By Samuel Strauch
In recent years, there has been a pronounced shift in the real estate purchasing trends of U.S. buyers. Increasingly, more are buying property abroad. There are several variables that explain this movement outside of the United States; principal among them is price. Stability is a secondary factor.
Who’s buying where?
In emerging countries such as Panama, Mexico and in parts of the Caribbean, the buyer gets more for his dollar. Affluent buyers seeking second homes are typically mid- to high-level executives. A large base of investors in these markets exists because the local market is in a correction phase. To find healthy returns, they must look for new markets.
Then, there is tremendous growth of the Baby Boomer community, with 70 million Americans retiring in the next 10 years. Many cannot afford to live on their pensions in the United States; it is simply more affordable for them to live abroad. For example, research shows that Panama is the No. 1 place for Americans to retire outside the United States. That is because the overall cost of living is 40 percent to 60 percent less than in the States. We’re finding the wealthy are buying multimillion-dollar properties in Baja, Mexico,while the middle-class are buying in Panama, the Dominican Republic and Costa Rica.
The middle-class tends to purchase its properties with cash and lives on a monthly basis. The services, like access to spas, golf courses, restaurants and other luxuries, just can’t compare with what you get for the same money in the United States. And, with a lower monthly maintenance fee, you still get things like full-time maid service. In many cases, the health care abroad is high in quality, yet the cost is lower than here.
Understanding your audience
To earn the trust of buyers so you can ultimately make the sale, you need to understand the buyer. When you are commissioned for a project, it is imperative that you identify the niche within the market. Analyze who your product fits and where those buyers live and work. Are they on the high or low end of the market? And, if they are retirees, is there good health care in the area?
The more people you know, the more clout you gain, so get to know people, what they do, how they do it, what they need and what they want to know. The more they buy from you, the more their spheres of influence know about. You can capitalize on those sales.
You also need to know the country where you are selling product, including economic and political stability, the developer’s reputation, etc. It is your responsibility to represent reputable projects.
Reaching these consumers
Much of the time, this type of sale is driven by demand, making a marketer’s job a whole lot easier. In today’s climate, necessity is stimulating this increase in sales. Nevertheless, it is important to know how to close the deal even when you are approached. Furthermore, the demand has only fueled the amount of new projects available for sale in other countries, making competition a larger factor in marketing programs.
The most effective and least expensive way to reach out is through direct marketing. Go through associations in your local area and make presentations to groups so you have a captive audience as one. Another approach is through advertising in specific media such as print, TV and radio. Note that the latter two only work if you have a narrow approach.
Our firm also taps into a vast network that comprises thousands of brokerages in the United States and more than 30 countries worldwide. Real estate expos, private presentations to buyers and brokerage firms are all coordinated through local firms, so it is critical to build those relationships.
Finally, international marketing has become a simpler process in recent years because the world has gotten smaller. The ease of travel and communications has facilitated this change. It is up to individual brokers to take the initiative to keep their fingers on the pulse of what is happening, and then go out and educate people about properties abroad, where the future of real estate is right now.
Samuel Strauch is a founding partner and president of Affinity International, a full-service real estate sales and marketing firm based in Miami. Affinity’s project portfolio includes several high-end residential and commercial properties in Panama.