Posts tagged Tourism Industry
What Everybody Ought To Know About Real Estate Investing In Central America
Feb 1st
1.Determine what market is right for you and focus there
Good investments can be found in every market but whether a particular market is right for you will depend on your investment goals – do you have a speculator’s stomach? Do you want immediate access to amenities and a sense of community?
As a general rule, regions at earlier stages of a property development curve will have a higher potential for rapid capital appreciation than more mature areas but investments here will also have a higher inherent market risk. In more mature markets, the infrastructure will be better quality and the tourism industry and associated amenities more developed providing more potential for rental income.
Choose the risk/reward profile you are comfortable with and set your investment goals early. As Garry Keller notes in The Millionaire Real Estate Investor, when researching investment opportunities: “Think powered by a big why”.
2.Don’t believe the hype
In Central America there is no overarching multiple listing service (MLS) for real estate and no centralized tracking of the price properties have sold for in the past. There is no local equivalent of http://www.zillow.com for the regional real estate market. This means that the market is particularly prone to exaggeration and hype, sometimes in both directions.
Build a good network that will allow you to triangulate and contextualize information that you receive, learn from professionals and be skeptical about claims that you can flip your property for 100% more “when the next real estate tour come into town in a few weeks.” A solid piece of advice is to buy only what you see. Make up your mind on the inherent value of the property you are looking at. Don’t factor in the “new coastal road” the “new airport” the “new Marriott” into the price.
3.Understand the link between tourism and real estate
Across Central America, the areas that attract most tourism numbers also generate the highest levels of real estate activity. Add data on tourism rates into your research and seek out areas that are experiencing growing numbers of tourist visitors. It is a safe bet that real estate dollars will follow close behind.
If you dream of a vacation home in the truest sense of the word, a property that you can enjoy right now and not sometime in the distant future, then seek out established tourism destinations. You will also find that rental returns are highest here.
4.Choose a good attorney
The general level of credibility and professionalism that attorneys exhibit can vary considerably between different countries. Attorneys in Belize, for example, have a high professional standing while in other countries real estate investors have experienced shady practice from attorneys they have chosen. It makes sense to find an attorney who speaks English (unless of course you are fluent in Spanish) and who commits to keep regular communications with you throughout the due diligence and closing process. Remember that you may be out of the country over this period and communication via email may be crucial.
In some countries it is possible to get a good list of attorneys approved by major title insurance companies. You are free to choose from the list whether or not you decide to take out title insurance. (For more on title insurance see below). Real estate developers have been known to try and persuade buyers to use their own legal team for property purchasing. Our advice is to employ independent legal advise at least to review (if not draw up) the purchase contract you are signing and check the title history on the property.
5.Make title insurance a non-negotiable
We recommend taking out title insurance for all your purchases in Central America. Though the process can at times be bureaucratic and cumbersome (and realtors like to remind you of this) it can unearth potential problems with your title before it is too late. Seeking title insurance will force your attorney to delve deeply into the title history of your property and follow a set of criteria in their reporting. Seek out well established title insurance companies that have a track record of offering polices in Central America, such as Stuart Title or First American. With both of these companies your insurance policy will be paid for in the US and any claims are made to the company in the US.
6.Don’t assume you can finance your purchase
In many Central American countries it can be very hard to obtain a loan from a local bank and, where it is possible, the interest rates are not competitive to the US and terms can be unfavorable. Panama stands out in this regard as competitive financing is relatively easy to obtain. In most countries you can normally find private lenders offering loans based on refinancing US assets and an ever increasing number of developers are offering owner/developer financing although this number is still small in absolute terms.
7.Give something back
The strap line of Las Fincas a development project in Nicaragua designed using sustainable development principles is “invest with confidence…develop with a conscience.” Investing responsibly makes a great deal of sense both for the country as a whole and for your individual investment. Central America is a warmhearted region welcoming to international visitors. In order for this warm feeling to endure into the future, local communities need to benefit from the real estate and tourism activity that is going on in the country. As the community grows and develops so the foundation for real estate becomes more solid and sustainable.
Invest In Costa Rica’s Paradise
Nov 9th
The Costa Rica Real Estate Investment Fund, though still fairly new in the international real estate industry, is currently gaining leverage at an impressive pace. Costa Rica is a developing country per world standards, but the growth of the economy and the tourism sector during the past years have contributed to its steadily rising hold in the real estate market. In fact, there is significant activity in real estate improvement anywhere in the country although it is the Province of Guanacaste and the Central Valley that have had the biggest share in the developments so far.
The tourism industry has helped much in giving more profitability and recognition to the Costa Rica Real Estate Investment Fund. More and more tourists have discovered the hidden wonders of Costa Rica and have found the quality of life in this coastal country to be quite good. Statistically speaking, it has about six percent (6%) of the entire world’s biodiversity. This place is ideal for biologists, environmental researchers, as well as nature loving tourists since twenty three percent (23%) of this country is composed of protected rainforests and mountain areas.
Now, people not only flock to Costa Rica to experience its relaxing atmosphere and laid-back lifestyle just once, but also to buy properties as investments. As there are a great number of things to do in such a small country, more foreigners have started to recognize the manifold attractions and are consequently determined to purchase real estate properties. As a result, the Investment Fund is progressively advancing, and can only be expected to advance further in the coming years.
Much of the growth in the Guanacaste Province can be credited to the nearby Liberia International Airport. The major beach stops in Guanacaste being a mere 25 minutes from the Liberia International Airport, this prime destination is both accessible and attractive. The commercial real estate leaders in these areas are top class hotels that cater to the tourists, like the Four Seasons Resort Costa Rica, Hotel Paradisus, and Hacienda Pinilla.
Also, the Guanacaste area is renowned for its spectacular beaches, and the assortment of water sports and other outdoor activities which can be enjoyed. Tourists and locals can get pleasure from surfing, scuba diving, bird watching, and river rafting. For the more adventurous, the mountain ranges of Guanacaste are a thrilling alternative, with a stretch of rain forests and volcano chains.
The presence of foreign investors have been chiefly advantageous in proliferating the developments in the real estate sector. Today, there are world-class malls, hotels and resorts, soaring residential compounds, condominiums and villas, and luxurious golf resorts for the high-end market. Such investments play an essential role in turning erstwhile rural areas into areas of commercial interest, thereby increasing the real estate business in this country.
The Costa Rica Real Estate Investment Fund may be new to the scene, but surely with a lot to market in this steadily developing country, there is no reason why more advancements should not find their way into the inviting shores of Costa Rica.
