual in crease of 9.5% accrued, or 90.5% over seven years. The accrued rate is nine times greater than a savings account and six times greater than savings bonds for the same period. When the economy encountered difficulties here a few years ago, the cost in US dollars for property here went down. That situation lasted a few months, after which property values continued their upward trend. Case in point: A friend of mine benefited from the dip in the peso by buying a house for roughly $12,000US. That house was worth $24,000US before the problems started. Now, three years later, that same house is worth $100,000US. He's just put in on the market (Santiago/Tamboril) if you are interested. So, as anywhere, real estate needs to be looked at long term, not month by month. Another example: Property bought before the crisis just across the road from these apartments was renovated by the owner and had a value of RD$1,200,000 two years ago. It now has a value of over RD$1,800,000. And it's not a particularly nice house sitting on a very small piece of land. A property very near to the one that our building sits on was bought for RD$266 per square meter two years ago. One year ago the property right next to it sold for RD$425 per square meter. It now has a value of RD$550 per square meter. So the value of property here continues to increase. What will it do in the future? Who knows? But it is an investment I personally would repeat. The owners are self-supporting missionaries serving on this island and need to move to the north of the island, near Puerto Plata. Once this is sold, they will likely buy another property up there just to keep their investment growing. What if I can't rent this out? There are more people here than apartments giving a 0.1% vacancy rate (unofficial count). That there is any vacancy at all is usually because of landlord indifference or bad timing (vacancy in December--no one rents in December and only a few in January). Since this is becoming the bedroom city of the East island, this situation is not likely to change much. Nevertheless, to make you feel a little more comfortable, the owner will allow you to make a $5,000US holdback that you can leave with our lawyer. If during the first six months following the purchase you can't rent all apartments, you can deduct whatever lost revenue (number of vacant apartments X number of months vacant X current rental rate) from the five thousand U.S. Can you ask for anything better? (Not offered if owner financing is involved) What if there is another cyclone (hurricane)? The tourist industry here fought back after the last hurricane and given that there is a lovely, very busy airport in Punta Cana, that they are building a highway from Santo Domingo to Bavaro, and that there is already a huge commitment to this area despite the fact that the investors are aware of this risk, a hurricane can only mean greater profits for you. Why? Our building has been build to withstand hurricanes and earthquakes. It will very likely still be here when the dust settles. Apartments like these will be in even greater demand as more workers flood the area to help with the reconstruction of hotels and houses that would follow a hurricane. Supply and demand will mean that you can rent at higher rates. You are also ready with your own generator making these apartments very desirable indeed. Their loss will be your gain. How can I be sure that this is legitimate? The deed for this property was registered by the law firm of Guzman Ariza & Asociados, S.A. Their Website can be found at drlawyer-dot-com. You can ask them about CERTIFICADO No. 85-121. Our lawyer in that office is Dr. Christoph Sieger (CSieger@DRLawyer-dot-com). Telephone: 809-552-1452. He speaks English, Spanish and German. He is also very busy, so don't expect him to remember this deal right off the bat. Give him a little time to look things up. You are also welcome to come and visit. We will be happy to pick you up at your hotel (in Punta Cana, Bavaro, Cabeza de Toro, Santo Domingo, Santiago, La Romana, Puerto Plata or Sosua) and show you around. If this is such a good investment, why are they selling? Basically, for two reasons.
We have a clear title (a rarity here) with both properties on one deed. I built this place, so it has Canadian engineering and quality (also rare here). The building has its own power source (propane 15 kW that can be converted easily to natural gas) and we wired the building so that each apartment can have its own inverter and meter. I will include one inverter along with the batteries in the sale. The property has enough room to build one or two more eight-unit buildings of the same size, depending on how parking is arranged, or whatever other configuration the new owner would choose. I would suggest four, small, two-bedroom units. If you would like to use a local contractor, I know two very honest, hardworking contractors willing to take this on. Such a construction would greatly increase the property value, much more than what you put into the construction. Since we are not leaving the country, we will be available to the new owners as consultants if they so wish. Price and conditions: The owner is flexible on closing conditions. Price is negotiable ONLY if the new owner accepts to do some finishing. For example, there is one apartment being used as storage. If that is accepted as-is, the price could come down a little. They are willing to exchange for a house between Sosua and Cangrejo as long as there is some cash back on the trade. They are also willing to make a straight cash sale paid to their account ($US or $CDN) in Canada. Preference is given to buyers who can deposit to Canadian accounts. Financing is also available but not where a trade is involved: 40% of selling price, two-year term, twenty-year amortization, 11%--not negociable. The main-floor double apartment is ready to move in should the new owner wish to live here or reserve an apartment for himself (it is currently rented, so the tenants would need to be put on notice a month ahead). Call directly to 809 309-3517 (ask for William). The remaining property would make a lovely four-plex. Owner is willing to finance and supervise the construction for you.
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