Why Did Lief Hightail It To This White-Sand Paradise This Week?
I write from Santo Domingo, where I’m hosting this week’s Live and Invest in the Dominican Republic Conference.
We have a sell-out crowd in the room, our biggest turnout for any DR event to date.
I’m not surprised. This country has been at the center of my radar for more than a decade. Initially, it was DR property markets that got my attention. A dozen years ago, when I first sized them up, they amounted to one of the best buys in the Caribbean.
Today, this is only more true. My colleague Omar Best shares details in this month’s Global Property Advisor issue of one particularly interesting opportunity to invest for a yield of 10% to 12% from the expanding Santo Domingo rentals market.
We’re looking at this opportunity up close here in Santo Domingo, too, of course, with the help of the development group backing it… along with many other tempting DR property plays.
I’m using this week’s visit as a chance to push ahead on my personal DR agenda. I’m shopping for a long-term agricultural investment. I’ve identified my crop of priority interest and am vetting particular plantations. You’ll be among the first to read the particulars of what I put together.
Meantime, in the room this week, more folks than usual are looking for guidance for how to hold title to their overseas property investments, including here in the Dominican Republic.
What’s the best option?
No such thing. There’s only the best option for you, depending on your circumstances overall and on the particular piece of property in question.
My standard recommendation for someone who owns (or who intends to own) properties in more than one country is to set up an offshore LLC to hold the titles. This simple structure gives you some asset protection. More important, it eliminates the probate process in the countries where the various properties are located. If you own properties in two, three, or more countries, the probate challenge for your heirs could be significant.
However, if you’re buying just one property in a single country and have no spouse or kids (or don’t care about the probate challenge they might face), then holding title in your own name can be the simplest and most cost effective option.
No need to over-complicate this.
In between those two extremes are dozens of variations to do with types of structures, jurisdictions, and set-up strategies.
The key is finding the right combination of structure, cost, and administration given your real estate portfolio goals.
The important thing to remember is that, thanks to transfer taxes, which most countries impose, you need to decide how to hold title before closing on your first purchase. Change your mind as to how you want to structure ownership, and you could have to pay the transfer taxes all over again.
Lief Simon
