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Santo Domingo – Samana Highway gets additional funding

The new highway connecting the Dominican Republic’s capital city, Santo Domingo, to the popular tourist area of Samana has been open for use for over a year.  However, there are a few sections that have not yet been completed. Currently the drive is about two and a half hours from Santo Domingo to Las Terrenas.  With the new sections completed, it should take about two hours for the same trip.  Before the highway was opened in 2008, the drive was approximately five hours on a road in poor condition. 

 

According to the following article posted on September 8, 2009 on the Gov Monitor, the Inter-American Development Bank will lend up to $44.8 million to the highway project.  The 99 kilometers of existing highway that connects Nagua, Sanchez, Samana, El Limon, and Las Terrenas will be rehabilitated and there will be a new 24 kilometer route connecting Las Terrenas and Majagual.  

 

Last year when making the drive from Santo Domingo to Las Terrenas we took a few photos of the new highway.

 

Here’s the article that appeared in the Gov Monitor:

 

IDB Supports Toll Highway in Dominican Republic

 

Project will back development of road infrastructure to improve travel connections in areas with great tourist potential

 

The Inter-American Development Bank will support a toll highway project that will reduce the travel time between Santo Domingo and the Samaná peninsula, an area with great tourist potential, located in the northeastern part of the Dominican Republic.

 

Continue reading article: The Gov Monitor

How to Prosper in International Resort Real Estate

Do you dream of owning property in a tropical paradise? Do you know the essential steps you must follow to truly prosper by investing in the right international resort real estate project?

Knowledge combined with a solid plan can make the difference between a strategic and smooth decision-making process leading to a successful profitable transaction and an ongoing headache (and heartache) project that never pays off. 

Most people don’t realize how affordable and accessible beachfront and resort property can be; however, it’s critical to do your homework before you commit to anything. LasGaleras_Hotel

 

The first steps are all about getting educated. This part of the process will likely be the most time-consuming and the most valuable. 

Resort real estate can be very profitable and may offer significant tax and lifestyle benefits.  It is important to be clear about your financial strategy and risk tolerance on the front end, since every project and opportunity will present unique risks and benefits. 

How would you hope that owning international real estate would impact your lifestyle?  Is it appealing to you to benefit from the tax advantages and lifestyle of visiting your investment property periodically as part of your investment management plan?  Or, do you simply want to enjoy a second home in a beautiful beachfront resort and know you have an appreciating asset? Would you be greatly disappointed if a project took five years to be completed, when you were hoping for two?  Be clear about what you want.

Buying raw land and building a home or a project of any scope often offers the highest return potential hand-in-hand with the most risk (Think 500 – 1000% ROI, over a three to eight year period, assuming everything goes exactly as planned–which rarely happens).  Investors who buy into a development project in its earliest stages will benefit from lower prices and will assume more risk than those who purchase just prior to construction or after construction has started.  The safest bet (and the highest cost) is usually found with completed construction.  Not to say there are not risks with purchasing finished homes; however, the risk of the developer running out of money and not completing the project, the risk of permits being denied, or the risk of an extraordinarily slow building process are mitigated when the building is already completed and ready to move in. 

There are several trends, which have led to the popularity of resort investment, but perhaps the most significant trend is that baby boomers are hitting financial peaks in their careers and are also inheriting substantial sums of money from their parents.  More and more Americans are flocking to resort-like cities.  Kenneth Johnson, a senior demographer at the University of New Hampshire’s Carsey Institute said, “You get the wave of the baby boom, which is bigger than the wave before it, and on top of that, the baby boomers are more likely to purchase these second homes, or amenity homes, or move to these areas. And so you get, essentially, a demographic perfect storm.”

A “demographic perfect storm” seems like a compelling argument to invest in a resort location, but you must decide if this asset class is a good fit for you.  Also, you will need to decide if you will pursue raw land, pre-construction, completed construction, or rehab projects.  This is largely a decision based on risk tolerance and desired timeline.  

