It could sound like this - "expensive, but worth it." All over the world, wealthy people are willing to spend a lot of money for a really high-quality product that will serve for many years and is a good investment. Real estate in well-organized, well-thought-out resorts with developed infrastructure certainly belongs to such purchases.
You have a choice – either to use your property yourself, resting for some time a year, or to make money on the increase in the value of the property by selling it after some time, or to receive money from rent. Considering that such complexes are usually built by well-known development companies, and they are managed by large hotel chains, this is one of the safest investments in real estate.
Could you give examples of such resorts?
I worked on a large resort in Bulgaria, where high-quality service and residential real estate are organically combined. However, in this case, only a relatively small part of the resort was for sale, since this was one of the first experiences of our work on such projects.
Another good example is the fashionable Cyprus golf resort Aphrodite Hills, where the number of villas and apartments for sale is much larger. They are freely located around an 18-hole golf course, while the hotel part managed by Intercontinental is relatively small. In addition, we have worked on several Spanish golf clubs, but not as large-scale as the Cyprus project.
Real estate can also be sold in city hotels, where you purchase a certain room. You have the opportunity to use it yourself for some time a year, and the rest of the time with the help of a hotel operator to rent it out and make a profit. There are such hotels in Barcelona, Paris, Milan and many other tourist centers. In general, the trend when hotels and residential real estate are connected together has a global scale.
For a wealthy person on vacation, a sense of privacy is very important, but how can it be achieved near a hotel that is sure to be constantly crowded?
The trend we are seeing is very curious. Often, those who buy real estate in the resort are driven by the desire to be among people of their own circle. Therefore, the more important problem is not how to provide a person with the opportunity for privacy, but how to create a society that he is looking for and that will accept him. Often such resort communities are organized on the principle of some kind of joint activity, during which people exchange information, learn more about each other.
What kind of activity do you have in mind?
As a rule, all kinds of outdoor activities are used as a unifying force, most often golf and yachting. At the same time, the additional infrastructure that is being created by hotel operators gives an amazing variety to recreation at such a resort. For example, in the already mentioned Aphrodite Hills complex, in addition to golf, you can play tennis, visit the SPA, ride horses, go for a bike ride - and this is only a small part of the opportunities for property owners.
The number of golf properties already existing and under construction in Europe is impressive. What is the attraction of this game for buyers of villas and apartments?
Firstly, golf is perceived as a pastime for people of a high social level, so that such a resort automatically creates a favorable atmosphere for them. By the way, it is even more important than the game itself - only 30% of people who buy such real estate play golf, and only 10% make a purchase specifically in order to be able to play.
From the point of view of the designer, the golf course is dozens of hectares of beautifully trimmed green grass, which gives a wonderful look to the whole object. In fact, it is a very large lawn in front of the house, which gives the object a special appeal.
It is important that the presence of a golf course is a good deterrent when developing a project, which allows you not to over-compact the building in pursuit of profit. Unfortunately, many resorts, otherwise very successful, suffer from excessive saturation of development.
Do you mean a situation similar to the one that has developed on the Spanish coast of the Costa del Sol, where construction is very active, and there are very few golf resorts?
Yes, this is a relevant example. In Spain, unfortunately, unsuccessful construction is often found. The reasons may be different - it's simple greed of developers, and the lack of high quality standards of construction.
In general, there are two approaches to the construction and sale of real estate. The first is when a small and bad property is sold, but cheap and fast. The second is the creation of luxurious, large objects that are expensive and sell for a long time.
Does this mean that resorts where real estate is sold for ownership are simply doomed to be expensive?
Naturally, such resorts should represent high quality and create a sense of luxury. For example, in all countries of the world, the Intercontinental brand represents the highest quality, and a brand like Holiday Inn represents the lowest acceptable quality. It is clear that if Holiday Inn is the main brand of a resort, I will think twenty more times before buying a property there. Approximately the same ratio between the Ritz Carlton and Cordial brands.
So the first very important point when making a decision about buying real estate in a resort is the hotel operator who manages the project. And it plays a particularly important role in new or remote regions for buyers. For example, the presence of operators such as Hyatt or Intercontinental creates a certain atmosphere of investment security for the buyer.
The second stage is the further development of the resort, when it becomes an independent brand. Then people, when making a purchase decision, focus more on the place itself, and not on the operator. This process takes some time, it cannot be initiated artificially. This happened, for example, with the Quinta Do Lago resort in Portugal, which was initially associated with the Sheraton management company, and now is a brand in itself.
And if you look at the situation from the perspective of a private investor who is looking for the most profitable investment of his funds, maybe it is worth diversifying risks and buying several cheap objects instead of one expensive one?
One of the founders of Rolls-Royce once said: "Quality remains even when the price is forgotten." This is fully applicable to investments in resort real estate. It must be remembered that the inexpensive market depends very much on many factors that cannot be predicted. Investments in quality pay off much more reliably and safely than investments in a low price. For example, this year you bought something at a low price, and were satisfied. But if something better is built next year, then you will have serious problems both with finding tenants and with the resale price.
Now there are two architectural trends – either to give the resort a flavor inherent in a particular place, or to do something universal that can appear anywhere in the world. Which of these trends is closer to you?
As the supply of vacation real estate increases all over the world, buyers have a clear choice algorithm – first decide on the country, and only then – on a specific place in this country. The decision to buy is based not only on the desire to live in a particular place, but also on the desire to buy a piece of a particular culture. Few people will want to buy a "Cypriot" house in Spain or, conversely, a "Spanish" house in Cyprus.
There is another point of view on this issue. Why are the windows in a Cypriot house somewhat smaller and the walls somewhat thicker than usual? To match the climate. The same can be said about a traditional Swiss chalet - try to move such a house to another climate solely for the sake of visual effect, and you will suffer a complete fiasco. In the long term, it is better to buy a property that corresponds to the climate and traditions of a particular country.
Could you name the countries or regions with the most successful resort development?
I would single out the American continent, especially North America, because developers work there very competently. First, they determine which product they are going to make, for which audience, on the basis of this they develop a building plan, a feasibility study and only then begin to build. In Europe, the situation is somewhat different. Often developers first start the implementation of the project, and then think about what should happen. As a result, the resort develops spontaneously, under the influence of external conditions.
Could you give some advice to those people who are going to buy property abroad?
It is very important to first do a little own real estate research on variousresorts, and publications such as Homes Overseas can really help with this. Secondly, the name of the developer working with the project is very important. An experienced company is a guarantee that the property will be properly built and will bring profit, and the buyer will not be left "hanging in the air" after the project is completed. When buying a property under construction, it is especially important to make inquiries about the financial condition of the developer company. If you are buying a property in an already working resort, then be sure to talk to those who already live here, find out how things really are.
We thank Lanitis Development for their help in organizing the interview and providing illustrations.
