A little bit of reality, little bit of a dream.....

kellyjfisch · #1 07-07-2008, 10:09 PM

For a couple years now I have been trying to make it possible for myself to buy a condo in the Dominican Republic, specifically North Coast area. Saving has been difficult as I have been paying off college loans. I just made my last payment on my college loan and am finally no longer in debt to anything, credit cards, loans, etc. It feels great!

But it just takes me back to wanting to make my purchase in the DR. After I finish up my contract teaching at an International School in Uganda, I plan to apply for a teaching position at an International School in the DR, thus would love to be able to be an owner of a piece of property. How can I make this possible?

Can people please give me insight as to how they have gone about buying property? How did you get a loan? How much did you put down on a piece of property? Is it possible to get 100 % financing? Any insight would be great!

Thanks!

susan77 · #2 07-08-2008, 04:26 PM

Quote:

I just made my last payment on my college loan and am finally no longer in debt to anything, credit cards, loans, etc

Major congratulations, Kelly! What a great relief to be debt-free!

I'm afraid I don't have any advice on financing as we were able to pay cash for the house we bought in Las Terrenas (we're MUCH older than you!) But, I do advise you BUY whatever you can afford and don't throw your money away on rent--
Good luck!

J D Sauser · #3 07-08-2008, 05:28 PM

I too will commend you on having managed to go debt free.
Yet, or because of that, I don't quite understand why it is your urge to go right back into it.

I guess you do not live here yet, maybe you don't even know the country much. Which is fine, but I think that because of that you would not be ill advised to rent first a couple of months so to get to know the country a little better, make sure you have picked the right region for you and also find some good deals without pressure. Everything is for sale here... but new comers can be taken quite easily, blinded by the beauty of this country and it's inhabitants and erroneously comparing real estate asking prices to tourists to the values in more developed countries.

As for how others here have done it, I would venture to reckon that the vast majority of ex-pats living here have paid cash for their homes. Some may have sold their properties in their home country and others may have re-financed their home properties to raise some "mortgage" money for their vacation homes abroad.

Mortgages are available but mostly only to legal residents (unless you can get owner financing) and depending where you are coming from the interest rates may surprise you a little. Many mortgages have a short life period and may end with a fairly large balloon payment too.
If you plan on paying a mortgage here, you should first secure a well paying job... again not something which is easily found here. To do that, you again would need to be a legal resident here.

If it is your plan to keep your Caribbean dream home as a vacation property, I'd advise to only do so after you saved some money which you wish to invest as "play" money.

... J-D.

kellyjfisch · #4 07-08-2008, 10:31 PM

Thank you all very much for your replies. I wouldn't say that I really know the country; however, I have visited many times and have lived in East Africa for an extended period of time which is far worse than anything I have encountered in the DR in terms of adjustment, hard life, etc. But, yes I agree, it would be a good idea to explore the DR a bit more. I have many local friends and have a good feel for the local life but not entirely.

In terms of a good paying job, I am currently teaching at an International School in Uganda which offers much better benefits and salary than any teaching job I have had here in California. My hopes are to apply for a teaching job at an International School in the Dominican Republic which offer the same benefits as the school I am currently teaching at, and some International Schools in the DR offer even better benefits and salary.

The advice I have been offered by both of you thus far is very valuable but I would still like to hear all the advice I can get. This is not something I plan on jumping into just want to see the reality of it so I can make a plan!

Thanks Again!

Chip · #5 07-08-2008, 10:56 PM

I bought a home here in the DR through a cooperative here. My wife is Dominican and that may have helped even though she didn't do anything other than sign the contract.

Also, I had to give two years of my taxes to prove my income. The only problem is the absurd interest rates they charge here. Expect to pay between 11 and 15% through a bank and somewhat more through a coop (because of a tax discout one gets).

Lambada · #6 07-09-2008, 01:39 AM

Quote:

Originally Posted by susan77

But, I do advise you BUY whatever you can afford and don't throw your money away on rent--

I wouldn't advise this. Like JD I would advise you to rent, kellyjfisch. Many of the expats living here are probably in the last house they will ever buy. You however sound a lot younger. You've taught in Africa, you're considering teaching here, might you in 5-10 years be considering another move? In which case might you need a more moveable or liquid asset?

sweetdbt · #7 07-09-2008, 08:18 AM

I'm glad that you are happy with your purchase Susan77, but it sounds like the OP's situation is much different from yours. "Don't throw your money away on rent" is generally good advice in places like here in the US, where a months rent is often higher than a mortgage payment and (at least until recently) real estate is a much more liquid asset than in the DR, where properties can stay on the market for years.

Interest rates are high and rent relatively low in the DR kellyjfisch. The generally accepted wisdom is to rent for at least a year and find out if you like it there, where you really want to live and how much you should really pay before buying a home.

bart6 · #8 07-09-2008, 09:08 PM

congratulations on being debt free, but then again you were debt free before you went to college.

my advice is to go back to the states and hustle, save your nickels and then come back and buy something for cash in 5-7 years with your savings.

AK74 · #9 07-13-2008, 01:31 PM

Quote:

Originally Posted by susan77

Major congratulations, Kelly! What a great relief to be debt-free!

I'm afraid I don't have any advice on financing as we were able to pay cash for the house we bought in Las Terrenas (we're MUCH older than you!) But, I do advise you BUY whatever you can afford and don't throw your money away on rent--
Good luck!

A bit of strange advise. Considering that selling without a loss at the end within a reasonable time frame in some 99% of localities (except 1%- expensive beach front free standing villas) will be practically impossible.

Sure, pride of ownership is a tempting thing, but in Dominican reality in the long run this purely emotional pleasure will cost thousands and thousands more in comparison with worry-free renting.

I know personaly many people who are selling their homes for five-six years by now. And cannot go back to their England, or Germany or Russia because of this. And only HEARD about luckies who were able to sell within a year and without loss (taking into account closing costs, lawyer`s fees, maintanace and repairs during ownership, 10% Real Estate agent`s fee at sale).