Ever wonder why international real estate investing is so successful for some people and doesn’t seem to work as well for others?
Well it’s got nothing to do with natural talent and everything to do with setting a clear investment goal.
I learned this the hard way.
When I started buying property in Nicaragua in 2002 I made the mistake of not defining my goals well enough. I just had one word that guided me: “cheap.”
But sometimes cheap isn’t a good deal. A cheap property may just mean that it is located in an area with little going for it, or the property itself is uninspiring.
Using only the purchase price as a guide to what I should buy was a flawed strategy. “Cheap” did not adequately describe all that I wanted to get out of my property investments.
What’s your agenda?
You need to bring greater clarity to the process of defining your goals. Then you can seek out locations and properties that serve them.
Here are some scenarios to get you thinking:
If you’re buying for capital gain you’ll seek out locations that are still relatively undiscovered but which for some clearly defined reason are on an upward development path (e.g., tourism growth, a new road, improved infrastructure, or major hotel). Timing is everything when it comes to this kind of investing. The idea it to get in early at a time when demand is low (and subsequently so are the prices) but where it is reasonable to expect that demand will grow over time.
If you’re buying a primary home you’ll be making sure certain services and amenities are available. Questions such as community, safety and cost-of-living will be important to you. A turnkey property will make most sense if you are planning a move in the short term. If you’re looking not for retirement but for adventure and reinvention, you’ll want to ensure you can fund your overseas lifestyle.
If you’re buying to retire overseas you’ll typically place emphasis on issues of security, availability of health facilities, access to urban centers and nearby neighbors. You may want to buy in a community where you’ll feel at home and can take part in activities you enjoy. If you have a strict budget, tied to a pension you’ll want to crunch the cost of living numbers.
If you’re interested in the vacation rental market you’ll focus on key tourism canters that provide access to amenities for your tenants. Getting a low-hassle home with all the modern conveniences will also be important. The best buys are bought with an eye to both maximizing rental return and positioning yourself for long-term appreciation.
The big opportunity
Some goals are more orientated towards financial profit; others focus more on lifestyle. But you can find neighborhoods, properties and investment opportunities that deliver on both agendas.
We want to draw these out because that’s the big opportunity that investing in real estate overseas offers: Finding neighborhoods where you can combine a profit and lifestyle agenda. Places where you can meet both your personal and investment goals.
How about you? What’s the main thing you’re looking to get out of your investment? Is there an investment goal you don’t see here? Contact us and tell us all about it.
P.S. Are you subscribed to the Insider Tips Series for Nicaragua real estate investors?
If not, click here to sign up receive valuable information about buying strategies, the best locations and neighborhoods in Nicaragua, plus tips on negotiation, real estate legal issues and the property buying process.