The first is affordable average prices. Many properties in Trujillo can be purchased for between $200,000 and $250,000, according to the Global Property Guide.
However, there is also a large inventory of higher-end properties available.
The second reason is an expected influx of retirees and vacationers. “In-migration of vacationers and retirees will be significant over the next 15 years as baby boomers inflate the volume of retirees each year,” says the veteran investor.
“The time to purchase at an affordable cost grows shorter each year, so anyone considering a tropical property should take action sooner than later to enjoy the lower pricing still available.”
Developing a strategy
As Jorgensen began to add to his portfolio, he developed an investment strategy that would best fit his personal needs. “When purchasing property as an investment, I first decide if it’s a short-term (three to five years) or a long-term (10 to 20 years) project,” he adds.
He prefers the long-term approach when it comes to his holdings. He says he finds this method more financially stable and less susceptible to changes that may occur in the market, such as hedges against inflation, currency, market fluctuations, business and economy cycles.
Before entering a foreign market, Jorgensen advises investors to perform a detailed analysis of the area they’ll be targeting.
“In both short- and long-term investments, use of the property needs to be clear, exit strategy developed, target market identified, and improvements to add value begin immediately,” says Jorgensen. “Carrying costs need to be included in the projections and personal use needs a value assigned.”
One of the biggest obstacles Canadian investors face with international properties is obtaining financing. Some countries place certain restrictions on foreigners, while many banks may refuse to provide loans or mortgages outright.
But this doesn’t mean that Canadians should give up on the chance to own foreign property. Jorgensen experienced a litany of financial issues when he began investing in Honduras, but he was able to find some solutions over time.
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