A mortgage. DR banks offer mortgages to both residents and non-residents, though terms for foreigners are typically less favorable (higher rates, lower LTV). Most foreign investors buy cash.
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ADR (Average Daily Rate)
The average rental income earned per occupied night. In Las Terrenas, a 2-bedroom averages about $118/night across the year — roughly $124 in peak season, and up to about $198 with an ocean view. A key input in calculating a property's revenue potential.
Acto de Venta
The final deed of sale, signed before a notary, that transfers legal ownership from seller to buyer. The equivalent of a closing deed in the US system.
Apartamento Turístico
A tourism-classified apartment, often qualifying for CONFOTUR tax incentives. Classification affects both tax treatment and permitted rental use.
Bien Inmueble
Legal term for real property (land and anything permanently attached to it). Used in all formal documents and title registrations.
Cap Rate (Capitalization Rate)
Net Operating Income divided by purchase price, expressed as a percentage. A 7% cap rate on a $300,000 property means $21,000/year NOI. Standard benchmark for comparing investment properties.
Cash-on-Cash Return
Annual pre-tax cash flow divided by total cash invested. Accounts for financing costs, unlike cap rate. More relevant metric for leveraged buyers.