Real Estate Investing

I just read on a Wesabe message about a guy who bought a half acre of land 1000 yards from the Caribbean Sea using a credit card.  I’m only linking here to the Wesabe site because it says (and emphasis is mine to respect privacy rules), 

Wesabe is unique because it combines easy-to-use budgeting tools with a thriving community of smart, supportive people, anonymously sharing ideas and advice with each other to help everyone get more value for their money. And, your information stays private and completely secure, so you can take advantage of Wesabe’s many benefits without worry.

The commenters were very insightful urging the buyer caution in dealing with local customs, laws, and regulations, along with the challenges of local builders and codes.  However if the buyer did purchase in the Dominican Republic, it’s a place I’ve heard is FANTASTIC for people considering investing or retiring.

Homes are incredibly affordable according to this article which sourced Realtor Juan Perdomo of Century 21/Juan Perdomo Real Estate Company,

… along the north shore, prices of well-built residences are highest in Sosúa (approximately $15 per square foot), up to two-thirds less in Cabarete ($4 to $5 per square foot), and much less the further away you get ($2 to $2.50 per square foot). 

You can buy a magnificent ocean-view house in Sosua measuring 3,766 square feet, with three bedrooms and four bathrooms for $340,000. The property sits on 1.7 acres of land with a swimming pool. Or, how about this—a seven bedroom/six bathroom home with 5,380 square feet, on 1.11 acres of land with a swimming pool, waterfall, and Jacuzzi for $330,000—it was originally listed for $550,000. That’s on the high end of the property scale. $179,000 will buy you a two-bed/two-bath house in a good location, with a swimming pool. Or an apartment in a secure complex with swimming pool for $43,500.

The article went on to explain that foreigners have the same right to buy and own homes as natives to the Dominican Republic, as long as the Title Registry Offices have a record of all purchases made by foreigners.  In the DR, buyers must first come to a purchase agreement verbally and then the verbal agreement is written.  In dealing with any foreign purchase (or domestic, for that matter), hiring a good honest attorney is key to having a successful transaction.  In Tennessee, for example, our escrow offices - or title companies - must have an attorney on staff to oversee all transactions.

This article offers a huge amount of great information if you’re considering purchasing a home in the Dominican Republic.  At the end, it also names reliable builders, attorneys, real estate agents, schools, and more.

This home is listed at $286,000 and has an in-ground pool, 5 bedrooms, 3 baths and over 2300 square feet.

Here’s one for $168,000 and a few minutes walk to the beach.  It has 1600 square feet, 3 bedrooms, and 2 baths.

There is a huge disparity between the wealthy and the poor on the island.  I don’t know how this would affect a purchase and living in the area, but it’s something to note.  I could see myself living in the sunshine of this beautiful island.

Photos from here.

The Web Urbanist brings us a collection of amazing houses from around the world.  For example,

I know, right?

And speaking of the unusual, take a look at the Burj Dubai Skyscraper going up.  Here’s a link to the photo where you can zoom in and see fantastic detail.

You can watch the progress here.  To get a real idea of just how tall the building will be, here’s what the skyscraper would’ve looked like in New York City prior to September 11th, 2001.

Soon to be the tallest building in the world, luxury apartments will be available once it opens - estimated completion date in 2009 (or 2008 depending on what you read).  According to the site,

Burj Dubai will feature residential, commercial and retail components including the world’s first Armani Hotel & Residences, exclusive corporate suites, a business centre, four luxurious pools and spas, an observation platform on Level 124 and 150,000 sq ft of fitness facilities. 

Even in the absence of vertigo, I’d have to think long and hard before agreeing to sign a lease there.  Maybe it is the memory of September 11th that gives me pause.

So what is in your five-year plan? Does it involve international real estate investing? If so, you may want to take a look at a recent Forbes article projecting the “up-and-coming” real estate markets around the world. The article analyzes housing conditions in capital cities and business centers of several countries, based on “economic expansion, inflation rates, strength of individual property rights and access to lending in emerging markets.”

So a second home or, say, a vacation rental purchased in one of the following locales could yield big rewards down the road.

Tel Aviv, Israel’s strongest real estate market, is on the rebound from an extended period of deflation. In 2007, things started turning around with a 2% increase in housing prices. Gross domestic product increased simultaneously just over 5%, and is expected to see a 3.8% growth this year. All things that bode well for economic development and the real estate market.

Kuala Lumpur, the capital of Malaysia, has seen economic growth rivaling that of nearby Southeastern Asian countries but some of the area’s lowest inflation and consumer prices, according to Forbes. The housing demand in Kuala Lumpur is so great that builders are running to keep up and prices are as much as 70% higher than initial asking price in some cases.

Santiago, Chile and Aman, Jordan have seen economic inflation and development grow proportionately. This means, as Forbes put it, “economic expansion represents a greater value in the real estate market because it speaks to what people can afford in the loan market.”

Forbes’ article took an extensive look at the overall economic health of these developing countries, because that is extremely important in determining the likely returns on real estate investments. For instance, the article points out that Latvia and Estonia excited investors in 2006 when home prices grew 66% and 24%. But considering the economic instability of those countries, it is little surprise that prices depreciated 7% and 14% in 2007, taking the wind out of investors’ sails. No one can predict world events, which is practically what you’d have to do to feel comfortable investing in smaller international markets. It is by no means a stable investment, but could be an interesting and possibly a profitable one if you have some serious cash to gamble.