At parties, I’m fond of answering the question “what do you do?” with a quote attributed to the 19th-century tribal leader William Penn Adair.
“Find out where the people are going and buy the land before they get there.”
It’s a neat way of explaining how I approach real estate investing. It applies whether you’re buying raw land as a pioneer…or putting money down on a pre-construction condo in a best-in-class community in a fast-growing beach destination.
The point is the same. Find out where people are going. Get there ahead of them.
But inevitably this leads to a follow-up question, “How do you find out where the people are going?”
Today, I’m going to tell you how I do this…
And I’m going to share how this method is now pointing toward an incredible Caribbean island destination…a place where, with the right deal, you can own a stunning luxury beach home at incredible pricing.
With its white-sand beaches and warm azure waters, this island is emerging as one of the premier luxury travel destinations in the Caribbean. This is one of the key destinations where the people are going next…
For almost my entire career as an international real estate investor, I have followed what I call Paths of Progress as the surest way to be ahead of the people…
In its simplest form, a Path of Progress is anything that improves the accessibility of a piece of real estate or makes it more desirable, say infrastructure like roads, bridges, or airports, or a 5-star resort in a place that previously only had hostels and budget hotels.
Now, this strategy alone is not enough to ensure success. Easier access alone does not mean the people are going to come. For instance, no matter how smooth a new highway is in the Arctic Circle, or now nice a new resort is in Belarus, I doubt millions of people are coming.
So, you need a few other elements as well…
One is desirability. People have to want to go there. We are interested in places people can access easily and want to be. Great weather, lots to do, stunning beaches, an enviable lifestyle…
Another key element is ease.
It has to be easy for mobile people and businesses to set up. It has to be easy for us to buy, rent, and sell real estate…easy for everyone to do business.
Some governments do smart things, attract money, business, and affluent people, and thereby create a virtuous circle, driving development. Other governments do the opposite.
Take Vietnam, where I found stunning beaches, beautiful mountains, thriving cities, and modern infrastructure. Within that country there are places that jump out as desirable, with good roads, good internet…all the elements I seek except one: It’s just so hard! The visa and residence situation is a morass, doing business is a nightmare, owning real estate impossible…forget it. People want “easy places.”
In a nutshell: To find out where people are going I look for a Path of Progress in a place that’s desirable and that’s easy to get to and do business.
And right now, I’m tracking a monumental Path of Progress in the Dominican Republic…
With a coastline like this, it’s not difficult to understand why the Dominican Republic’s tourism sector is booming.
The Dominican Republic is one of the world’s most inherently desirable destinations.
Michael Jordan has vacationed on this Caribbean island. So have Jay-Z, Beyoncé, Jennifer Lopez, Denzel Washington, Ben Stiller…
Celebrities like these, and plenty of other ultra-rich vacationers, come here to stroll its stunning white-sand beaches…swim in its warm azure Caribbean waters…play golf on world-class courses…dine in gourmet restaurants set within 5-star resorts…
This country is on a major upward swing in its development.
The Dominican government has gone to great lengths to attract investment in luxury tourism.
There are tax breaks and other benefits for developers of resorts and infrastructure. Roads have rolled out. Airports have grown in size and sophistication. The big brands of luxury travel are all well established, and more are pouring in. You’ll also find resorts like a St. Regis…Hyatt…Secrets…and a stunning Eden Roc.
The Dominican Republic is now the most popular Caribbean island destination and the second-most visited country in Latin America.
In May Fortune magazine wrote: “The Dominican Republic is having a moment. Ten million tourists a year are flocking to its beaches, helping drive one of the region’s best performing economies. Poverty is near a record low, and investment at an all-time high. Even Fast & Furious star Vin Diesel wants to build a movie studio there.”
That last bit is a reference to plans for Punta Bergantín, a massive development planned for the north of the country that’s set to include luxury resorts like Hyatt and Karisma, a waterpark, a movie studio, and an innovation hub dubbed by some “Silicon Beach.”
This speaks to the scale of the transformation happening here.
To stay for a week this December at Secrets Cap Cana Resort and Spa will cost you $5,831.
