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| | Buying investment property
Buying investment property that starts with your home or second home as one of your greatest property investments has always been a sound real estate investing strategy.
To us, your purchase of a home, allowing for strong consideration of your personal preferences, should share many of the same considerations applied to buying an investment property. For most people, your home (whether a primary home, second home or vacation home) is your biggest investment in life.
So, in our selection of places to build, including the desirability of the particular retirement community and its value in comparison to others, we treated the development of our homes with the same standards we would apply to buying investment property. A great home should always be a great property investment as well. Here are the basic criteria we followed to create a great home and solid investment for your retirement: | |
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| | A good preconstruction investment strategy is not a thing of the past. Is it really any surprise that preconstruction investments acquired a bad name over the past few years? Start with opportunities that were not truly good preconstruction investments to begin with and combine that with buyers whose decision-making process consisted of little more than following the crowd (a preconstruction investment strategy?) and you have circumstances that can easily lead to failure. A good preconstruction investment strategy is much more than this. See our Preconstruction Homes section for details on how we guarantee your home's price at least 20% below market value. We call it wholesale pricing.
We personally witnessed the preconstruction madness in some of its hotbeds (Florida and Las Vegas) and developed a preconstruction investment strategy that avoided the pitfalls and built on the positives. Here are five sensible rules for preconstruction investment that should deliver the best preconstruction value and results for you: | |
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| | - Invest only in preconstruction real estate that is at a true and demonstrable discount from other comparable real estate in the market. Never pay retail when you can buy at a wholesale price. Earning a profit on your real estate investment should be based on buying right - below market value – and not merely on the hope of future appreciation in value. There should be a significant element of potential profit at the time of purchase. We insure that our preconstruction investments are at a clear discount to current market prices on day one.
- Invest only in real estate markets that are shown to be, or that observable trends indicate will be, appreciating markets. What good is it to purchase a home at a seemingly discounted price if the real estate market in which that house resides is weak or suffering? The home may be discounted simply due to poor market and possibly worsening market conditions. We have identified healthy real estate markets for you and (perhaps no surprise), but they are not the places you are most used to hearing in association with preconstruction homes. Think about the point that this factor alone may be putting you on the right path to a profitable real estate investment that also combines great lifestyle amenities. There are many of the former "HOT" real estate markets currently undergoing price correction to the downside. Our selected markets, even now, continue with a solid pattern of appreciation in values. We went to places where real people wanting to purchase and live in homes like these create real market demand. For more see The Preconstruction Investor and Home Price Appreciation – Let Common Sense Prevail
- Invest only in places that have undergone little to no real estate investment speculation in the recent past and that do not presently have a significant amount of investor activity. Recent experience with preconstruction real estate investment in America has shown that the places that flew the highest and fastest (seeing year on year price appreciation exceeding 20%) are now the places that have fallen the hardest. And, what did they all have in common? – strong activity and nearly mindless following from the investor “herd”. We purposely try to stay away from the investor herd (mainly so that we avoid being trampled in the process). Instead, we have found very desirable places that have seen solid, steady price appreciation over the past few years to the present and that give us reason to expect the appreciation in values to perhaps even accelerate.
- Guaranteed Rental of Your Investment Property for a Year or Two? – Think Hard on This One - Don’t allow yourself to be fooled by a prevalent and considerably misleading marketing technique for the sale of preconstruction real estate in the U.S. A common (almost overused) marketing hook is to offer a guaranteed rental of your property after purchase for a period of time (generally a one to two year period). On the surface this seems enticing. You are able to purchase this property knowing that payments will be covered by the rental income during that period. What is not transparent in this transaction is that your purchase price must be at market value or even above market value in order to extend this offer to you. You may not realize it but, the guaranteed rental income promised to you is actually being financed in the price you paid for the home. The real estate developer is able to give this money (guaranteed rental income) back to you over time because you paid for it in the first place in your purchase price. In the end, the success of this type of investment will ultimately depend on whether and how much that property may have appreciated over the term of the rental. If not at all, it will have done you little good to have had the payments covered for the one or two year period. At that point, you find yourself one or two years later owning a property that has no greater value than what you originally paid for it. On top of that, if continued rental of the property was your strategy, you will also find yourself in competition with many others who have the same type of property to rent.
- Base your purchase decision on solid fundamentals and a reasonable understanding of the market conditions. Start by making sure, if you are thinking of this primarily for investment, that you have adequate resources to hold this investment for some reasonable period of time (minimum 6 months). Our website provides links to many real estate investment web sites and retirement web sites that offer independent real estate market data and advice. We summarize most of that information on our website and offer our own advice, but we encourage and enable you to do easily do much of this on your own. Take advantage of the information that we offer. We prefer that, with a little checking around, you conclude that the preconstruction investments that we have structured are among the best there are in all of the U.S
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| | Build homes within a segment of the residential real estate market that was poised for outstanding future growth. We felt that the vacation home/second home category would continue to be a good real estate investment even through tough real estate markets simply due to the demands of an aging Baby Boomer population in search of their future place of retirement. [This market segment was, in fact, the only residential category that posted positive sales gains in 2006, up over 6% from the prior year.] | |
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| | Take advantage of the most compelling, powerful and predictable demographic trend of the coming decade - the impending retirement of 88 million Baby Boomers [retiring at an average rate of 12,000 per day]. | |
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| | Focus on building in the places that, with all other things being equal, stood out as the places that would have the best "relative affordability" - which simply means being more affordable than any comparable alternative. Every good real estate investment possesses this quality. | |
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| | Limit our search to markets that have what retiring Boomers tell us they want - a mild, four season climate; back to nature opportunity; affordability; plenty of activities; and convenient medical facilities; shopping; culture and entertainment. | |
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| | Locate the best and most affordable active retirement communities in which to build once we decided upon the suitable regions in the country. | |
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| | Develop the type of homes that Baby Boomers have overwhelmingly said they want in retirement 'single family homes by a count of 70% majority. | |
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| | Develop a system to build quality homes in such a way that, in each marketplace, we would be the undisputed low cost builder without any sacrifice of quality. | |
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| | Put our buyers in position for at least the reasonable expectation of future appreciation in their home value in the near term, not at some indeterminate future date. Home prices in our communities continue to appreciate - even today. | |
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| | We think that we have accomplished what we set out to achieve, not based on own judgment but in the judgments of some very happy buyers. See Testimonials from our more than satisfied buyers. | |
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