If you have determined that international resort real estate does in fact fit your investment strategy, risk tolerance, and life goals, it’s time to begin investigating potential geographic markets. Factors you might want to consider first include the political and economic stability of the country, the year round climate conditions, the policies and attitudes towards foreign investors, and ease of travel to the country. If you are starting your search for prospective investment markets from scratch, the Internet is a good place to begin.  There are an abundance of global real estate portals, packed with information, including http://www.escapeartist.com, http://www.globalpropertyguide.com, http://www.overseaspropertymall.com, and http://www.viviun.com

This market investigation process will inevitably lead to the discovery of multiple projects in your desired geographic market that warrant further research. 

Conducting adequate due diligence on each project under consideration will help mitigate your risk exposure.  At minimum, you will want to understand how property management will be handled, investigate the builder/developer’s background and track record, and verify that property title and permits are in place.  It is also important to know the exact location of a project and its immediate surroundings.  For example, a project may be located in a beach town, but its proximity or access to the beach may be less than ideal. 

Visiting the real estate market you are considering, getting a feel for the community (if one exists), meeting face to face with the developer and seeing the exact location of your prospective projects is one of the best ways to conduct due diligence.  Plus, you’ll likely have a lot of fun exploring the area. 

At this point, much of the research and education process is completed; however, there are still important steps to take.  You’ll need an international real estate team including an international tax attorney or CPA, and a possibly an attorney in the market you have chosen.  Financing options, tax implications, impact on cash flow and net worth all need to be considered.  Always look at the worst-case scenario, and make sure you can “wait it out” should that become necessary.  Know your exit strategy options.

Once you have narrowed you search down to one or more properties or projects, Review all purchase contracts and payment terms with your attorney.  Be ready to walk away if you don’t like the terms and conditions offered in the contract. Make sure that everything in the contract is clearly stated. 

Now you are ready to commit to and finalize your deal by signing the contract and submitting payment. If you have found a good project, you will have a new asset to add to your portfolio and you will have a beautiful property to enjoy.

1 ‘Amenity Migrants’ Alter Life In Resort Towns, by Daniel Kraker, Aug. 19, 2008, NPR

Dominican Republic Starts to Recover

This article, written by Joachim Bamrud, appeared in Latin Business Chronicle on August 11, 2009.  

 

The Dominican Republic is starting to see signs of recovery, leading to more optimism among local and foreign investors…

 

Osvaldo Oller, a director of the Oller Group, sees real estate in tourism areas like Punta Cana, Puerto Plata and Samana picking up after months of low or no demand. ”There’s a noticeable improvement,” he says. The Oller Group is involved in real estate, construction and tourism. 

 

Continue reading article

 

Another article, also featured on Latin Business Chronicle, states that the Dominican Republic has largely been spared by the international economic crisis, seeing only a slight decline in tourism for the first half of the year.  

 

The article points out “The Dominican Republic last year received a total of 3.8 million international visitors, which was virtually the same as in 2007.  However, tourism receipts grew by 2.8 percent to $4.2 billion, according to the World Tourism Organization (WTO).

 

The Dominican Republic is also the largest tourism destination in the Caribbean and the fourth-largest in Latin America after giants like Mexico, Brazil and Argentina. When measuring arrivals compared to total population, the Dominican Republic ranks third in Latin America.”

 

Read this article

 

Real estate market worldwide is recovering

There  are strong new reports that the global real estate market is hitting the bottom and some impressive positive news is coming from real estate markets around the world.  In the U.S., the real estate market has yet to hit the bottom, but at least it is very close. There are 2 factors that would determine recovering the real estate market:

Continue reading article Examiner.com.

