Short answer: a real estate feasibility study tells you whether a site is worth buying and what to build on it before you commit capital. It covers market, site and permits, costs, revenue, cash flow and risk. The most useful way to read it is backwards: start with the residual land value (what the project can afford to pay for the land after costs and your required profit), then see how fast that number disappears when sales prices fall or costs rise. In the Dominican Republic, two things deserve extra weight: permit timing and the fact that public price data is asking-price data, not closing-price data.

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What is a feasibility study, and what decision does it support?

It is the document that answers one question before the big spend: proceed, adjust, or walk away. The generic framework tests technical, economic, legal, operational and scheduling feasibility, and treats market evidence as one of the most important sections, since a project without enough market generally should not proceed (Wikipedia, Feasibility study). Lenders and investors read the same document to judge expected returns and risks in one place; a 2025 practitioner guide (updated May 2026) frames it that way too, though it is consultant content rather than a standard (GrowthFactor).

For a foreign investor or a fund evaluating a Dominican project, the study is also the fastest way to compare a local sponsor’s assumptions against what you would underwrite at home.

What sections should a development feasibility study contain?

The same guide suggests a contingency of 5% to 10% of the total budget and stress tests on interest rates and construction costs (GrowthFactor). Treat that as a general benchmark, not a Dominican rule.

How do you read the residual land value?

Start from what the project will sell for, subtract everything it costs to build and sell, subtract the profit you need, and what is left is the most the project can pay for the land (and for carrying it).

Hypothetical example (own calculation, not a real project or quote): 24 villas, 180 m² saleable each (4,320 m²), sold at US$3,000/m².

What this table shows that a “price per square meter of land” never does:

1. Land is the residual, not the starting point. If the seller asks US$2.0 million, these assumptions do not support it. You change the product, the price, or the land price.
2. A small miss erases the cushion. A 5% lower sales price removes US$648,000 of revenue (about US$609,000 net of the lower sales cost), leaving roughly US$949,000 for land and financing. A 10% rise in hard costs adds US$675,000 before knock-on effects on soft costs and contingency. Both together leave roughly US$274,000 (our calculation, ignoring the knock-ons).
3. Efficiency is a profit lever. Saleable-to-built area is an assumption; every point you gain in design is revenue you do not pay to build.

Which permits belong in a Dominican feasibility study?

The study should map which approvals are needed, in what order, from whom, and how long they may take, because time becomes financing cost. Sources describe a chain of approvals rather than a single filing:

• Land use (municipality): determines whether the plot can be residential, commercial, mixed or industrial under zoning; one guide cites Law 176-07, art. 19 (inmobiliario.do, January 2026).
• Environmental authorization (Ministry of Environment): Law 64-00, art. 38, requires prior environmental evaluation for projects with potential impact (inmobiliario.do).
• Construction license (MIVHED) and plan review: filed through the one-stop construction window (Ventanilla Única de la Construcción). A June 2023 press piece reported roughly 60 to 120 working days depending on complexity, and listed required documents including title, certified survey plans, an environmental certificate and, in tourist poles, a land-use no-objection from the Ministry of Tourism (elCaribe, June 2023).
• Add-ons by project type: mining, aviation height, fire and health, water and power (inmobiliario.do).

Timing is the soft spot. A civil engineer quoted by El Día in July 2026 put municipal approval at 1 to 2 months and technical design at 3 to 4 months, and called environmental approval the slowest stage; the same report says permitting can take close to a year before works begin (El Día, 29 July 2026). That is one source’s view, not an official statistic. Practical takeaway: run the cash flow with a longer permit case than the process promises.

How reliable is the market section in the Dominican Republic?

Only as reliable as the work behind it. All public prices are asking prices. The largest published sample with a stated method is CLIC Inmobiliaria’s, with a data cutoff of 23 June 2026: a median US$2,278/m² for Punta Cana–Bávaro (12,854 apartments) and US$3,465/m² for Cap Cana (1,294), described by the source itself as asking, not closing, prices (CLIC, July 2026).

