How Much It Costs and How to Buy a Condo in Dominican Paradise

Demand for real estate in the Dominican Republic is breaking every record - every project that comes to market sells out almost instantly, and prices are climbing before our eyes. In this piece, I want to walk you through how to buy property here, how much money you'll need, what financing options are available, and how much short-term rental income you can expect as a property owner during the time you're not using it yourself.

So, you're thinking about buying real estate in the Dominican Republic.

Where do you start?

You can browse every project we currently have for sale on our web portal. If this is your first time on the portal, you'll need to register and create a password to get full access to the site and see pricing, floor plans, deposit terms, and other project information. Unregistered users only see surface-level information.

From there, I'd recommend booking an appointment. You can do this by clicking "Записаться на консультацию" or "Book appointment," depending on whether you're on the Russian or English version of the site.

You choose a day and time that works for you, and you can pick an online meeting, an in-person meeting at our office in Richmond Hill, or a phone call, and I'll walk you through every detail of the buying process, and we'll find the project that best fits your budget and what you're looking for.

How Much Money Will You Need, and On What Timeline?

Once you've chosen a unit and the developer has confirmed it, you have 24 hours to make your reservation payment. This is typically $5,000 USD, and it's applied toward the purchase price of the unit. From there, we send all of your paperwork to Crescent Law, the law firm representing our clients' interests in the Dominican Republic. The cost of full transaction support, including preparation and review of the pre-construction contract, its registration with the title registry office, and transferring the property into your name once construction is complete, comes to one and a half percent of the purchase price. When you sign your agreement with the law firm, you pay 60% of that one and a half percent up front. Preparing and reviewing the contract takes about three weeks. Once it's ready, the lawyer emails it to you. You'll need to print it, sign it, and send it back to the law firm by courier. All of this can be done right here at our office in Richmond Hill. From there, the developer signs the contract, it gets registered with the title registry office, and the transaction is complete. The law firm can either courier the original contract to your home address or hold it for you, and you'll receive a copy by email. Once construction is finished, the lawyers will need the pre-construction contract in order to transfer the title into your name.

Once the transaction is complete, you'll need to send the developer your first payment within a week. This is typically 20 or 25% of the purchase price, minus the $5,000 you already paid at reservation. The standard deposit structure for pre-construction deals in the Dominican Republic is 20 to 25% upon signing the contract, and 35 to 45% of the purchase price paid over the course of construction. These payments are tied to construction milestones and can be structured around whatever payment schedule works best for you. Some people prefer to pay in smaller installments; others find it more convenient to make one larger payment, say, every six months. The most common schedule is payments every 3 months - meaning 4 payments a year.

Here's what your payment schedule would look like if you bought a spacious two-bedroom unit today in one of Punta Cana's luxury developments for $300,000, with construction completing in 2027. (Slide 1)

You pay $5,000 at reservation, followed by the first installment of the legal fee, which is $2,700. About a month later, you'll make your first payment, 25% of the purchase price minus the $5,000 already paid, which comes to $70,000. Over the course of construction, you'll then make 10 payments of $10,500 each, and once construction is complete, you'll pay the final 40% of the purchase price, which is $120,000, along with the remaining legal fee payment of $1,800. There are no additional fees from the developer when buying a unit, as long as the condominium holds CONFOTUR status (a 15-year exemption from all taxes), which applies to nearly every project from the major developers.

Today, condo prices on the east coast, depending on unit size and project, range from $150,000 to $600,000. So if you're buying a $150,000 unit, all of the payments outlined above are simply cut in half, and if you're buying a $600,000 unit or villa, they're exactly doubled.

Now, on to financing. A mortgage on a condo can be arranged 3 months before construction is completed, and the funds are released on the day title is transferred into your name. There are two options: the first is taking out a loan to cover the remaining 40% owed to the developer at the time of the title transfer, and the second is borrowing 70% of the unit's appraised value at the time construction is completed. Typically, a unit's value at completion runs 15-20% higher than the pre-construction price you originally paid. This works out to financing up to 80% of the original purchase price, essentially the same as in the US or Canada. The one difference is that borrowing costs in the Dominican Republic run roughly 2% higher than in Canada, which is why most of our clients pay for their Dominican property in full, drawing on a line of credit or increasing the mortgage on their primary residence back home if needed.

What kind of income can you expect from short-term rentals during the time you're not using the unit yourself?

Let's say you plan to use the unit yourself for about a month each year. Here are two real examples of units in the very areas where we're currently selling pre-construction projects. And these are very conservative numbers, based on older complexes built 4-5 years ago. Much more upscale developments from major, globally recognized developers are being built here today, and rental income there will naturally be higher. But let's work with numbers we already have verified data on.

The first example is a spacious two-bedroom unit in the most upscale part of the Dominican Republic's east coast: Cap Cana. You can buy a unit like this today for $340,000 USD, and it will generate roughly $50,000 USD a year in net short-term rental income, after all expenses, fully managed by the complex's on-site management team. (Slide 2) Factoring in 5% annual appreciation over a 7-year investment cycle (2 years of construction plus 5 years of rental income), that comes to roughly half a million dollars USD. And that's assuming the property only appreciates 5% a year; appreciation is likely to run higher than that. Here's how Dominican real estate has appreciated, in percentage terms, over the past 8 years, along with what experts are forecasting for the next 4. As this chart shows (Slide 3), the forecast points to annual price growth of 10-12%.

And here's a second example with a more affordable unit in the Dominicus/Bayahibe area, where you can buy a two-bedroom unit in a new project today for under $200,000. (Slide 4) Net annual rental income here comes to just under $17,500, and total passive income from rental plus appreciation over the seven-year investment cycle comes to roughly $220,000 USD.

And of course, beyond the excellent investment returns, buying a unit here also gives you a place your whole family will love visiting for vacation. Enjoy a comfortable getaway, and earn money while you're at it.