Who is Buying Offshore Real Estate and Why?
My friend Diane Kennedy, who you may know as the bestselling author of numerous books including Real Estate Loopholes and Loopholes of the Rich, recently asked me to do a private workshop for about 400 of her personal clients on How and Why to Invest in Offshore Real Estate Today. Being one of the nation's most sought after CPAs, her clients are primarily business owners and sophisticated real estate investors.
While that was a private event for her clients only, I want to share some reflections on who these people are that are buying offshroe real estate and why they are buying now.
WHO IS BUYING OFFSHORE REAL ESTATE TODAY AND WHY?
Over the last couple years my company, Maverick Investor Group, has observed a substantial increase in desire among North American buyers to invest in offshore real estate. As such, we have spent the last couple years studying international markets and serving this client base, and these are some of our observations of Who is Buying Off Shore (to give you a sense of the client profile) and WHY they are buying offshore now (based on spending time with them and getting to understand their motives):
Group 1: Retirees (Global Boomers) Looking to Relocate and Retire Internationally
WHY:
Adventure and Excitement. Tens of millions of baby boomers are just starting to retire. This generation is reinventing ‘retirement. They are not looking to slow down, they are looking for adventure and excitement in their golden years. Many are looking to travel the world and relocate to a home base outside the US. This includes such a large percentage of them, that they have been dubbed the “global boomers”.
Cost of Living. This group is interested in beautiful weather, golf, beaches, and it can all be had in other places around the world for a fraction of what it costs in the US. So, for those that are serious about lifestyle design, and getting the most they can for their money, they are seeking out the locations with the greatest net lifestyle value.
Quality Affordable Healthcare. This is a big ticket item for today’s retirees. Both the ‘quality’ part and the ‘affordable’ part. In other places around the world US-trained physicians are available at a fraction of the price. Particularly for the retirees who cannot afford the top notch healthcare they desire in the US, they are looking for alternative avenues to meet this need.
Group 2: Vacation Home Buyers Looking to Purchase Second Homes Internationally
WHY:
Comparative Beachfront Value Proposition. This group understands that there are a variety of places they can buy beachfront/resort property, and a variety of locations that could be deemed a ‘tropical paradise’, but the question these buyers ask is ‘where can I get the most paradise for my money’.
Authentic, Not Over-Saturated with Tourists. People that want to spend their vacations off shore are increasingly looking for locations that are not so over-saturated with tourists that they cant even have an authentic experience with the local culture. Rather, they want to buy something where, in addition to having their privacy, they can also interact with the locals and immerse themselves in a different culture.
Different, Edgy. Increasingly, second home buyers are looking for something a little edgier than the mass marketed vacation spots. Something that provides a little more adventure and gives them a few more stories to tell and may raise a few eyebrows at the office.
Group 3: Real Estate Investors
WHY:
Concerned with the Prospect of Inflation and Where the US is Going Economically and/or Politically. There is a fast-growing segment of the population in the US who are particularly concerned with where the US is headed, very concerned that we are about to hit a period of inflation or hyper-inflation, and are looking to get a portion of their money out of the country. They want to own assets (particularly hard assets like real estate) off shore, and also want a property that they can go to live in ‘just in case’.
Emerging Market Investment Strategy. Real estate investors are also looking off shore because, while it may take the US real estate market many years to resume the prospect of reasonable appreciation, there are many other markets around the world that are emerging as we speak, booming in fact and about to explode onto the world stage. This group of investors wants to take their money out of a stagnant or declining market and get in on the next big thing.
Rental Program with Cash Flow Potential. Real estate investors are looking for some sort of rental program so that they can rent out their property while they are not using it and create a stream of residual income from their investment.
That is the basic overview of the main buyer groups we have observed.
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