Other signals, each with its limit:

• New-build US$2,600 to 3,100/m² versus resale US$2,000 to 2,500/m² as of June 2026 (LatinVestor).
• An estimated 4 to 6 months of inventory for well-located finished resale, versus 8 to 12 months for generic new-build condos, with 15% to 25% of listings needing a price cut, incentive or negotiation room (LatinVestor). These are the author’s estimates, not official counts.
• No official price index and no public absorption data by project. A credible study replaces them with fieldwork: sales-room calls, actual payment plans, units sold per month at comparable projects.

The point for an underwriter: distinguish generic from differentiated product. If the study borrows the absorption of a prime-location building to model a generic one, the cash flow is wrong however clean the spreadsheet.

What should the sensitivity analysis test?

Keep it short and brutal. Move each variable alone, then together.

Rates are moving. The Central Bank raised its policy rate to 5.50% on 30 September 2026 (Diario Libre). A CLIC guide dated 1 July 2026 says banks typically finance 50% to 70% of value for non-residents, at roughly 9% to 13.5% (CLIC), which matters for how your buyers can close.

Which 2026 tax and legal changes should the study reflect?

Law 30-26, promulgated on 18 June 2026, creates a single and final 10% tax on real estate capital gains for individuals, phases out the 2% mortgage-related tax (2% in 2026, 1% in 2027, 0% from 2028), and bars a taxpayer from combining more than one incentive regime for the same activity or operation. The capital-gains base is awaiting regulation, and the tax authority had not issued a general rule on the incentive restriction (inmobiliario.do, 24 June 2026).

Two consequences for the study. Model the end-buyer’s exit net of the new tax and avoid presenting a net gain as certain while the base is undefined. And if the project relies on CONFOTUR (Law 158-01), have counsel confirm no other incentive stacks; the tax authority’s help page lists CONFOTUR exemptions covering income tax, real estate transfer taxes and the real estate property tax for approved tourism projects, under conditions, with benefits lost on later transfers to third parties as the law provides (DGII).

For overseas investors: a 2021 note from law firm GGI states there are no restrictions on foreign individuals or entities owning real estate in the country, with local tax registration required before registering a purchase. It is dated, so confirm current requirements with local counsel (GGI, July 2021).

Pre-purchase checklist

• [ ] Title verified at the Registry of Titles; no undisclosed liens.
• [ ] Land use confirmed in writing by the municipality (height, density, setbacks).
• [ ] Environmental route defined; realistic timeline built into the cash flow.
• [ ] Soil study and survey available; flood and coastal-strip risks reviewed.
• [ ] Utility availability and connection costs confirmed.
• [ ] Residual land value computed in three scenarios and compared with the asking price.
• [ ] Sales pace and payment plan benchmarked against comparable projects.
• [ ] Peak cash need identified, with a named funding source.
• [ ] Option or purchase promise conditioned on permits, if the seller accepts.
• [ ] Legal and tax review of the structure (trust, CONFOTUR, Law 30-26).

FAQ

How is a feasibility study different from a market study? The market study is one section, and the most important one. Feasibility adds site, permits, costs, cash flow and risk, and ends in a decision.

When should it be done? Before closing on the land, or inside an option or due diligence window the seller grants.

What if the residual land value is below the asking price? Four moves: renegotiate the land, change the product, differentiate to earn a higher price, or pass. Forcing assumptions until it fits is not one of them.

Can the study be used to raise capital? It is the base of the business plan investors review, although they will ask for more documents. See our guide on raising capital for a development in the Dominican Republic.

Does a feasibility study guarantee returns? No. It tests assumptions; it does not remove market, cost or permit risk.

Need help?

Netix works with developers from site review through to sales. Its page on real estate project creation describes a four-stage process (initial consultation, project analysis, conceptual design and project development), and its capital raising page lists technical and legal review of land or project, a basic market study and an executive summary. If you are evaluating a site, that is a place to start.

For information only; not legal, tax or financial advice. Numerical examples are hypothetical and our own calculation. Figures as of 13 October 2026.