Fast Real Estate: Low Investment Doesn’t Mean Low RiskSeptember 2, 2020 3:43 pm
In Dominican Republic we have a saying that goes “lo barato sale caro” that means something like “you get what you pay for”. And it’s true. Not because something is cheap is worth paying for and not because something is low investment means that it is low risk. If you’re not careful, or your realtor is, you really get what you didn’t pay for and that, in the long run, is going to be a regrettable decision. Specially, for cheap houses.
And, here it is. We know there are a lot of cheap houses on the market and low investment developments now, and with Covid-19 we can get that impulse to make bold decisions, but really, when it comes to real estate it’s better to be super safe than sorry.
What is “Fast” Real Estate?
Like fast food or fast fashion, we call fast real estate to those low-budget properties (usually below 60k), that sell really fast. They attract a lot of people because of its unusually low price and they are built at industrial areas because of how cheap the land is. Fast real estate can also be called low-budget properties, cheap real estate, economy properties, among other names.
This is the case of properties located in Verón, a well-known industrial and commercial area mixed with economic housing development, located in Punta Cana. Veron is where most of the hotel chains and suppliers have their warehouses and shops. Here you can find a lot of low-budget properties, some could be really nice surprises but If you’re looking for your piece of paradise, maybe Verón is the last place in the Punta Cana-Bávaro area you should be looking into.
What is the real difference with other touristic developments?
We repeat: you get what you pay for.
When you go for a low-budget property or a fast real estate investment there may be a lot of disadvantages that usually the buyer may not know at the moment but in the long run they discover that what wasn’t a problem in the beginning now comes as a big problem.
So, what is really the difference between these kinds of properties and other touristic developments?
They’re not under the CONFOTUR Law
We talked before about the CONFOTUR Law. This law is really very broad and seeks to populate the least served tourist areas of the Dominican Republic and to promote the protection of the environment in these areas. Once a development is approved by CONFOTUR and granted the above-described benefits, investors are able to deduct their investments from their net taxable income. But this law doesn’t apply to any development, most certainly doesn’t apply to a fast real estate or a low-budget property. Our recommendation is: this law is made to protect our investments and to promote investing in the Dominican Republic. Let’s use this resource wisely and not get carried away by offers and low prices.
The capital gain is much lower
It’s basic math. Not because a property is cheap the return of the investment will be a good one.
Quality shines by their absence
There are some low-budget properties or cheap houses that are really good deals but are not the rule. Sometimes, these properties may have a lot of hidden problems and concerns that are costly mistakes. (https://fernandez-vega.com) If you find a low-budget property that you like, please contact us so we can give you our expert recommendation. Also, read this article we made on Home Inspections.
Industrial and commercial areas are not touristy
Fast real estate is usually on low investment land. This means, as we said before, these properties are usually located:
- Far from the beach, because it’s an industrial area, for example.
- Far from the airport.
And, you may say “far is subjective” but it really isn’t If your a second home buyer or retiring in the Punta Cana-Bávaro area. Even If you’re coming here once a year, the fact that the beach and the center, where you can eat, drink, have fun, get in the way of the experience you could have If you’re part of developments which have communities more adaptable to you and what you want to experience while in the DR.
So, to summarize, we have filtered the best low-budget investments in the area and we are very knowledgeable about the best options that are safe and abide to what is expected from them. As real estate experts we must educate and raise awareness on the matter so nobody gets manipulated by “deals” and “offers”, that in the long run can turn out to be a problem and a big mistake.