Fodor’s Comments on Las Terrenas

Here is what Fodor’s says about Las Terrenas, Dominican Republic…

Las Terrenas is the main tourist base on the Samaná Peninsula. It, rather than Santa Barbara de Samaná, the peninsula’s biggest town, is the true center of a visit to the region. The main roads from the southern part of the peninsula end up at the busy center of town along the water, where you can find lots of bars and shopping. Some visitors looking to get away from civilization may find it overcrowded, but others will enjoy the variety of restaurants and nightlife.
The center of town is split by a river outlet to the sea. To the east the beach is known as Playa Punta Popy, and this is the least desirable of the five big public beaches in Las Terrenas. To the west of the river in the middle of town is where much of the action is—you’ll know you’re here when you pass the Kick’n Ass Bar and Grill. A short distance later—beyond this partly Americanized section—the commercial flows into the charming at a conglomeration of restaurants along the beach called Pueblo de los Pescadores. The beach here is called Playa Las Terrenas. There’s a casino farther along the road. Beyond this, the beach becomes even less commercial and more attractive, stretching to where the road ends: this is Playa Ballenas, named for the offshore rock islands that appear to resemble humpback whales.

Las Ballenas

As nice as Playa Las Ballenas is, Playa Cosón and Playa Bonita offer are even quieter and less trafficked since they’re farther away from the town. At Playa Bonita you can bounce between the golden beach and one of the hotels directly across the rough road, where you can have lunch. Hotel Acaya is one of these hotels and has an open-air restaurant and bar.
Playa Cosón is an unspoiled 12-mi stretch of white sand, the best beach in Las Terrenas. At the time of this writing there were no finished developments along the main beach, but a number of condos were under construction. You can add a pool and drinks to your stay here by buying a day-pass at one of two all-inclusive resorts, which have long private beaches along the Bahía Cosón.

DR Tourism Faces the Future

This article was published April 28, 2009 in a popular Travel website…TravelPulse.com

As with every other region in the world, these are tough times in the Caribbean. According to statistics on 12 destinations released just a few days ago by the Caribbean Tourism Organization, only Jamaica and Cuba are holding their own in arrivals through the first quarter. Five of the 12 mentioned member states are reporting double-digit losses, including Anguilla, Antigua and Barbuda, St. Lucia, the Cayman Islands and Montserrat. Even though the Dominican Republic (DR) dropped by 4.4 percent, the country is pushing forward with its program of aggressive investment.

“Life will always have its ups and downs, and those ups and downs compel you to look backward and forward,” says Haydee Kuret, president of Asonahores (the DR’s hotel and restaurant association). “When you do that, you see that crises are a normal part of history and so you can’t stop moving forward.” Kuret made her comments at the recently completed DATE (Dominican Annual Tourism Exchange), which was held at the Barceló Bavaro Convention Center from April 20 to 22.

For the DR to fully realize its ambition to become a destination firing on all pistons, Minister of Tourism Francisco Javier Garcia says he realizes it will need a cultural component that is more than Salsa bands and handicraft markets at the resorts. The island needs a vital city and town life that is appealing and safe for tourists. It also needs to put its rural areas in the mix as well as ecologically pristine areas.

At his DATE press conference, Garcia promised to maintain a long-term commitment to developing attractive, well-lit urban spaces in such destinations as Punta Cana, Puerto Plata, Santo Domingo and Samana. He also promised to continue to revitalize roads and build new highways, including a highway from Santo Domingo to Samana that would shorten drive time from 5.5 to two hours and a planned highway from Santo Domingo to Punta Cana that will shorten the drive from 3.5 to two hours.

The DR also needs to diversify its markets. That’s why Sans Souci terminal in the port of Santo Domingo, which opened its first phase in January, plays a major strategic role in the country’s planning. The 2007-2008 season ended with 82,000 visitors more than twice the previous year’s. Cruise ships also are calling in Samana and La Romana, and the hope is to re-establish cruise calls at Puerto Plata, which used to be an attractive magnet for passenger ships. Garcia announced a study to see what can be done to revitalize Puerto Plata’s cruise business.

