Canadians temporarily buy properties in Dominican, Caribbean resorts

Canadian real estate agents are going to new lengths to sell properties for just two weeks or more in the Dominican Republic and across the Caribbean and into Costa Rica, and Mexico.
But the list of possibilities even extends further north in prime Canadian cottage country regions like Ontario's Muskokas, ski communities in B.C. And even properties near Quebec City and into Atlantic Canada.
Unlike investing in a prime Canadian vacation property that can range from $400,000 into the millions, there are vehicles available to give consumers something much more affordable – temporary ownership periods.
But isn't that just another name for a timeshare? Not so, says Colleen Valerio, pictured above, the owner of Edmonton's Dominican Republic Properties.
“With time shares, you own a portion of the “time” of a property. What we sell is outright, titled ownership to property,” she told Property Biz Canada.
Fractional ownership, a different way to slice it
A long way from timeshares, what Valerio's firm and many others are starting to sell is part of a resurgence of a trend in real estate called Fractional Ownership. There are other vehicles too, including freehold, time ownership and time share.
It's a real estate investment idea that is spreading to many resorts across the Caribbean and Central America to name a few. Fractional ownership caught on many years ago, and although there were some properties, the practice was largely marketed to jet setters buying aircraft, yachts and even high end sports cars – anything with a multi-million price tag.
While many of the fractional ownership projects are successful, like any investment vehicle, they carry a real risk. Ontario projects Whitewater Village and Wolf Lake and Wolfe Springs Golf and Waterfront Resort have experienced slow sales. In B.C., one former time share property was recently offered for an auction sale. It's easy enough to find these examples by searching on the Internet. As with any investment, it's a good idea to get professional advice.
It had a resurgence a few years ago, largely when more people started buying properties in a way that divides a unit similar to a timeshare, but gives the owner the benefit of the increasing value of the investment. Of course, it also includes the expenses, too.
But the property boom of the 80s and again recently got investors thinking about how to make money work instead of leaving it all behind by renting at a resort or in timeshares in a place with dated shag carpet and wood paneling.
Fractional ownership can work well, but it depends where the property is located, according to the folks that wrote the website on the idea.
“Fractional property ownership … works particularly well in luxury resort destinations with a dedicated visitor profile and high real estate prices,” explain the folks at Fractionallife.com.
“It has proved to be a very good fit for the Caribbean, where it is rapidly growing in popularity.”
Ownership varieties prove popular in Caribbean
A number of larger companies operate land rental systems that look after properties for owners by renting them out for specified times and looking after the maintenance of the properties when they are away for a fee.
DR Properties says that's why it fills a niche — “Because most Canadians don't want to live there full time.” But there are benefits to owning.
The location of the DR properties is around the North Coast, which is known for its weather in the high 20s Celcius and in an area that is not prone to hurricanes.
Another benefit is that the area is home to a large community of expats and businesses that cater to foreigners, with lots of restaurants, banks and shops, hospitals and activities.
“Canadians represent the biggest expat community coming to the north coast of the Dominican Republic,” said Valerio. “Most are not moving here permanently, but are using the properties when they can (2 weeks to 6 months per year).“
Valerio said many of their clients are still in their working years. “When they are not here, they rent their properties to vacationers,” she said, adding it is a popular Caribbean vacation spot. “The end goal is for our buyers to spend winters here at least.“
Valerio couldn't say how many Canadians own places there, but she claimed the number is growing.
“In Casa Linda, a villa development, we have sold over 20 homes in the past few years to Canadians – and this is just our real estate company and does not take into account all the other companies that sell here as well.”
Buyers divide time with homes in Canada
She told Property Biz Canada that they also sell in other developments, but there are no overall statistics for foreign buyers because there is no MLS system in the Dominican Republic.
Most of the buyers will never live there full time and continue to work in Canada or the U.S. until retirement, the company says. That's one of the reasons the condos and villas are in gated communities that offer: communities with 24-hour security, full administration services (bill payments, maintenance, housekeeping, and garden/pool service) and all have rental programs so owners can earn rental income that is fully managed and marketed for them if they choose.
“Our properties in the Dominican Republic have so much to offer those looking for a warm, outdoor lifestyle,” says Valerio. “Whether clients want a property for two weeks of the year or want to permanently relocate, we will find the property of their dreams.”
There are now fractional real estate developments in Bermuda, Barbados, Jamaica, St Lucia, Cayman Islands, Turks and Caicos, Dominican Republic, Anguilla, Costa Rica and Grenada among others, with more in the planning stage across the Caribbean, said Fractionallife.com.
Back in Canada, owning vacation rental properties with other investors is becoming more common and without the stigma of the timeshares, which often followed high pressure sales at resorts, leaving a bitter taste in the mouths of vacationers years later after being lured to a resort with loss-leader prices only to find out they had a mandatory minimum hard-sell sales pitch presentation.
Customers enjoy ownership experience in Muskoka
A Canadian example of the more civilized fractional ownership approach is Muskoka Fractional Cottage Ownership, a site that is finding success in Canada, and winning the admiration of its customers.
“What impressed us the most was the 'no pressure' sales tactic we experienced at Blue Water Acres, write Ray and Barb Lewis. “The fact that we didn't feel pressured to buy immediately, as we have at other places was very pleasant. It made us feel we were dealing with an ethical corporation.”
For Heather King, fractional ownership just made sense.
“We are very busy, and with the rising costs of cottages, the maintenance and taxes, it wouldn't warrant putting out that kind of money when we can't use it often enough,” she writes. “We thought this would be the perfect solution for us.”
Although it's not his area of expertise, Prince Edward County real estate broker Geoff Church said another twist for a similar type of investment in Canada is that it makes lake-front properties within reach for some families who find much of their home equity tied up in their primary residence.
“They couldn't afford $400,000 for their own private place, but they could afford $179,000 to be part of that community,” said Church, who has also lived in the Caribbean on the island of St. Croix.
“There are all kinds of twists out there these days with vacation real estate.”
Church pointed to a new Ontario development Sandbanks Summer Village in Prince Edward County, which is being marketed as a three-season development, featuring a common pool, playground, restaurant for $179,000 plus HST and a monthly maintenance fee.
So whether you call it a straight out purchase, time share, fractional ownership or rentals, there are plenty of investment vehicles available to help Canadians afford to put the sand between their toes, without totally emptying the wallet or giving up a permanent residence.
Video Extra: BNN Want to learn more on the Sandbanks recreational property development? Howard Green of the Business News Network is joined by Sandbanks Summer Village spokesman Howard Hall and by Phil Soper, president and CEO of Royal LePage







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