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Benefits of investing in luxury properties in Dominican Republic

11 augustus 2022

The Benefits of Buying  Luxury Real Estate

  • Offers More Control than Other Types of Investments.
  • Involves Less Risk.
  • Assured Capital Growth.
  • Lucrative Rental Opportunities.
  • Acquire Tax Benefits.
  • No Need to Worry About Resale Values.
  • Provides an Effective Inflation Hedge.
  • Establish Your Priorities.

 

Real estate in the Dominican Republic is like everywhere else in the world. It has always been one of the most stable and sought-after investments on Earth. With the Caribbean  variety of vacation destinations, many of exciting tropical islands, and a relatively affordable standard of living compared to the rest of the world, purchasing real estate, especially a luxury property investment in Dominican Republic, makes for an excellent addition to anyone’s portfolio.

In this article, I will be discussing the advantages of buying a luxury investment in Dominican Republic, just like the ones that are showcased on www.remax.luxury  to its esteemed clientele.

The Definition of a Luxury property

Not everybody understands how exactly a luxury property is defined by today’s standards in Dominican Republic. What someone calls luxury, someone else can call average or ordinary but that is based on personal experience or perspective. As real estate professional I have to compare the market to call some properties luxury or standard.

First and foremost, luxury properties are not only price tags. While price is a significant factor, it is not the only factor that indicates if a property is luxury. There are a variety of factors that are important when deciding what constitutes a luxury property.

Luxury properties are mainly defined by their uniqueness and exclusivity, which raise far more value than the cost of the construction and materials alone. In most cases the extra value is created by the location in combination with a high finishing touch. principle of exclusivity and uniqueness is what gives a luxury property its true value.

Proximity to high-end activities also plays a role, such as how near property is to shopping districts, museums, fine dining, and centers for art. Sometimes people want panoramic views of beautiful landscapes, such as lakes, oceans, beaches, rivers, mountainsides, or countryside or city views.

Aside from location and proximity, luxury properties are also defined by their features. Luxury homes may contain the same features as all other homes do, but they do so on a much more high-quality and grander scale. Security and privacy are emphasized, to the point of exclusivity.

Luxury properties should also be equipped with the best kinds of amenities A full-range chef’s kitchen, walk-in closets, outdoor spaces, and large pools and or a Jacuzzi are usually part of the property, to name just a few. There are also smart security features, motion detectors, sustainable energy, high-end wine cellars, and home theaters that greatly enhance the feeling of luxury for a home.

Overall, luxury properties stand out because of their uniqueness and similarity to typical homes, as paradoxical as that might sound. Luxury properties must seek to be unique in their design, utilization of space, and overall effect. Yet like so many others, it seeks belonging, such as being in a good community and the kinds of amenities that most houses are working towards, such as privacy and convenience.

The Benefits of investing in Luxury Real Estate

There are many advantages of purchasing luxury property in Dominican Republic as investments.

7 benefits of buying luxury properties in the Dominican Republic.

1. Luxury Properties are more easy to control than ordinary properties.

Luxury properties offer more control than other kinds of properties in your portfolio.

Whether you invest in a single-family home, a townhouse, a waterfront villa, or a condominium unit, your tenants will understand and appreciate that you want to keep your property in a good condition and that you need more control over it to be able to improve your quality standards.

2. Risk

Property investments, in general, don’t carry as much risk as paper investments, like stocks or bonds which are held up by a nebulous force and could drop in value at any time, especially when you are investing with a long term vision, real estate is a good investment. Real estate prices build up over time because they are physical assets. Looking into real estate investments, Luxury real estate has because its unique character a high exit strategy and because of that less risk compare to all other type of real estate investments.

3. Capital Growth

The rise of an asset’s value over time is called capital growth. Because of the growing economy at this moment this will happen in Dominican Republic more than anywhere else in the world. In general, when people do financial better they will show that step by step off, it starts with clothes, cars and traveling and after that with moving to live in a better place. Most of the people who are financial growing start, with renting a better place because they can actually not afford to buy a property that fits their current lifestyle and this is where investors can make their money. Due to a high demand of luxury real estate, rental prices of luxury real estate will be going up and investors are making a high return on investment. If a property has a potential high return on investment, investors are willing to pay more for that property and that is hoe the market value goes up. When the market value goes up with or without more than you have invest to improve your property CAPITAL GROWTH is the result.

4. Rental Opportunities

Luxury investment properties are a prime asset to become luxury rentals. If you own several properties that have the luxury characteristics described above, you could easily find plenty of customers willing to rent a beautiful, exclusive place.

