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International Living Postcards-- Saturday Edition

Saturday, April 30, 2005
Paris, France

Dear International Living Reader,

Ireland in the '90s, thanks in large part to a young European Union, saw real estate prices increase 500% to 600% in less than 10 years.

Two years ago, pieces of sandy coast on the Costa Maya doubled in three years mostly because the Mexican government aggressively developed this area to attract tourists.

Earlier this year, triggered by an improving economy, prices in Romania were up 50% in six months.

Every real estate market has a trend. Identify it, commit to it, ride it upward…and that's money in the bank.

No, it's not that easy. The earlier you get in (or think you've gotten in) on a trend, the greater the risk--and identifying a trend should be only part of your overall investment strategy. At a minimum: Find where the government plans to improve infrastructure (new roads, new train routes, new airports, expanded air service), educate yourself about the local economy and politics, and identify a (preferably growing) group of buyers your piece of real estate will appeal to.

Nicaragua is the Next Costa Rica, Croatia is the Next…Croatia

In the early '90s (when real estate was valued at in some cases 10% of its current values), Costa Rica lured foreign tourists and investors to its shores with marketing campaigns and incentives for retirees, its abundant natural beauty and stunning Pacific coast…coast unequaled anywhere in the world…until you look immediately north.

Nicaragua has the same Pacific coast, the same exotic nature (better, in my opinion), more and better retiree incentives, a lower cost of living, a safer standard of life, less bureaucracy, improved and improving infrastructure, and a government committed to attracting foreign tourists and investors. Can you identify the trend?

International Living called this one a looong time ago. Now others are jumping on board this band wagon. A sign that this market is moving into a next phase of its cycle. Conde Nast Traveler et. al may be a little late to the party, but International Living readers already invested sure are happy to see them turn up.

And it's not too late to position yourself in this market. For example, plans have just been revealed for a new international airport on Nicaragua's currently inaccessible Atlantic coast, which would finally open up this until-now overlooked region of this country.

Some property markets have established cycles (New Zealand's property market goes through seven-year cycles), and others have cycles thrust upon them. Dollarization in Ecuador, the peso crisis in Argentina, the conflict in Croatia…

Croatia has become a hot destination--again. Early last century, kings and queens, movie stars and moguls flocked to its unspoiled shores and fabled seaside towns. Before the conflict, a half-million British tourists visited Croatia each year. In the nine years since the conflict ended, that number has edged its way back up, but today stands at only a quarter what it was in this country's tourism heyday. Now tourists are returning to Dubrovnik and the Dalmatian Riviera in force. The Croatian government is intent on marketing the country as a top-end destination--it's often compared to Tuscany. Iva Zaja of Croatian Sun is the contact I recommend for the Croatian real estate market.

Lief Simon
Real Estate Editor, International Living

P.S. We're bottom-dwellers, we international real estate investors, always in search of the next market in the basement. For it is a market at its bottom that offers you the greatest opportunity for investment profits. Identifying ups and downs…booms and busts…cycles…this is my beat at Global Real Estate Investor. Take a look.