RESORT PROPERTY INVESTMENT: What you need to know

The epidemic is under control, tourism is open to both domestic and international visitors and the people's demand for vacation increases are bringing great hope to resort real estate developers.

Resort real estate emerges as a new investment trend for individual investors with little capital.  However, not many investors understand what resort real estate is and is this a profitable investment channel or not. If you are planning to invest in resort real estate, do not ignore this article.

I- What is a resort?

Resort is built independently into many blocks or complexes including apartments, villas, ... in areas near nature, beautiful landscapes, large spaces, tranquillity, far away from urban areas and residential areas.

Resorts are divided into 3 categories:

1- Destination Resort

Destination resort is a resort that fully meets the needs of dining, entertainment, shopping, spa, ... so that visitors can relax comfortably without moving anywhere else.

2- Integrated Resort

Integrated resort is that fully integrates amenities, a variety of entertainment services, shopping malls and high-class restaurants.  Besides, the resort also owns a variety of real estate products of coastal villas, shophouses,... to meet all the needs of tourists.

3- Property Resort 

Property resort includes traditional hotels that have been improved, adding new facilities and services such as casinos, art galleries, shopping malls, etc. for the convenience of visitors. Property resort often have a small area and is not self-contained.

II- What is Resort Real Estate?

Resort real estate is a type of combination between accommodation and resort, usually built in resorts or developing tourism areas.  Common types of resort real estate include condotel hotel apartments, serviced apartments, coastal resort villas, hill resort villas, shophouse, minihotel, ... built inside resorts.

Resort Property Investment: What you need to know / ph: pexels 

Buyers of resort real estate often target two basic purposes: to live or invest to business.  If buying for business purpose, investors can choose to self-manage the operation or lease it back to the investor for the resort business.  Option 2 is applied by investors who choose to cooperate with large and reputable investors, do not need to spend much effort on asset management but can still get a part of the profits in resort real estate business.

III- Is Owning a Resort a Good Investment? 

1- High growth rate

In the context of erratic fluctuations in the international economy, investment channels such as securities, gold and currencies also have many potential risks. 

Meanwhile, resort real estate is being evaluated as a potential investment channel along with the development of the tourism industry.

2- Great demand

The standard of living increases which means that the people's demand for enjoyment is also increasing.  New types of tourism appear: medical tourism, shopping tourism, spiritual tourism, etc. That is also an abundant supply for this resort real estate market.

3- Simple business operation

Thanks to the development of advanced technology, now investors do not need to spend too much time operating their own resort real estate business. Moreover, investors can choose a more popular form of business than leasing to the investor, the investor will themselves perform all stages of business operation from finding customers to taking care of maintenance and repair costs for resort real estate.  This cooperation will make investors more comfortable but still generate a steady income stream.

IV- What are notes when Investing in Resort Real Estate?

Besides the attractive profitable benefits, investors should know about the difficult problems that resort real estate is facing.

2.1- Legal issue

When deciding to invest in resort real estate, everyone hopes to own a peaceful, relaxing second home with nature for a long time. However, not enough information about legal issues related to the invested real estate will lead to many risks in the management and operation of the property. 

Furthermore, the licensing and appraisal processes are still very up-to-date, leading to a delay in the construction progress of the project and delay in handing over which is also the reason why many investors are afraid to put down money to buy resort real estate so it is recommended that you find yourself experienced real estate legal counselors.

2.2- Liquidity 

In addition to legal issues, location, liquidity of the property is also an issue that needs to be carefully considered.  Investors need to calculate with the amount of capital they spend, how much profit will be earned in the end?  Is it worth the investment?

2.3- Project quality and utility

Resort real estate was born to meet the needs of tourism and relaxation.  To do so, the space of resort real estate projects from landscape design to ecology must be really comfortable, creating a pleasant feeling for visitors.  Most of the resorts are now integrated with additional facilities such as swimming pools, massage, dining, amusement parks, shopping malls, etc. to meet all the needs of tourists. Additionally, professionalism in management and customer service are also factors that help the project score points with customers.

2.4- Environmental problems

To build a resort with full amenities, the investor needs to use a very large amount of land, sometimes it is necessary to reclaim land for construction.  However, global tourism industry is increasingly strict with environmental protection issues, limiting tourism activities that affect the ecological landscape.  This also makes it difficult for investors to find a location to build projects and develop entertainment to meet the needs of tourists.

In general, resort real estate is a potential segment, bringing a lot of real value for investors. 

V- What to keep in mind when Investing in Resort Real Estate?

1- Location of Resort Real Estate project

This is one of the most important factors in resort real estate investment.  According to statistics, up to 90% of resort real estate investment projects are built in coastal and mountainous areas.

However, in order to attract tourists, the project site must be located in a central location, close to the beach or hills with beautiful views, near traffic routes such as airports, seaports, highways...  for ease of movement.

2- Different features of Resort Real Estate project 

To invest successfully, investors need to learn carefully about the scarcity of this type of real estate at the proposed project site.  Because that is the reason that determines the competitiveness of resort real estate.

When investing in resort real estate, each different project always brings different features.  Resort real estate projects with a full range of public utility services, especially the difference in product quality, ecosystem, service, environment, full range of amusement parks, etc. will certainly attract large number of tourists.

3- Management and development unit of Resort Real Estate project

This is an important factor because it is related to the reputation of the management unit.  A well-managed and professional project along with high-quality services will ensure a steady flow of visitors.

4- Investor

It is no coincidence that any investor can invest in resort real estate, but the investors also have many levels.  If you want to invest safely, you should choose a reputable investor with a lot of experience in the real estate industry, so it will be more secure in terms of construction and quality.  Experienced investors will always have creativity for new products and especially long-term guaranteed financial resources to be able to implement projects.

5- Using frequency

The calculation of room exploitation frequency should pay attention to the middle, high-class or upper-class rooms.  If the frequency is regular, it will quickly increase profits, if not, it is a bad investment.

The above ways can help you calculate and orient where to choose to invest in resort real estate.  And now the trend of investing in coastal areas is bringing a lot of profit that many tycoons of the real estate industry are aiming for.

VI- Will resort real estate in 2022 will boom again?

The impact of the COVID-19 epidemic has greatly affected the real estate market in general and resort real estate in particular.  However, with the advantages of disease control and safe adaptation, experts and investors hope that resort real estate in 2022 will boom again.

Once an investment channel that boom in the market in the period 2016-2018, resort real estate is experiencing nearly 2 turbulent years under the influence of the epidemic.  Expectations are high, will this investment channel show signs of prosperity in 2022?

The COVID-19 epidemic will be basically controlled and tourism will be a priority industry to recover with many supportive policies and attractive stimulus programs.  Along with that, the resort real estate also heats up.

Furthermore, in the current pandemic situation, capital flows from many investors cannot be circulated into production and consumption channels, so capital flows will tend to pour into real estate, because this is still considered a safe and sustainable investment channel in the long term.

Hopefully in 2022, the resort real estate market will break through and recover like its previous heyday.

RESORT PROPERTY INVESTMENT: What you need to know

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• real estate
• invest
• property
• resort property investment