Real estate can be a safe investment in times of crisis, and if you’re considering buying a luxury house or a second home, there’s one location that makes more sense than ever: resorts. Our experiences over the past months have opened our eyes to a new reality. Our personal expectations about security, mobility, leisure, and tourism have all been called into question, and forced us to examine the foundations of our investment choices to see whether they hold up under pressure.
This same stark examination has been taking place in the real estate sector at large. We’ve been talking with experts about the effects that these uncertain times have had on the global real estate market and, most importantly, the new conclusions they are drawing about where and how to buy property as an investment. As ever, much depends on your goals and objectives, but these professionals agree that the niche market of resort property is a standout in terms of its ability to weather any kind of storm.
Resorts offer a unique combination of financial, logistical, and practical advantages that independent homes do not. These are particularly obvious under the circumstances in which we find ourselves, but their benefits won’t disappear once we have overcome these difficult times. Below, some of the major conclusions that these experts have come to.
The best places to invest in property are those with stable pricing
While new hot geographic markets will always pop up, if what you seek is a stable investment, you should look for a location with stable pricing. According to many of our experts, in this sense, resorts are among the best places to invest in property. Features of the resort and the profile of current owners are what lend it this stability.
Marc Sardà, a family banker, European Financial Advisor, and rep of Mediolanum Bank, agrees that, “from a financial point of view, if you want to derive returns from your investment, it’s better if the property you buy is in a resort, especially if your target market is foreign and the resort has a golf course.” Sardà believes that, within the real estate sector, this type of investment is the “least volatile” and that it’s particularly interesting to seek out opportunities in these locations right now, because property prices are likely to remain stable in the future.
High-end resorts can often demonstrate sizeable development investment, and they partner with global companies to create brand awareness and trust. This is a boon for buyers because the marketing done by the resort creates more visibility and more demand. Long-term planning is required in a resort, so it’s a way for buyers to know what they’re getting and the future improvements they can expect.
Often these resort properties are second or even third homes for their owners. It’s a population that can generally resist market fluctuations, again contributing to pricing stability.
The security of homes in a gated community
One of the salient benefits of having a resort property is that a gated community serves as a very real physical refuge. Over the past months, this has proven particularly valuable, as countries around the globe have imposed strict restrictions on movement and regulations regarding social distancing. Many resorts are in out-of-the-way locations, and choosing to isolate away from busy cities has been a welcome option for numerous owners. At Abama, over 30 owners of varying nationalities decided to stay at the resort throughout the State of Emergency because they felt safer here than if they returned to their home countries.
“Knowing that there are staff dedicated to making you comfortable and who care about the state of your health is very calming. And these are people with whom you have a personal relationship and on whom you can count should any problem arise,” assures Caroline Mueller, from Engel&Volkers. She also points out that most resorts of this kind “offer a 24-hour owner service line” that can address any issues that arise, including the need for medical attention.
But there are many other benefits to owning a luxury house in a gated community as well. If the property is a second home, there is relief in knowing that no matter whether you are visiting or away, it is being taken care of and there are home maintenance services available. With controlled access points and on-site security 24 hours a day, there are no concerns about your property being damaged or accessed if you cannot be there yourself.
A wide range of luxury properties
For potential buyers of luxury properties, resorts can offer a wide range of choices delivered without having to endlessly househunt. If the destination is an appealing one and the rest of the services are attractive, many buyers decide early on to narrow their focus to a particular resort.
Most resorts will offer homes in multiple communities, meaning that even at a short distance you could have a very different living experience. Some owners prefer to be more isolated, opting for a standalone luxury house or villa, while others might like an apartment community that offers more services and more opportunity for social interaction. Efforts are also often made to distinguish properties aesthetically with distinctive designs, or functionally, with different features like private pools, gardens, or terraces.
Some resorts also offer the opportunity for you to design your own custom villa, but leave the construction to the resort management team. For Candini, this customization is essential: “In our modern life, investors are looking for the best of both worlds. They want to personalize their home, but build it to standards that will make it attractive if they should decide to sell in the future. They want to be at the forefront of all architectural and technological innovations in homebuilding, and this is something a high-end resort can provide without owners having to vet the contractors.”
The benefits of a resort community
Another advantage offered by these homes is a built-in resort community. When you own an independent home, you might meet your neighbors, but there are nowhere near as many opportunities to mingle with fellow residents. In a resort, the golf course, the restaurants, the tennis courts, and social spaces are all potential meeting places. Yet because each owner has a private space, it’s never an obligation.
Though residents at Abama deeply value their privacy, these social opportunities are a fundamental factor, above all for foreign investors buying a second home in a country where they don’t know anyone.
Elodie Casolà, Director of Marketing of ARUM Group, a company specialized in the management and construction of large-scale resorts, agrees. “One of the factors that gives our buyers a feeling of deep satisfaction is the sense of community that they perceive in a resort.”
And Jean René Kaste, of the Kaste real estate brokerage in Hannover, Germany, says that the resort community is a factor highly valued by his clients as well. These common spaces and sport facilities are ideal locations for “establishing a network of contacts and relationships beyond leisure,” because many owners tend to be business owners or decorated professionals.