The Dominican Republic is also thriving in areas beyond luxury tourism…
Last year, the DR broke its foreign direct investment record, attracting well over $4 billion. Increasingly, it’s a key player in the global supply chains for products like textiles, pharmaceuticals, electronics, and medical devices.
Some major global companies are in the Dominican Republic, like Johnson and Johnson and IBM.
The DR is now consistently ranked among the fastest-growing economies in Latin America and the Caribbean. Since the early 2000s, the country has seen annual GDP growth rates that often surpass 5% to 7%. This country is also one of the hottest candidates for nearshoring in sectors like semiconductors and sophisticated electronics.
Nerds in organizations like the World Bank call the country’s robust economic progress “the Dominican Republic Miracle.”
The Dominican Republic’s economy is flourishing and in a strong position for further growth. This underpins all that makes this place so attractive for the millions of people visiting.
Nowhere else in the region is seeing such a transformative Path of Progress.
To understand the scale of what’s happening here, you need only look to the country’s premier luxury destination…a place in the far east of the island called Cap Cana.
Cap Cana is in the east of the Dominican Republic, just 10 minutes from Punta Cana airport, the busiest in the country.
Cap Cana is the Caribbean everyone wants to experience—a master-planned community where unparalleled luxury meets the natural splendor of an island paradise.
But to call Cap Cana a “master-planned community” doesn’t cover it…
Cap Cana spans 30,000 acres. That’s more than twice the size of Manhattan. This is a veritable city state devoted to high-end luxury. It has over three miles of white-sand beaches and miles more of coastline. You have schools, world-class golf, a huge inland marina, a university campus, fitness centers, convention centers, one of the Caribbean’s finest equestrian facilities…a fire station, a clinic…and the Caribbean’s largest water park just opened, its amphitheater inaugurated by Elton John.
You also have dozens of high-end restaurants, and 72 miles of paved roads…100 miles of fiber-optic cable…
Villas and penthouses here sell for $5 million…$13 million…$25 million… (Read about that $25 million penthouse here.)
To date nearly $2 billion has been poured into infrastructure and facilities in Cap Cana. More is planned.
Development here is occurring on a monumental scale.
Paths of Progress of this scope in such inherently desirable destinations are rare. But when they happen, they always point to an incredible opportunity.
In fact, the development I’ve seen in Cap Cana is most reminiscent of what I observed over the past decade in Cabo…
This video gives you an overview of Cap Cana, a veritable city state devoted to high-end luxury.
I think of Cap Cana as “Cabo of the Caribbean”…with its immaculate ocean-front golf, a lavish St. Regis, a super-yacht marina, fine dining, and residents happy to pay millions of dollars for real estate.
I first scouted Cabo in 2014 and could immediately see the Paths of Progress transforming it,
Cabo had long been a playground of Hollywood and the ultra-rich. But in the mid-2010s, a number of factors converged there to create an enormous opportunity.
Investment was flowing into new infrastructure, particularly the roads and airport, making it cheaper to get to Cabo and easier to get around it. As Cabo became more accessible, what I call the “ordinary rich” began coming in greater numbers. Think doctors, lawyers, executives, self-made entrepreneurs, work-from-anywhere professionals, small-business owners…
Money wasn’t just pouring into infrastructure, it was also going into new ultra-high-end luxury resorts and communities. Major brands like Nobu, Four Seasons, St. Regis and others were pouring billions into new golf courses, hotels, and residential communities.
These resorts and communities were aimed at the ultra-rich. But in this rush to control the ultra-high-end segment, an important group was neglected…the ordinary rich.
These buyers and renters aren’t in the market for multi-million-dollar mansions, but they want luxury, resort-style amenities, and a perfect location…and they’re willing to pay to get it. Yet, there was a limited supply of best-in-class real estate to cater to these folks. (I recently wrote to you about the ordinary rich and their influence on the luxury travel market.)
My Real Estate Trend Alert group spotted this gap in the market and got to work finding the perfect real estate to appeal to these buyers and renters…condos and homes with high-end finishes and resort-style amenities in best-in-class communities.
