Once you are clear about your investment goals, not only does the whole process get easier, but you are much more likely to achieve your goals.
Which of these goals is yours?
1. Buying for Capital Gain
In the world of emerging markets, intrepid investors seek out not-yet-discovered locations. The idea is to buy in a location BEFORE it is discovered by too many other foreigners.
These investors buy in those emerging locations and wait. They simply wait until the market arrives and prices start rising due to increased demand. Of course, finding these locations is the key. The purchase may be in a remote area. But that is only a good idea if there are clear indications that infrastructure improvements will follow. If such investors are buying within a development, they tend to purchase early in the roll-out of the master-plan, and look to secure ‘founder’ or ‘charter membership’ deals as a result.
These capital growth investors will sell the property when their target resale price is easily achieved. Of course, the next buyer can also still make significant capital gains, but typically less than the pioneers in these not-yet-discovered areas can achieve.
2. Buying for Personal Use
This is usually someone looking for a vacation home. This investor wants a place to recuperate from their daily life. Usually they are looking to buy property in places that enjoy a good climate, access to amenities and where the lifestyle is very different from their life at 'home'.
Sometimes this investor also wants to rent out the property when they aren't using it. However, while they like the idea of a rental covering some of the costs, rental income is not their top priority. This investor type tends to be affluent and own more than one home, often in a different part of the world. Their overseas property(s) may be part of their larger investment plan.
However, if the location is still affordable, people without this kind of wealth can also enjoy 'a second home in the tropics lifestyle'.
3. Buying for Rental Income
These investors are looking to create a cash flow stream through rental income. Vacation rentals usually provide a much greater rental income than other types of rentals.
This investor seeks out locations that attract a sufficient number of potential renters, such as foreign vacationers, travelers, and retirees. Of course, this investor needs to buy property where the return on investment (ROI) pencils out.
Sometimes, people who are retiring overseas, will also invest in a rental property in order to supplement their retirement income. Or they will rent out their property until they are able to retire there full-time.
4. Buying for Retirement Overseas
Investors in this category are typically 5-6 years from retirement. They are looking for property that will provide them their ideal retirement lifestyle - and one they can afford. This means these retirees must be clear on both their retirement budget and their retirement lifestyle goals. Then they can be sure that the property purchase will meet both.
Oversea retirees usually also look for locations that have easy access to health facilities and shopping centers as well as areas that are safe and have low crime.
And like everyone, they also want to buy a property that will appreciate in value.
5. Buying to Transform Your Life Abroad
These are lifestyle investors. They want to start a new life abroad and enjoy a different lifestyle. Some may be downshifting, while others will be embarking on new adventure abroad. Some of these investors need to keep earning money. Some can retire early, especially if they retire some place with a much lower cost of living.
This investor type is a pretty diverse group. A segment of this type of investor might also like to purchase income generating properties such as a B&B, hotels or rentals.
Without a clear understanding of the kind of property that best meets your investment goals, you are in danger of buying the wrong property, but thinking it is the right one.
It could be that you fit into more than one investor type. That is fine. But then you must be clear why you are buying a specific piece of real estate. Which investor hat are you wearing for that particular property?Only then can you adequately evaluate where the purchase will achieve your goal.
Which type of property investor are you?
There is real estate in Puerto Armuelles to meet each of these investors types.
You can start browsing some of the property for sale in Puerto Armuelles.
Before investing in property anywhere, you should read Reyn's article
Know Thy Self - What To Do Before Buying Property In Panama.
