5 Keys for A Profitable Resort Real Estate Investment

Investing in resort real estate is not as simple as investing in a regular real estate project, but it also requires analyzing and choosing between many factors for investment.

5 Keys for A Profitable Resort Real Estate Investment
5 Keys for A Profitable Resort Real Estate Investment / ph: pexels 

Although resort real estate investment is a trend, this is a difficult market to invest.  It is because of the selection based on many factors that need to be paid attention to as location, attraction, uniqueness, scarcity,... which contribute to an investment successful.  The following basic steps will help you have a profitable investment when deciding to invest in this resort real estate investment market.

1- Location 

This is the first thing you need to consider before investing in real estate in general and resort real estate in particular.  The location of the resort real estate will determine the business performance and the profit of the property.  You should choose resort real estates in central locations, or near beautiful beaches, near famous tourist sites where there are many tourists.  Distance to the airport, highway, cruise ship that does not exceed 3 hours will have opportunity to achieve the highest economic efficiency of the property.

2- Scarcity 

Surveying the scarcity, the property’s unique or different features from the market before deciding to buy will help investors increase the value of real estate later.

3- Reliable project real estate developers / project investors 

Resort real estate is a rather specific property type and not many real estate developers / project investors have experience and strongly develop this property model.  Choosing real estate developers / project investors with enough reputation and economic potential is very important because the real estate developers / project investors will be the unit that accompanies you throughout the investment process.  Besides, resort real estate requires abundant and long-term investment capital which means that the quality of construction, landscape, design... is also guaranteed.

4- Reputable real estate brokers 

Finding information and advice from reputable real estate brokers and firms to buy and sell. Selecting a professional, knowledgeable, reputable and experienced real estate broker or firm will help investors shorten time and effort during project research.  Additionally, they can also give useful advices and be a bridge with potential resort real estate projects.

5- Estimate payback period and cash flow balance

- Payback period: 

For resort real estate, the ideal profit rate is about 10-16%/year and the payback period is from 6-10 years depending on the cycle.  Resort real estate can also increase in value by 30% compared to the first time after the 5-year cycle.

- Cash flow balance:

To be profitable, the interest rate of investment loans must not exceed 11%/year for the 10-year loan period.  Therefore, resort real estate investors need to plan carefully to balance cash flow to get payback as quickly as possible.

5 Keys for A Profitable Resort Real Estate Investment

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