Diversifying Your Assets Should Be Your Priority—Here’s How To Do It Despite COVID-19
“A Lot Of People Have Made A Lot Of Money In The Stock Market, And Some Of Them Are Getting Smart”
“A lot of people have made a lot of money in the stock market, and some of them are getting smart. They are taking some of those profits out of stocks and using them to buy hard assets.”
That was the response of one of the real estate agents who participated in last week’s Live and Invest In Mexico Conference when asked what was driving the surge in property sales he (and everyone else in the industry who participated in last week’s event) remarked on.
In addition to stock investors finally seeming to be ready to cash out some profits and diversify into real estate, the other driving factor many referenced during last week’s program was the growing desire among not only Americans but people everywhere to own a property in a setting where a pandemic lockdown wouldn’t be uncomfortable.
Whether that’s a second home in a country that has not imposed any lockdowns over the past year (such as Nicaragua)… an escape hatch in Mexico that you could drive to… or a rural property on enough land to allow for lots of elbow room… more people than ever are looking overseas for options.
I write today from my beach house in Panama, and I understand.
The gated community where I’m located (that I’m developing) is spread out over a couple of hundred acres and includes two beaches. Even when Panama was under complete lockdown, we could roam around the project without concern.
The rush to buy is on—in Mexico and across the globe—because so many are finally realizing the enormous value of taking the step I’ve been urging readers to take for more than two decades.
Simply put: You need to diversify into property overseas.
And you can… even now… despite the lockdowns and travel restrictions.
The New Pandemic Buyers
The Mexico property pros we spoke with last week explained that nearly 100% of the sales they’re making (and they all reported being busier right now than they’ve been in their entire careers) are sight unseen.
Maybe buyers can’t get to Mazatlán, Puerto Vallarta, Playa del Carmen, or Tulum in person, but they want to take action now.
Developers are facilitating the interest by offering virtual tours and customized online viewings.
One friend told me of a couple she knows who bought a property in Italy without seeing it. In this case, they had an inside connection that helped. Their son lives in Italy and was able to walk through the property for them. They were finally able to get to Italy (thanks to their EU passports), arriving just ahead of the most recent lockdown. Fortunately, they bought the place furnished and are comfortably installed in their Italian pied-à-terre.
These new Pandemic Buyers are an unknown force without any track record or history. In other words, difficult to predict where and what they will buy or how much they will spend.
That said, all market segments are active, at least in Mexico, as our team on the ground reported last week. Agents we spoke with said that some of the greatest demand is for high-end, luxury properties and that US$1 million-plus inventory is thin.
At the beginning of the pandemic, I predicted it would lead to great deals in key markets. That took longer to play out than I expected, but important opportunities are now presenting themselves. I’m watching Portugal, specifically.
However, I didn’t predict a new type of buyer for international property markets… and that’s what we’re also now seeing. These new players are going to skew pricing in the short-term. We’re watching this phenomenon closely, market by market, and preparing a series of Market Studies for my Global Property Advisor members.
Lief Simon
