The WORST Place To Invest in Punta Cana

Welcome to the Grubernation Weekly Newsletter!

I share information, tactics and tips for moving abroad, living your dream and EVERYTHING in between.

In this week’s edition:

• The WORST Place to Invest in Punta Cana for Short Term Rental

• How We’re Celebrating the Holidays as Expats

• The 5 Best Towns to Move to in Dominican Republic

Colchones Naco is a Dominican owned mattress company with stores in Santo Domingo, Punta Cana and Santiago. They sell all the top brands plus they have their own Naco Royal line made right here in DR! They’re currently offering INSANE Black Friday specials and with any purchase, tell them code ELGRINGO24 (or put it in their website) and you’ll get 2 free pillows on me!

The WORST Short Term Rental Investment Location in Punta Cana

One location in Punta Cana will generate a 6.6% annual return on investment (ROI).

Want to know where?

Let’s first define some terms: 

• “Punta Cana” includes Corrales/Cortecito, Bavaro, Veron

• All data is based off of a 2-bedroom condo purchase

• The numbers and info I’m sharing are DIRECTIONAL – not EXACT

• Every potential purchase requires your due diligence 

A question I will NOT answer is ‘have you heard of XYZ Development and do you think it’s a good investment?’

The only time I’ll say ‘yes’ to that is if I’m investing as I am with Boardwalk Developments in Cortecito. 

What I WILL answer in this write up is the likely best place to focus your efforts in the area to invest.

For this article, I’m analyzing 3 property types:

•  Beachfront 2-bedroom condos

• Near beach 2-bedroom condos (<10 minute walk)

• Inland 2-bedroom (Downtown Punta Cana/Vista Cana area)

And I’m considering 3 metrics:

• Median nightly rate for Airbnb

• Median number of reviews (as a proxy for occupancy)

• Median purchase price 

With all of that, here’s the anticipated ROI for each 2-bedroom option:

Two points to consider:

1. The revenue calculation considers one review as a single 3-night stay plus 30% (Airbnb calculates 30% of guests don’t leave reviews)

2. The ROI will adjust depending on the price of the property

You can find beachfront 2 bedroom condos for less than $700,000 - but you can find them for more too.

Anecdotally, the proportion of reviews, average nightly rate and calculate occupancy align with what I tend to see and hear about on the ground.

Remember my friends .. this is a DIRECTIONALLY ACCURATE calculation and should not be used as your basis for investing. 

I looked at some numbers, plugged them in and saw the outcome .. and it doesn’t seem too crazy when I layer in what I’ve seen here.

The chart below boils it down…

The further you get from the beach the worse the return.

While beachfront is more expensive and only a slightly better return, long term appreciation, demand and appreciation will always be higher at the beach vs far away from it.

I asked ChatGPT to pull data and run numbers as well and it was very close to what I calculated myself.

I mean look, if you need a gut-check assessment of the accuracy what this data proves is that beachfront is the most expensive and most occupied, close to the beach is next and not close to the beach is least. 

No surprise there.

I think the more telling analysis is that the cost to buy beachfront vs. near beach is multiples higher than the difference in occupancy and nightly rate. 

But to answer the question of the WORST investment – the further inland you go, the more your ROI declines. 

Use the info as a guide and let me know your thoughts!

And if you need a realtor to help you out, happy to connect you with one I like here.

How We’re Celebrating the Holidays as Expats

There are two types of Dominican Americans (there’s a bold statement haha)

• Those that embrace both cultures (they live in DR)

• Those that shame Dominicans for embracing their American (they live in the US)

There’s one more actually - it’s the person that just read that last sentence and will feel compelled to remind me that ‘America is a continent not a country’ 😉 

(Were you about to? Huh? 😆 )

Despite the narrative, white/black Americans aren’t moving here unless their an accessory to a Dominican (like me).

The overwhelming majority of the 300,000 Americans living in DR are Dominican Americans.

And they enjoy any excuse to have some fun!!

Halloween started with a themed farmer’s market the weekend before complete with pumpkin carving stations for the kids.

On Halloween night, the rains came and washed out our planned neighborhood celebration so we did the next best thing..

We found a kid who had a birthday coming up and had his family over to celebrate.

When the rain cleared, I was tasked with giving out candy for kids knocking on our front door and our back screen door (they were RELENTLESS) while my wife went trick or treating with the kids.

Around 9pm I got a call that they stopped at a friends house a few blocks away and decided to hang out there.

So I went over and a regular Thursday night on Halloween tunred into this…

For Thanksgiving, we’ll start Thursday with what we call ‘Gringo Thanksgiving’.

We’re going to the home of the ONE FAMILY that is purely American here and celebrating with them. It’s become a bit of an annual tradition - see below for an image of last years spread!!

Then for the weekend, 5-6 families will join us in Higuey at Banana Ranch where my wife’s family is making turkey, pernil and much more so we can all celebrate!

This is a group of Dominican American families.

From last year as well…

Make no mistake, all of this happens while still starting the Christmas season in mid-October along with the rest of the country!

But hopefully this gives you a glimpse into how it looks this time of year down in DR.

And a sense of how family friendly Punta Cana is (which I still get people who don’t live here telling me I’m wrong about 🤷‍♂️).

5 Best Towns to Move to in Dominican Republic

You may be surprised by what’s on and what’s NOT on the list!

Let me know your top 5!!!

I’d love to hear your thoughts! Appreciate you being part of this community and stay tuned for more next week.