With this strategy, RETA had hit after hit after hit in Cabo. To give you some brief samples…
- Boost of $388,844—Our first RETA deal in Cabo was in 2015 in the 5-star Quivira resort. Our RETA-only price on a two-bed ocean-view condo in the best-in-class Copala community was $336,156. I bought one. An identical condo to mine two floors above me later listed for $725,000. That’s $388,844 more.
- $250,000 Uplift—In August 2021, RETA members could get a penthouse in a community called Cabo Costa for $249,000. I got one. Today a penthouse in Cabo Costa lists for $499,000.
- $602,885 More—A RETA member bought a luxury villa in Copala, in the Quivira master-planned community in Cabo, for $385,115 in 2017. Earlier this year, I saw the same Copala villa listed for $988,000—that’s $602,885 more.
Today, in Cap Cana, I see the same powerful Path of Progress events: increasing accessibility…more high-end resorts moving in…and the ordinary rich beginning to discover this destination…
And like in Cabo, thanks to the collective-buying power of my Real Estate Trend Alert group, I’ve managed to secure an exclusive off-market deal in Cap Cana for RETA members…for exactly the kind of real estate the ordinary rich want.
This RETA-only opportunity is to own incredible luxury condos a short stroll to the incredible beach of Juanillo, in one of the best locations in all of Cap Cana…
And yet our RETA-only price is nuts! I’m expecting gains of $275,000 five years after delivery. And I’m buying right alongside RETA members…
I’ll be sharing more about this opportunity in the coming days…
Cap Cana reminds me very much of Cabo, where I own a home and spend a lot of time. It’s got the immaculate luxury, oceanfront golf, incredible dining, marina, yachts, sports fishing…
Here’s the thing I really like as a conservative investor…
There are super strong fundamentals underpinning the Dominican Republic’s rise to luxury stardom. Big money doesn’t invest in places just because the beaches are nice or the roads are smooth…
The big resort brands like that the Dominican Republic is politically stable and doing lots of smart things to incentivize investment across a range of sectors. They love that it is strategically located, easy to get to with stunning natural beauty.
The Dominican Republic is a very appealing place for investors…be they huge global luxury hotel brands or ordinary folks like us…
Buying the right real estate here is the essence of a Path of Progress play. That is, getting in at the right time in a place on a major upward swing of development.
Ronan McMahon, Founder, Overseas Dream Home & Real Estate Trend Alert
P.S. Have a question about the Dominican Republic or Cap Cana? Something more general about owning overseas? I’d love to hear it. You can share any questions or comments here.
Here’s one I got from an Overseas Dream Home reader…
Patricia A. asks: Hi Ronan and team. I love looking at the communities that you feature in RETA, but one thing that I believe that is crucial are the maintenance costs of a property in a development, usually covered by the Home Owners Association, or Condominium Owners Associations. Sometimes these costs are hefty.
Ronan says: Hi Patricia. This is a great question. Just as in the U.S., HOAs are common in residential communities abroad. But there is one significant difference: HOA fees are typically lower overseas. A lot lower…
In states like Florida or California, HOA fees in amenity-rich communities often cost $500, $800, even $1,000 (or more) per month.
Compare this to what you’ll pay overseas…
For example, members of my Real Estate Trend Alert group had the opportunity to buy in a best-in-class community in Cabo called Monte Rocella. The planned amenities include an infinity pool, spacious sun deck, bar areas, relaxing lounge areas, co-working space, yoga decks, and a well-equipped gym.
Yet the HOA fees for Monte Rocella are set to be just $1.90 to $2.60 per square meter per month. That means that for a 1,064-square-foot condo (the size of our two-bed, ocean-view condos in Monte Rocella), your HOA fees would be just $257 per month at the high end, or $188 at the low end.
That’s a fraction of the cost you’d pay in a community of this quality in the U.S.
Or consider my condo on Portugal’s Silver Coast… I bought my condo in Praia D’El Rey, an incredible community, right on Portugal’s Atlantic coast, a few years back for €300,000. My HOA fees in this best-in-class community are just $263 per month.
Of course, HOA fees can vary widely depending on the community, both in the U.S. and overseas. But you’ll find that, on average, HOA fees overseas are significantly lower than in the U.S., often to the tune of thousands of dollars less per year.
