With Baby Boomers retiring, the potential sales opportunities in resort areas are great. Here are a few tips for your investors:
1. Look for an Immediate Equity Position-Purchase at the pre-development stage and you will have the potential for a larger equity position. Although developers can not predict the future, they should be able to give you historical precentages.
2. Instant Guaranteed Income-Many developers are offering an optional Fixed-Income Property Management Agreement (leaseback). This agreement will allow the developer to lease the unit from the investor for a period of time while they develop the resort. This income should cover the investor's carrying costs during the lease time period.
3. Make sure that the resort is in a desirable location. For example, waterfront properties or waterfront equivalent properties (Orlando-theme parks, Las Vegas-Vegas Strip, Colorado-ski in/ski out) draw tourists in and thus increase occupancy rates. Another thing that will drive up occupancy income is nightly rental status. The developer should go through the steps to zone the property for nightly rental, which will increase rental monies in the future.
4. A structured exit strategy allows the investor peace of mind. Developers will not guarantee an actual exit, however there should be a plan in place to help investors re-sale the unit, or a Rental Management Program that they can recommend. Some developers have contracted REIT's to help with the re-sale when investors want to sell and move to their next investment.
As you bring suggestions to your existing and future clients regarding investments, remember to ask for referrals, as investors like to share information with their friends and family.
Valerie Hardin-Cay Clubs Wholesale Operations-valeriehardin@propertywishes.com
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