By Randall White
President
Mind's Eye Marketing
Welcome to the first of a series of opinion columns designed to help Business Edge readers make well-educated decisions regarding investment in recreational real estate.
The international recreational/ resort real estate market is HOT! Let's face it, virtually everyone who has purchased property from a respectable developer in a prime vacation destination in recent decades has experienced tremendous appreciation of their investments as well as a dramatically improved quality of life.
The well-publicized transfer of trillions of dollars of equity and disposable income from the
previous generational to well-educated and lifestyle-oriented Baby Boomers will continue to drive excessive demand.
High-quality, unique yet affordable developments are already in short supply. Contrary to many North American press reports, quality projects in great locations have not been devastated by the subprime crisis. Weak projects, on the other hand, where demand was driven by investors looking for a quick buck that are severely overbuilt and have virtually no demand of lifestyle investors are in serious trouble.
When purchasing recreational property, evaluate your investment, investigate the region, research the demand/supply ratios and the developer. Value is based on these critical factors – not on how far their price has fallen so far.
Indeed, investing in high-quality recreational real estate has always made plenty of sense (and dollars). And with the strength of the Canadian dollar and decreased competition from American buyers there truly has never been a better time to buy for Canadians.
Six years ago today (May 9), the Canadian dollar was under 64 cents U.S. Today's valuation of 99 cents against the greenback, gives your loonie a staggering 55% more power when buying property in the U.S. or in Mexico, where homes are listed in U.S. dollars.
The adage "buy land, they're not making anymore" holds true, but not all land appreciates equally. Ocean-view land is obviously much more scarce than land in the middle of an arid desert or a frozen prairie.
Anyone who has lived in Canada for the last eight months will appreciate a region such as Cabo San Lucas with year-round great weather, 300+ days of sunshine and daytime highs consistently in the high 20s or low 30s. The reliable weather means you can enjoy your property year-round … or rent it out to tourists at virtually any time of year.
Your property won't hold the same value if you buy in a region that is too hot to enjoy in the summer and/or too cold in the winter, particularly in an area like Phoenix/Scottsdale where there is a massive surplus of inventory and a dearth of interest from educated buyers. Always evaluate claims of four-season property in light of the spring and fall seasons which may have virtually no occupancy.
Cabo San Lucas is an emerging region and a preferred destination of the rich and famous for good reason. The weather is perfect, the scenery breathtaking and the activities endless. Add to that the tremendous value as an investment and you have a clear winner.
For more information, email info@PortusCanada.com, or call 888.401.8268 (toll free) or 403.401.2288.