Also, the rental industry is one of the most controllable businesses in the real estate industry. As a landlord, one has the power to set the prices, and customers are always willing to dig deep into their pockets for the best properties.

Luxury homes for sale that are located in a picturesque setting, are near to local businesses, are located close to a transportation hub, have beaches view or access  or are equipped with unique and high-demand amenities, are prime properties to be rented out to willing customers for long or short term

5. Tax Benefits

Tax benefits for luxury properties could exist in the form of deductions on property tax, lower mortgage interest rates, and depreciation benefits.

Although tax breaks shouldn’t be the main strategy when looking to profit from an investment in luxury property, it is nevertheless an important tactic that can add some income to your cash flow, or at least reduce expenses. Always consult with your dedicated tax advisor to know which tax benefits may apply to you.

6. Resale Values

Luxury real estate in Dominican Republic that enjoy high-value features, such as an excellent location, exclusivity, proximity to important places, or have an interesting history, are going to have a better ROI than other forms of Real Estate.

While it might be somewhat affected by the conditions of the market and of the property itself, the value of luxury properties will generally always be on an upward trend unless you don’t maintain your property well and keep them updated to currently standards.

7. Provides an Effective Inflation Hedge

As mentioned, the value of investment property tends to rise over time, and can better keep up with inflation. As the cost of living rises, the value of investment properties also rises.

This helps investors because the value of their property will never be behind inflation, and one can justifiably raise rent or lease prices if applicable. More than that, mortgage payments are pretty much standardized. This means that mortgage payments will most likely remain the same even as the value of money decreases, decreasing the relative value of the payments as well.

In short, inflation is a benefit to–or at the very least will not harm–luxury property investments.

Tips in Buying a Luxury properties in Dominican Republic

Luxury homes are an excellent investment opportunity for those looking for low-risk, high-value assets to add to their portfolios. However, it is hardly the easiest industry to get into. This is by no means a comprehensive list to buying a luxury properties in the Dominican Republic , but here are a few tips to get you on the right track towards buying your first luxury investment in the Dominican Republic.

Establish Your Priorities

It’s important to have a clear idea of what you want to achieve in any form of investment, an ocean view penthouse in Cap Cana or anywhere else in Punta Cana or Dominican Republic for example, can act as an investment property, but you might also want to use it from time to time . That’s why choosing investment luxury homes that you yourself would want to live in based on your lifestyle and preferences is ideal. In other words, before you purchase a luxury investment house, be sure to think about if you only buy it as investment or also want to use it yourself.

Understand of the Risks of investing in real estate

There’s no such thing as a sure investment in this world–just take a look at the 2008 housing market crash in the United States. Knowing this right from the get-go can save you a lot of trouble and pain later should things go south.

This is true for any kind of investment, but it’s especially applicable to real estate assets. Remember, real estate assets are not as liquid as paper assets, so they are harder to get rid of equitably if things should go badly.

Always Hire Local Experts

Unless you’re a seasoned real estate expert yourself, you are better served hiring the services of an expert in the market that you wish to invest in. Of course, you can always learn by yourself, but it’s going to require time and attention that could be put to better use elsewhere. Local experts will be more knowledgeable about the market that you’re getting into without you having to exert too much effort on your part.

However, it’s important to hire a reputable broker or adviser, preferably from a reputable agency. Everything considered, some individuals and agencies will work for your benefit, but some will not. Make sure you know the difference between the two.

Add an Attorney to Your Arsenal

Mortgage companies and real estate firms are doubtlessly invaluable when choosing an investment property, but they can’t handle everything. Properties like entire buildings and condos will inevitably involve more rules and regulations, which means more paperwork and legal things to consider. Running important documents through an attorney is going to make sure that you don’t miss anything that could lose you money or time down the road.

Benefits of Buying Luxury properties as investment

Aside from being fantastic places to live in, luxury homes are excellent investments to have. People are always willing to pay for a taste of beauty and luxury, and as an investor, it could be you providing them that dream.

More than the cash flow that you can get from either selling your luxury homes or renting them out, they are also valuable assets to hedge against inflation, or even acquire tax benefits.

Interested in buying a luxury investment house now? Take a look at all the properties we have to offer here at Remax Dominican Republic

Are you interested in investing in luxury real estate? Feel free to contact me for more information about the Dominican real estate market

Adriaan Smit

Real estate and financial advisor

 

 

Are you interested in investing in other countries then Dominican Republic please contact one our international REMAX partners in the below links

 

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