Real estate investments and the industry as a whole has taken considerable beating from the economic recession, which left the real estate agents as well as homeowners compromising on money, locations and what not for a decent bargain.
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However, while the European and American real estate market looked to be in murky waters, business in the Caribbean real estate world has been booming! Experts have suggested a number of factors for this slow but steady rise of investment in real estates in the paradise islands, especially in Dominican Republic real estate ventures. These include the awe-inspiring natural beauty, the mixed pot of cultures, maritime weather and of course, the native population – which is the most welcoming when compared any other part fop the world.
However, there are some facts to be kept in mind before you start investing in this seemingly flawless real estate paradise. Here are a few tips to help you through:
1. Decide on the budget beforehand – Calculating your budget and standing by it is an art every real estate investor opting to purchase property in the Dominican Republic real estate market should master. Whether you intend to opt for a direct ownership or bifurcate the budget as partner owners or funds for real estate investment, the budget should be finalized before you take the plunge.
2. A thorough recce should be your priority – Intensify your research on the Caribbean real estate destination – right from the pricing comparisons to growth potential of capital investments and the style of property unit best fit for your budget. Remember that as real estate investments, valley estates and beachside houses maybe priced sky-high, but they may not turn as profitable with time as condominiums in the urban areas do!
3. Handpick your real estate agent/brokerage firm – Look up real estate brokerage firms in the Caribbean islands, and selectively choose your brokerage firm or real estate agent yourself. Check for track records, authentications, licenses, whether they provide multiple listing services etc before you decide to get one on board.
4. Know the actual costs – Taxes, insurance, water and power supply bills, telephone connections and Internet charges (which is also a vital component these days) can all add up to the actual investment costs in any Caribbean real estate buy. So make sure these have all been accounted for, either by you or your agent, before you decide to follow through on the purchase step.
5. Consult fellow real estate investors – This may or may not be helpful, but checking up on the real estate scenario in the Dominican Republic or other islands may give you many insights that professional Caribbean real estate agents may not provide you with. You can do this while on vacation or may also go on a professional trip financed by your real estate agents and do some investigations on your own.
With these tips, you can easily get hold of a valued Dominican Republic real estate property without having to invest a fortune. Chances of losing it on a bad Caribbean real estate investment also go down, enabling you to enjoy the ambiance rather than worry about the future of your property or capital on the island!
Commercial Property Contracts and Leases
Contracts written on commercial property differ slightly from those for residential properties:
Commercial Property Contract Differences
A residential contract is not appropriate to use for commercial purposes, because there are certain things that commercial buyers and sellers want to do that the standard residential contracts may not include, such as:
• Delayed deposit • Particular documents from Seller • Extended inspection periods • Specific representatives and warranties • Closing commercial considerations • Brokerage fees
Tip: Always use a special commercial contract that provides for these major differences.
Delayed Deposit
In a residential contract, the deposit check is customarily attached as a gesture of good faith and to demonstrate the ability to complete the deal. Apparently, commercial sellers aren't nearly as influenced by this custom. In commercial agreements, the deposit is usually received within two or three days after signing the contract. This gives everyone a chance to sign, so you don't have several deposit checks floating in and out of escrow accounts all over the county.
Almost all commercial real estate investors use delayed deposits. If you are making an offer on a property, you write the contract and prepare the offer. Where the contract says Deposit, you enter whatever amount your deposit is going to be and say that it will be posted with the seller's nominee.
The deposit is usually sent within three business days of all parties signing; in case contract negotiations take two or three weeks. Commercial sellers consider this standard operating procedure. However, there may be an occasional commercial business proposition, resulting in a signed contract with no money deposited.
Documents from Seller
As part of the commercial property contract or lease agreement, the seller must submit certain documents to you within a specified time, after the contract is executed, such as:
• Engineering plans, drawings, surveys, and artist's renderings • Economic and financial studies relating to the property
In the event that you do not purchase the property for any reason other than Seller's default, you must return all information to the Seller, together with any information that you may have compiled with respect to the property.
Inspection Period
Your commercial property contract should also state that you have an inspection period-a free look. This period is to khu đô thị nam cần thơ allow you to conduct different types of inspections and pursue any lines of inquiry for the next 60, 90, or even 120 days-whatever it will take to get the job done. During that period, whatever deposit you submitted is not at risk. The inspection period starts when the Seller delivers the documents you requested. That way, your due diligence clock doesn't start immediately, which gives you sufficient time to address important issues, like environmental factors.
This period is extendable, so always ask for extensions. You are determining the usability of the property and may decide not to buy it. Therefore, you must be able to give notice of termination of this agreement at any time prior to the expiration of the inspection period or any extensions. If you decide to terminate the agreement, all deposits must be returned to you.
You may extend this inspection period for up to three 30-day periods without asking for the Seller's permission. However, you must give the Seller advanced written notice before the end of the inspection period, together with an additional deposit.
Stay tuned for more, as we will follow up with part 2 of Commercial Contracts and Leases in an upcoming article.
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