What's better real estate? Part of an Island or a Regular yard?

[GNews]

What's better real estate? Part of an Island or a Regular yard?

Same size land.

Let's say a regular yard in a mid to large city
Or an island in an area that looks like paradise?

In terms of ROI vision / long term value ... which do you see as better in best case scenarios?

 

[Smith]

ROI vision / long term value

Here's some food for thought...

Lots of people buy island real estate. They get sold the dream of the island paradise and prices always going up. They cash out retirement funds or just cut a check. No credit, just a straight cash deal.

If you don't care about an ROI and you've got money to burn, have at it.

But, if you need to sell that property in the future for retirement or you need it to appreciate you'll need a few things to line up...

1. You'll need another cash buyer who wants the land you own because most locals can't afford the property foreigners buy and banks won't lend to foreigners to buy local real estate.

-and-

2. A strong economic environment (aka no global recession) so people are actually shopping for island real estate and not hoarding cash.

If you don't have both of those factors lining up when you need to sell you'll either get lowball offers or no offers at all.

On the flip side, if you buy in the US, Canada, EU, or other developed markets, you're in a place that is built on credit...

So, Joe Shmo with a $15-an-hour job can buy a $500k property with his last three-month pay stubs. That doesn't happen outside of developed markets.

As a result, you'll have more prospective buyers bidding on your place and a faster sale, not to mention more people actually interested in the type of property you buy (probably).

That said, buying in a credit market means your purchase price is probably going to be higher, which is why you should also look at leverage credit when buying.

But the point is, if you buy in a credit market, you won't be stuck holding the bag when the market dumps or people decide they don't like the island you chose.

Do I need to say this isn't investment advice? Because it isn't.

I'm just sharing my observations after seeing a lot of people from the US and Canada get burned in the island real estate space without knowing the basics.

So, I would buy in a big city with credit and then Airbnb the islands anytime I want a vacation in a place that looks like paradise.

 

[bernard]

House with big yard and access to water.

 

[GNews]

Here's some food for thought...

Lots of people buy island real estate. They get sold the dream of the island paradise and prices always going up. They cash out retirement funds or just cut a check. No credit, just a straight cash deal.

If you don't care about an ROI and you've got money to burn, have at it.

But, if you need to sell that property in the future for retirement or you need it to appreciate you'll need a few things to line up...

1. You'll need another cash buyer who wants the land you own because most locals can't afford the property foreigners buy and banks won't lend to foreigners to buy local real estate.

-and-

2. A strong economic environment (aka no global recession) so people are actually shopping for island real estate and not hoarding cash.

If you don't have both of those factors lining up when you need to sell you'll either get lowball offers or no offers at all.

On the flip side, if you buy in the US, Canada, EU, or other developed markets, you're in a place that is built on credit...

So, Joe Shmo with a $15-an-hour job can buy a $500k property with his last three-month pay stubs. That doesn't happen outside of developed markets.

As a result, you'll have more prospective buyers bidding on your place and a faster sale, not to mention more people actually interested in the type of property you buy (probably).

That said, buying in a credit market means your purchase price is probably going to be higher, which is why you should also look at leverage credit when buying.

But the point is, if you buy in a credit market, you won't be stuck holding the bag when the market dumps or people decide they don't like the island you chose.

Do I need to say this isn't investment advice? Because it isn't.

I'm just sharing my observations after seeing a lot of people from the US and Canada get burned in the island real estate space without knowing the basics.

So, I would buy in a big city with credit and then Airbnb the islands anytime I want a vacation in a place that looks like paradise.

Well it's not an expensive / whole island.

It's a XXXXX sq ft portion of an island; maybe 25-30% of the island . The price is like $XX,XXX and through someone I know.

My thoughts is to buy it, live and build a nature experience on it. AirBNB it.

Later buy in the city as i enjoy the peace for a while with my family.

The views are INCREDIBLE. Wake up to exotic birds and little crocodiles in the view. Fishing .

I do realize a boat may be needed though.

 

[illmasterj]

Sounds a lot like a yacht. Great to use, terrible to own.

 

[tziahs]

Well it's not an expensive / whole island.

It's a XXXXX sq ft portion of an island; maybe 25-30% of the island . The price is like $XX,XXX and through someone I know.

My thoughts is to buy it, live and build a nature experience on it. AirBNB it.

Later buy in the city as i enjoy the peace for a while with my family.

The views are INCREDIBLE. Wake up to exotic birds and little crocodiles in the view. Fishing .

I do realize a boat may be needed though.

Only buy it if you have a solid monetization plan (are you allowed to build on it? at what cost? how's the transportation to it? is it safe for tourists? visas? can you find employees to take care of it? at what cost?and so on). Airbnb properties need management, and are a pain in the ass to monetize; you need someone who knows how to manage them.

 

[GNews]

Only buy it if you have a solid monetization plan (are you allowed to build on it? at what cost? how's the transportation to it? is it safe for tourists? visas? can you find employees to take care of it? at what cost?and so on). Airbnb properties need management, and are a pain in the ass to monetize; you need someone who knows how to manage them.

An Ait .......... ina beautiful place. I'd live on it myself probably for a year before renting.

Transportation to it is like $20 USD per via. Lots of water taxis at this place.
Employee wise, that's something I've definitely had to think on. Who to manage it.


Why a pain to monetize? I had an acquaintance (but in Atlanta) who did quite well renting out rooms in their house. So well in fact, they paid off the house and the basement rennovation, sold the house for a nice profit and move to Mexico ... bought a house.. now renting again

 

[GNews]

Well, almost bought the portion of the island bu there was the deal breaker

it was XXXXX sq ft but turns out, construction crews had problems with grading. They could only level out like 1/5th of the land making the project limited. I had to recalculate price based on that XXXXX sq feet.
Beautiful views and all but the owner wouldn't adjust price so I had to just let it go.

But who knows maybe in the future. A lot of people are buying into the area... if any of you are all familiar with El Penol/Guatape in Colombia (near Medellin) it's a new attraction simliar to it. Bummer i couldn't get it.

Everyone's buying inland but there's very few Island locations to buy so I wanted to have the 'exclusive' project