Resort real estate is always in high demand
Many consider purchasing resort real estate to be an extremely easy and high-income type of business. This belief formed in the 2000s, when housing prices were rising uncontrollably and the number of tourists was constantly increasing.
Events in recent years have shown that this business is not risk-free and, like other areas of activity, requires a certain theoretical preparation and business savvy.
The most important thing is to make the right choice of country and resort area. It is necessary to find a sweet spot between popularity and current cost. The investor's task is to determine the potential for growth in the number of tourists in the region over the next 5-10 years.
Among domestic resorts, Sochi appears the most promising, due to the hosting of the 2014 Winter Olympics here. Hotels will not be able to fully satisfy the demand from foreign tourists who are willing to pay substantial sums for accommodation. And in the summer period, the influx of vacationers only increases every year.
A suitable property for investment can be found by contacting a Sochi real estate agency, which will provide a list of available housing with average rental cost in the desired area, distance to the coast, and infrastructure assessment.
European countries in crisis also provide a good investment opportunity. This primarily refers to Greece and Spain, but housing in Italy and Portugal may also become cheaper in the near future. It should be noted that this is a fairly long-term investment, as the flow of tourists to these countries will be small in the near future.
But investing in relatively prosperous countries and prestigious resorts is not worth it, unless you are professionally engaged in the tourism business. The payback period for such projects is measured in a good dozen years, and the entry barrier to the market is very high.
Many people, for whom purchasing resort real estate is just a way to diversify assets, believe that it is enough to simply buy an apartment or house, and money will automatically flow in during the season. However, to get an adequate return after investing $100,000 in the purchase, one must not begrudge an additional $10,000-15,000 to put the property in order. The increase in rent will more than cover the costs.
Types of real estate ideally suited for investment: a multi-story building within 1 km of the sea with developed infrastructure and parking space; a house with several rooms, a fenced plot and a separate entrance for each group of tenants; a hotel room located no further than 500 m from the sea. It is precisely such housing that vacationers, willing to pay for comfort and safety, rent most eagerly.
_