Last year, the DR received roughly 3.4 million visitors, giving it a slight increase (1.4 percent) over 2007, about a million of them from North America. After rocketing into the upper echelons of tourism over the last several years, the DR continues to catch the tourism industry by surprise. It does exceedingly well in Canada and Garcia expressed the belief that its success north of the border was largely due to a more successful effort at getting the word out.

Garcia promised to accelerate the DR’s promotional efforts in the U.S. by adding more tourist offices around the country. Currently, the DR maintains offices in New York, Miami and Chicago. Though he would not specify where those offices would open, Garcia suggested that the Midwest with its cold winters would be receptive to the kind of marketing that has worked so well in Canada and the Northeastern U.S.

With a sophisticated road network, the DR could evolve from its current status as a beach and golf experience into a multi-dimensional vacation with eco-tourism as well as historic and cultural dimensions. A strong road network would bring Santo Domingo, the oldest city in the New World, into the range of excursions available to guests sunning and putting in Punta Cana. At DATE, there was also talk among the Dominican press corps of an investment group from the Balearic Islands that was interested in developing a rail link between Santo Domingo and Santiago. Such a link would not only connect the two largest cities in the country but also the two most historic areas.

For the time being, however, the east coast of the DR, the area generically known as Punta Cana, remains the main driver for DR tourism. In 2008, its international airport was the busiest of the country’s eight international airports, receiving nearly 1.9 million arrivals. The second busiest airport is Las Americas International Airport in Santo Domingo with nearly one million arrivals, followed by Puerto Plata International Airport on the North Coast.

At DATE, events were held to display the Barceló Bávaro Palace Junior Suites Deluxe (www.barcelo.com), the newly-opened Iberostar Grand Hotel Bavaro and The Reserve at Paradisus Palma Real (www.paradisuspalmareal.travel/reserve). These properties each showed why the DR is right to maintain its optimism. A pool side soirée for 400 at the opulent Iberostar Grand Hotel Bávaro (www.iberostar.com) was especially impressive. The hotel, which opened last December, is the newest addition to the Iberostar Bávaro Golf & Spa Resort, which includes the Iberostar Bávaro Hotel, Iberostar Punta Cana and Iberostar Dominicana.

In February, with Garcia in attendance, DR President Leonel Fernández broke ground on the $2.5 billion Punta Perla Caribbean Golf, Marina & Resort tourist complex (www.PuntaPerlaSales.com), the third tourism initiative to be launched in the country since November. The beachfront resort will include four boutique hotels, 8,800 residential units, three golf courses, an inland marina, a beach club, an amphitheater, sports installations, commercial units, a shopping mall open to the public, a museum and staff accommodation. Punta Perla is expected to be completed within a 10- to 12-year period.

Ironically, the DR’s acceleration in tourism was probably helped enormously by the success Cancun has had in convincing the U.S. market that a beach holiday in a Spanish speaking culture is just as enjoyable as vacations on English-speaking islands. Now Mexico is dealing with terrible publicity surrounding border drug wars and now swine flu. These factors could drive some of Mexico’s tourists to the DR, DR officials believe. On the other hand, the DR has to be just a little nervous about the increasing likelihood that Cuba will soon be a major tourism competitor. For more information, visit www.godominicanrepublic.com.

James Ruggia

Executive Editor-Destinations
TravelPulse.com

Site resources and data updated

Just weeks ago, we updated the Boomerang Unlimited website. It had been almost three years since we launched the site, and there was so much new information to add. Since I am always asked for pictures of the Dominican Republic, we added a large photo gallery, consisting of 64 images (mostly pictures that we took while visiting the DR). We also added recent articles and some new resource links. LittleGirl in Las Terrenas

Thankfully, the content on the site is still valid. The Dominican Republic remains a top pick for foreign investment, the economy in the Dominican Republic is still strong, and tourism, though it has taken a hit with the struggling world economy, still reflects a small growth rate in 2008.

I remain confident with Dominican Republic real estate, and am thankful that we chose this market as part of our own investment strategy.