SANTO DOMINGO- Renting an apartment for between RD$15,000 and RD$20,000 in Greater Santo Domingo is now a thing of the past, due to the increases that long-term rental properties have registered in different sectors.
“The increase in rents isn’t new; since the pandemic, it has increased exorbitantly. A rental in the million-peso area that used to cost around 20,000 pesos now costs 45,000, 37,000, or 40,000,” says Alenny Garabito, whose company, Time Homes, is dedicated to property management.
He goes on to say that in "La Independencia, which was an area that maintained more or less reasonable prices, you can't find a property for less than 30,000 pesos, a one-bedroom apartment for 29,000 pesos, really very high.".
In the case of Villa Mella, along Jacobo Majluta Avenue, where prices used to range between 13,000 and 15,000 pesos, it is now difficult to find installments like that; they have risen to 22,000 pesos. Meanwhile, in the Eastern Zone, they are also surprising with prices that until now were reserved for the metropolitan area, adds the real estate advisor.
Claudia Castillo, from Plusval Dominicana, estimates that the properties her company manages have experienced increases of between 15 and 20%, although, as there is currently a lot of supply, some owners are considering reductions in order to sell them quickly, she explains.
One reason Castillo gives is that last year banks adjusted interest rates, and some landlords found themselves needing to increase their tenants' monthly rent. "That happened to me with two clients; that was their reason.".
Another argument used by landlords to justify the increase in rental prices is the rise in construction materials because many of the apartments are new and therefore they have set high rental prices from the start, says Castillo.
“The truth is that in the central industrial park prices are frightening; areas on the outskirts are more manageable, but at all levels they have gone up,” Castillo says.
Maika Maldonado, from Premium Real Estate, doesn't understand the "crazy increase," because the market is saturated with rentals, mostly for Airbnb. She observes that the search for rentals has skyrocketed, mostly in the mid-range and lower price brackets, a situation she attributes to the fact that many clients are finding it difficult to buy property again due to rising prices, and are therefore opting for rentals.
"That's why I believe that's the reason for the increase. I have suggested to my clients that we should establish an average for their rental properties, as well as find a price that doesn't stray too far and allows them to keep their properties occupied, without going so low that they don't feel comfortable with what they expect to receive.".
Garabito notes that the increases have been most pronounced in properties priced in pesos. “I think the price hike is most noticeable in apartments priced in pesos, because in dollars, especially for higher-priced ones, prices remain the same. But for those renting between 20,000 and 40,000 pesos, the increase has been incredible; it's unthinkable to look for an apartment in places like Naco, Piantini, Serralles, Evaristo Morales, El Millón, or Ensanche Quisqueya.”.
“Here at Time Homes, where we manage properties, we have apartments near the university area that we used to rent for 8,000 and 9,000 pesos, but now they are at 15,000 and 16,000 pesos.
Similarly, apartments that were priced at 20,000 are now at 30,000, and those that were 1,000 dollars are now at US$1,300, "and many one-bedroom apartments for rent.".
High rents make the vetting process much more complicated, says Alenny Garabito, "because it is necessary to investigate the financial solvency of the spouses.".
Maintenance fees are another possible cause that Garabito sees, citing the case of an apartment he rented for 30,000 pesos in Evaristo Morales, where the monthly fee is 5,000 pesos. “In Jacobo, I have several properties that we manage, and the maintenance fee is around 3,400 pesos, and there’s no generator or anything, so that drives up the cost.”.
New rental law
Regarding the recent rental law approved in its first reading by the Chamber of Deputies, Garabito states that it is another challenge looming for real estate agents and hopes their voices will be heard, because he understands that there are aspects, such as the single deposit, that are not convenient.
“A deposit is not enough, for example, to cover the condition of an apartment when it is vacated. Many times people leave without painting and without fixing details.”.
Add to that the deficiencies of the public system, which means that in a home one has to incur additional expenses such as a water tank, cistern, electricity, generator, security.
“If security were better, we wouldn’t have to put up so many bars, and the minimum you have to spend to put up a bar is 60 or 70 thousand pesos, so one month’s deposit isn’t enough. There are tenants who are very good, who leave the property in good condition.”.