Accessible amenities like resort spas and restaurants
As an independent homeowner, you are responsible for seeking out your own entertainment and dining establishments, but in a resort, much of the work has already been done for you by providing that entertainment. Most resorts offer sport facilities of some kind, as well as great restaurants and other amenities.
For Toni Candini, the Business Development Director of ARUM Group, these services, “allow owners to really enjoy their experience. They’re in a unique environment that is secure, and they can enjoy Owner Clubs, playing golf, a tennis masterclass, and more, all within walking distance of their homes.”
With many resorts having at least one hotel on their grounds, these establishments are also able to offer additional amenities to resort owners, like boutiques, resort spas, and even Michelin-star restaurants. The resort’s power to draw a steady stream of guests and residents ensures that there is always interest from established brands and names.
Your best holiday destination
If you want to make an investment that will offer good returns, it’s key to do so in a place that will remain highly visible and attractive. Resorts are usually among the best holiday destinations in the world, offering, as previously stated, numerous amenities within a small radius.
For Marc Sardà, this is another hugely important point. “Today people seek returns at a good price, and the totality of what a resort can offer is always greater than what you could get alone. This is particularly true when it comes to common areas, including green spaces, community pools, fitness centers, and the like.” These areas, as well as any golf courses, tennis, or other sport facilities, are managed by the resort and entrusted to professionals specialized in their care.
Resorts like Abama also offer direct access to a beach, and a steady stream of guests that come to enjoy hotel or apartment accommodation, depending on their preferences. And it goes without saying that holiday destinations are often famed for their weather. In the case of Abama, it means springtime temperatures year-round, as well as professional facilities for golf and tennis lovers. It’s an escape even in the dead of winter, whether you’re a guest or a resident.
Live in the EU
Buying a luxury house in some countries in Europe has the indirect benefit of allowing owners to live in the EU legally. This has doubtless come sharply into focus for UK nationals recently, but it applies to other countries as well. Under some circumstances, investing in a home will allow you to apply for European residency so you can move freely throughout the continent.
There are also additional possibilities opened up for establishing a business in Europe, and some regions, including the Canary Islands, even offer interesting tax advantages for specific sectors and types of companies.
Hotel service and amenities not available in independent properties
The management factor is key in the decision to buy in a resort, particularly when it comes to hotel service and amenities not available in independent properties. Having a professional management company on the grounds means owners can request housekeeping, room service, laundry, and more, simply by picking up the telephone.
Didier de Bruycker, of Belgium’s Immo Twins brokerage, says, “Having hotel service available is key for my clients.” Because they do not plan to stay for long periods of time, they want to enjoy every minute. And knowing that they don’t need to shop or cook if they don’t want to, especially upon arrival, is a tremendous relief.
On the development side, many resort properties are already sold furnished, and this can be very attractive for owners who cannot or prefer not to spend the time to furnish a new home.
The best places to buy rental property
Investing in an apartment or luxury house in a resort or gated community is also one of the best places to buy rental property. According to José Miguel Mesa, Abama Luxury Residences’ International Broker Manager, many resorts offer investors the ability to choose when they want to use their property. The rest of the days, owners can leave their property to the resort management company to let, care for, and maintain it, making the investment an easy and profitable one. “You pay for maintenance and the amortization of the initial investment,” he states.
It’s a formula that works for many. Artem Popov, the CEO of Asten Realty, a broker specialized in this real estate sector, concurs. “If you want to earn returns from a property when you’re not using it, you don’t have to pay for ads on the Internet, show the property, worry about your renters or the state of your property, or chase payments. The resort management team does all of this, which makes everything easy.”
Relaxing European holidays a short hop away
We talked to several owners that remained at Abama during the pandemic, and one common reason they chose to stay was the tranquility they feel here at the resort. An Irish couple in their forties noted, “We live in the center of a city without a garden, and we thought we would benefit from the calm of our Las Terrazas apartment during this difficult time.”
But this sentiment isn’t unique to the extraordinary circumstances of the moment. On a densely populated continent, there are many who look for places they can have relaxing European holidays any time they have a few days free. For owners with busy work lives and demanding schedules, having a property that is easily accessible is a major factor. And resorts, as holiday destinations, normally offer good travel connections.
If the resort is in an area with a relatively sparse population, owners of luxury houses get an added benefit: quiet and privacy that is difficult to come by in the city. There is also less pollution, and less need for a car or other transportation to enjoy all the leisure activities at your fingertips. Add to that more options for staying active and eating well, and resort properties accrue even more indirect benefits.
Looking to the future, our recent experience will inform our choices, but so will changes in the way we care for the planet, work, and travel. “We may find,” says Elodie Casolà, “that opting for a more sustainable world makes us change our habits, traveling fewer times per year but staying for longer periods of time. When we do travel, we’ll want to feel at home. And many will opt to invest in real estate as a way to plan holidays in safe destinations that offer a complete package of leisure, services, and security.”