Invest in a rental property in the Dominican Republic : my 5 top tips
- On 27/01/2018
- In Understand the DR
Here are my 5 tips for successful rental investment:
DECIDE IN WHICH PART OF THE ISLAND YOU PREFER TO LIVE AND OBJECTIVELY TRY TO IDENTIFY THE ASSETS AND DEFECTS: town or village, tourist or wild places, well served by the different airports, what types of populations predominate, activities, restaurants, opportunities for jobs, school structures, etc ... Once these criteria are determined, you will know what is your potential clientele (family, businessmen, young people, retirees, nationalities ...) You can then target to rent your property and promote it the best way. You will not rent it to young couples in thirst for party and multiple activities whereas your property is in the countryside, 2 hours from the city ! I insist that you should choose a part of the island that you really like, first because you will live overthere from time to time but also because you will have less difficulty convincing your tenants of the attractions of the place.
CHECK THE OFFER AND RENTAL DEMAND in your area : You can see if there are a lot of properties for rent and what are their rates on google, airbnb, booking.com, tripadvisor, homeaways and so on ... Simulate requests rentals at different times of the year to see if there is a lot of availability. If there's little, it means it's rented very well. Also remember to find out if there are a lot of hotels and their occupancy rate by asking people who live and work there all year long. You must know your competition.
Then look for several properties available for sale according to your budget. You can then start making a profitability calculation. Please understand that in this article I don’t speak about investment that will enrich you because, to be clear, the rentals rates are still quite low in DR. In order to prosper with renting you should then have a real estate strategy and a suitable business. I am talking about investing in a property that you rent to pay the annual fees and the maintenance of it then for the lucky ones, to have some money savings for your private stays.
CHOOSE YOUR DIFERENT WAYS OF MARKETING : real estate agents, online platforms, your own facebook page and website. It will depend on your level of knowledge of the subject, the time and money you can devote to it. In all cases you must offer a fair price according to the quality of your services, be very clear in your description and do not oversale things. Finally very IMPORTANT, offer quality pictures so that the customer can understand the size of the rooms and the quality of housing. Remember to specify if there are any restrictions, pets, young children, smokers and others. Also offer some pictures of the attractive places and activities around your property.
SMALL TIP : show your listing to people who don’t know your property and ask for their impression. Do not hide things that may be a problem for the tenant. Nowadays we rent relying on online reviews, if you have promised something that does not correspond to reality, it will be known sooner or later and it will be difficult to get back this loss of trust.
OFFER A PERFECTLY WELL MAINTAINED AND IRREPROCHABLE HOME : Without any doubt the most important point ! Take into account at the time of your purchase that you will need staff to maintain your property when you are not here and to help your tenants. Check before purchasing if you already have people available and competent in the area. Gardener, pool guy, housekeeper and a truthful person who speaks languages if possible (manager or your real estate agent) for various work such as paying employees, purchases for the house but especially to accommodate, guide and help your tenants if needed. All of this has a cost that you must take into account when defining your rates. Unfortunately, it’s not always easy to find reliable people from the beginning, but this factor will be the one that will make the difference between your property and others. An impeccable house, a service of proximity and a kindful welcoming.
It's clear that the main advantage of investing in a rental property is having your own place that you can enjoy at anytime and that will be maintained regularly thanks to the rentals. Be aware that you may not rent much the first year, but if your services are great you will quickly gain notoriety. I recommend to focus on short or medium stays (much more profitable) rather than a year-round rental. You will always have an eye on the state of your property, it will deteriorate less easily and will keep all its value. I would even say that for resaling in the future, it will be a significant argument to be able to prove that this property has a strong rental potential.
Good luck !
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