Foreign real estate investors who buy real estate to fix and flip often ask about the market for fix-and-flip projects in the Dominican Republic.
There are many opportunities for these types of projects, but you’ll have to deal with some unique challenges.
For example, in Santo Domingo’s Colonial Zone—a UNESCO World Heritage site—there are several properties in need of revitalization that you can buy at a discount, invest in updates and repairs, and sell for a substantial profit. However, the government has regulations and requirements that you have to comply with when renovating, like maintaining the property’s external Spanish-Colonial-styled architecture and facade.
In other areas of the Dominican Republic, you won’t have to deal with Colonial Zone requirements, but you’ll still have to apply for construction permits and comply with building codes at the end of the renovation or remodel.
Given the unique challenges of the Dominican Republic, such as the need to comply with local regulations and the language barrier, it’s crucial to engage with local professionals. A local builder or architect can guide you through the construction process, and an attorney can assist with permit applications.
Also, you’ll need to be fluent in Spanish and understand local business practices to manage these construction and renovation projects effectively. Further, if you plan on taking on a fix-and-flip in the DR, you need to be on the ground to see things through. If you or a member of your team is not able to be in the country for the duration of the project, then I’d advise you to reconsider and invest in real estate that is less hands-on.
The construction and renovation must be correct and up to code, as this will ultimately affect your selling price and profitability when you put the property on the market for resale. If something is not in compliance, your buyer can use this as leverage to lower your selling price.
There’s plenty of upside with fix-and-flip properties in the DR, but investors must do their due diligence, research the market, and engage with local experts before starting a fix-and-flip project.
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Maria Abreu is the CEO and Managing Attorney of Abreu & Associates, a law firm practicing exclusively in Dominican Republic Immigration and Nationality law. She is also the founder of Retire and Invest DR. This organization hosts conference events for foreigners interested in living, retiring, and investing in the DR. You can contact Maria at: mabreu@abreuimmigration.com.