Investments in resort communities
Are you a DIY person or do you like assistance on site?
This is just one of the many options discussed on this thread which goes back to December 2007 but is still going very strong. It brings to the table the concept of buying a property within a resort community where services charge are payable and help and assistance is on call 24 hours a day, 7 days a week, as oppose to ‘going it alone’. As you might expect the idea of paying for often simple services has prompted a number of very different views and comments!
In simple terms the thread seems to be split between those who want to buy an investment overseas (Egypt is the example in the thread) where everything they will ever need is catered for, and those who prefer to go it alone and buy away from the growing resort communities. There are obvious pros and cons for both but a lot of it seems to come down to an understanding of the language, local community and confidence in the investor’s ability to actually get simple things done such as plumbing fixes, etc.
There is also an interesting angle from one of the posters which suggests that the resort community feel and the fact services and assistance is available on site will actually increase the attractions and ultimately the value of a property. The growing clamour for overseas property homes has seen many relatively inexperienced investors purchase property away from their domestic markets with little real understanding of the local culture and way of life. These are the investors who may well pay a little over the odds for a resort based property, but then there are those who are more than happy to look after themselves and like a challenge!
Summary
Resort or no resort that is the question……….
This post brings a number of interesting factors to the investment table and has actually split the investment community between those who want services and assistance to hand and those who are confident enough to go it alone. There is ample input from both camps and this makes for a very interesting and information thread.
One factor which stands out from the thread is the fact that a growing number of investors are looking at overseas property with little knowledge of how the process works. These are the investors who would probably benefit more from a resort community arrangement where assistance is there at any time of the day or night. This helps to build up a trust factor between the service providers and the home owners, to the benefit of all in the resort.
The fact that you are likely to pay a little more in initial cost and service charges for a resort community venue seems to pale into insignificance for many investors who would rather have that added security at a reasonable cost.
Those who are more aware of how the local customs and culture works, where ever they may be (Egypt is the area mentioned in this post), are able to go it alone and choose from a wider spread of potential investments. There is the opportunity to shave a little off the cost of the property by moving off the beaten track but there are obvious risks. Resort communities tend to attract an awful lot of expats and can be a useful way for new investors to become more integrated into life in the area. The fact people are willing to pay a little extra for a resort community property also reflects the value of support and assistance.
After four years of marketing Egyptian properties and spending 23 years in and around Egyptian Red Sea tourism, I think I know a little about what is happening here in Egypt.
With the current economic slowdown, Egypt still offers a great deal of investment potential. However, repeated attempt to ratify the registration issues in Sinai and the inability to regulate the practices of both developer and agents, leave clients little incentives other than to hold their purchase options until the Egyptian Residential Tourism Industry gets its act together.
There are many good projects in Sinai and Mainland Egypt. There are some very good developers using experienced and meticulous agents. Egypt has some very happy buyers, making income from rent. Many prefer the option of keeping their properties private, using genuine "key-holders" to look after properties in their absence.
From experience, the best renting options are those with reputable Hotel management. Residential developments with no hotel management will often lead to rogue agents renting to low wage earning workers. Over a period of time these often leave apartments in a distressed state of repair. Income is considerably reduced.
Owners have to realise that most tourists only stay a short while. Most use hotels with their full compliment of services. Many take All-Inclusive breaks and don't want to clean and cook in apartments not designed for such options. Owners must remember, Egypt is a fledgling country with little or no experience in managing residential complexes and are not attached to the International Tour Operators on the scale needed to fill the 800,000 residential properties the government wishes to build on the Red Sea Riviera over the next ten years. 300,000 registrations already need full judicial deeds of entitlement. With the increased load, overseas registrations will continue to block the system. Ownership for rental income in an unregulated system may not be as good investment as one would wish.
The concept of build at any cost, (usually at the client's cost) especially Sinai developers are now finding the financial crisis hitting their own cash-flow. Some have ceased to continue building, not able to find new cash-buyers. Many may just wait for a turn-around in the market. Many owners will prefer to off-load properties and off-plan registrations for a quick profit, only to find everyone doing the same. It will create a “Buyer’s Market” as we in the UK saw in the late eighties. Negative equity is fast becoming a reality in Britain. It could happen worldwide.
Where does that leave projects and the buyers with half-built homes?
Well, as I see it first hand here in Sharm El Sheikh, they are being left unattended and the resorts incomplete. It does not help that the Government offers no financial incentives such as mortgages and long term loans that offer developers a means to finish projects. I'm sure Egyptian officials think there is a never ending supply of cash in overseas client savings accounts. I wish I could make them understand that the competition is greater now as African and Middle East countries and other tourist destinations offer more choice and safer options.
The choice of location is still a number one priority to any prospective buyer. Mainland Egypt is freehold and up to half the cost of buying in South Sinai. Even though I have some of the better Sinai projects, more and more clients see Hurghada and Marsa Alam as better options.
I follow the current trend. Without full ownership and finance in Sinai, I offer some prestige developments for Mainland enquiries
Now the question is "will Mainland developers become as greedy as those in Sinai and spoil what can be a good industry, in a new emerging market"
The important issue for buyers, as money becomes harder to obtain, is to “do your homework and ASK QUESTIONS of the developers and their representatives.” We really do want to satisfy our customer’s needs and requirements, so that you keep coming back to Egypt. It’s a wonderful place.
Our focus is Panama, Costa Rica, Belize and Nicaragua where the majority of real estate sales to North Americans are within resort communities. The communities sell themselves on the the kind of lifestyle that comes with the resort. In Central America the main draws are golf, surfing, horse-riding, boating and scuba diving. Real estate developers go to great length to incorporate these options in their masterplan design.
All over the world, developers are busy converting & building one of the hottest concepts in the lodging and real estate industries – condominium hotels. In almost all cases these complexes typically include a hotel, residential units for sale, office space and retail stores. In my opinion, there are 4 main strategic reasons for this phenomenon.
Luxury
Luxury condo living now is in strong demand across the whole world. Those condos fulfill certain criteria for top notch buyers and renters; high quality lifestyle, stunning views, top-notch locations, and world class amenities.
Safety & Security
Without question, safety issues have changed forever. The need for greater building safety was being countered by the demand from residents and tenants that their properties be easily accessible, or have low level safety standards. The demand for a minimum level of safety, a 24-hour monitored security and security staff is not any more a privilege, it is now a must.
Exclusive
There is no question about it: we are willing to ante up more money for an exclusive luxury condominium that provides us with our own state of the art amenities. Exclusive is important because we are renting & buying into a lifestyle that we feel it is unique and private, and the exclusive luxury is an extension of that lifestyle.
Professional
We prefer to be satisfied and pampered and feel that our needs are on the top of “Top Priority” and differentiation. We need to have an in-house all up-to-date professional facilities and services, whether it a professional property management services or concierge services.