The question that comes up most often before making a real estate investment isn't how much return it will yield, but how much money is needed to get started.
For a real estate investment in a new construction project in the eastern part of the Dominican Republic, the initial down payment rarely matches the list price. There are four distinct components to consider: the deposit to reserve the unit, the payment plan during construction, the closing costs at the time of title transfer, and the recurring expenses once the property is delivered. Those who plan for only the first component often find that they run out of money before the deed is signed. With entry-level prices starting at around US$155,000 in the current portfolio, a realistic estimate is arrived at by adding up these four components, rather than looking at the “starting” price.
What are the four types of capital?
| Block | When is payment due? | What's Inside |
|---|---|---|
| Reservation | When choosing the unit | Amount required to reserve the apartment, with a lease agreement |
| Payment Plan | During construction | Installments spread out until delivery |
| Closing Costs | When transferring the title | Taxes, legal fees, and registration fees |
| Recurring Expenses | From the time of delivery | Maintenance, services, insurance, management |
These four components are always present. What varies from project to project is their relative size and timeline.
How much does each block weigh?
The deposit is usually a fixed amount or a small percentage of the price, and what matters most is not the amount but whether it is refundable and under what conditions. It’s a good idea to have this in writing before making the transfer.
The presale payment plan spreads out a portion of the price between the signing and the delivery, and reserves the rest for closing. That structure is precisely what makes buying off-plan affordable: you don’t need the full amount from day one, but you do need to be certain that you’ll be able to cover each installment on time.
Closing costs are the most commonly overlooked expense. They include the 3% transfer tax on the registered value published by the DGII, legal fees, and registration fees. Here’s a nuance that significantly changes the bottom line: projects with an approved Confotur plan under Law 158-01 are exempt from that transfer tax. The complete breakdown, item by item, can be found in “ITBI and the Actual Costs of Buying in the DR,” along with details on the scope of the exemption under the Confotur Law and how much it saves you.
Recurring expenses aren't part of the initial investment, but they determine whether the real estate investment is sustainable: maintenance fees, utilities, insurance, annual property taxes (if applicable), and management fees if you plan to rent it out.
Can it be financed?
A non-resident foreigner can obtain bank financing in the Dominican Republic, with requirements and terms that differ from those for residents, and many developers offer their own payment plan during construction. These are two different things that are sometimes confused: the developer’s plan covers the construction, while the bank mortgage typically comes into play at the end to cover the remaining balance.
How the payment is calculated, how it varies depending on the term and interest rate, and what banks require are all covered in this guide to calculating a mortgage loan in the Dominican Republic.
How much capital is actually needed?
We don't publish a single figure because it would be inaccurate: it depends on the project, the phase, and the payment plan you negotiate. What you can do is calculate your figure in this order:
- Select the price for the specific unit, not the "starting at" price listed for the project.
- Request the payment schedule with exact dates and amounts.
- Add up the closing costs, after first checking whether the project is covered by Confotur.
- Estimate twelve months of recurring expenses.
- Add a buffer to account for unforeseen delivery and equipment issues.
That calculation yields a realistic figure. The method for converting it into net return—including the formula and an example—is explained in “How to Calculate the Actual Return on an Apartment.”
What mistakes make a real estate investment more expensive?
- Base your estimate on the "starting at" price, not on the selected unit.
- Wait until the day of the closing to find out about the closing costs.
- Assume that the project is registered with Confotur without verifying this on the Confotur (MITUR) website.
- Do not include equipment if the unit is delivered unfurnished.
- Plan on rental income starting from the first month, when occupancy rates are typically lower.
Frequently Asked Questions
How much do I need to start a real estate investment in the Dominican Republic?
It depends on the unit and the payment plan. With starting prices of around US$155,000 for new construction, a realistic down payment is calculated by adding the reserve, construction installments, closing costs, and a cushion—not just the reserve.
Can a foreigner invest without residency?
Yes. Dominican law does not restrict the purchase of real estate by foreigners, nor does it require prior residency as a condition for investment.
Does Confotur eliminate all taxes?
No. It provides an exemption from transfer tax and property tax under the terms of Law 158-01 for a specified period. It does not provide an exemption from rental income.
Is a pre-sale or a completed property a better investment?
A presale spreads out the payments over time, which reduces the initial capital required. In exchange, you assume the construction risk and do not generate income until delivery.
Are the prices in dollars?
For new construction projects in the eastern part of the city, this is almost always the case. The contract specifies the currency in which payment is made and the exchange rate to be used.
Let's put together your number
If you'd like us to work with you to determine the actual capital needed for a specific project, including its payment schedule and closing costs, please contact us. You can view our project portfolio or reach out to us through the Contact page.
