Survey Identifies Best Property Rental Market In The Caribbean
The Dominican Republic is one of the best places in the world to invest in rental property, thanks to growing demand and undervalued pricing.
You can buy a rentable apartment for as little as US$100,000 or less… and you can leverage that investment if you’d like. Nonresident foreigners are eligible for financing in this country.
According to the U.N. World Tourism Organization’s annual report, the Dominican Republic was the sixth most visited country in the Americas in 2015, with more than 5.6 million visitors.
That’s an increase of 8.9% over the previous year.
The Dominican Republic was also the top tourist market in the Caribbean in 2015 and 2016. This country is emerging as the undeniable king of Caribbean tourism.
More important, the upward trend in tourism continues. The latest tourism report from the country’s National Hotel & Tourism Association shows a year-over-year increase of 6.23% the first six months of 2016 compared with 2015.
Meantime, the average hotel occupancy rate also increased slightly, from 81.8% to 82.1%, during the same period.
With these fundamentals, if you’re a property investor looking for rental yields, the Dominican Republic should be dead center of your radar.
The surges in foreign property investment and tourism have pushed up the price of beachfront, meaning you’ll find the best buys just back from the water.
That’s OK because a rental just back from the front line can still return a double-digit yield.
Following is a review of properties recently offered for sale in top rental markets across the island. The table shows, in each case, the per-square-meter pricing and the cost to buy a one-bedroom, one-bath apartment just back from the beach.
Top Rental Property Markets In The Dominican Republic
| Location | M2 | Cost (US$) | Year Built | US$/M2 |
|---|---|---|---|---|
| Puerto Plata | 69 | 52,500 | 2004 | 760 |
| Boca Chica | 65 | 59,000 | 2002 | 907 |
| Santo Domingo | 74 | 90,000 | 2014 | 1,216 |
| Juan Dolio | 52 | 69,000 | 2000 | 1,326 |
| Punta Cana | 75 | 144,000 | 2006 | 1,920 |
Punta Cana is one of the DR’s most expensive and also most sought-after rental markets. Here you could earn a 9% yield with just a 50% occupancy rate.
Bump that occupancy up to 60%, and your annual yield jumps to better than 13%.
You may have to work a little to boost your occupancy rates—actively promoting your property through social media and Airbnb, for example—but the returns can be worth it.
Omar Best
Editor, Global Property Advisor
