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In this article Casa de Campo Living’s ‘number crunchers’ or ‘money experts’ explain a little about investing in the Real Estate market. In the past Real Estate investments were seen as ‘safe’ – not anymore! In this article you will learn how to safely invest in Real Estate and that Real Estate in Casa de Campo is (of course) still safe to invest in!
For more than a decade, many investors found what it seemed as the perfect investment. An investment that would never lose any value and by its own characteristic an investment that per se represented a huge collateral, that allowed the people to finance themselves over their investments. We are talking about a real estate investment. Cities like Miami, Boston and Los Angeles, averaged low double digit increases in pricing for almost a decade, and the trend looked like it was going to go on forever.
As mortals however, we do know that nothing last forever, and the Real Estate boom didn’t last forever. Many investment vehicles came through in these days that made the case even more complex, since those instruments basically increased the fictitious demand even more, making the bubble even bigger, and the final result is something everyone is well aware of.
At the end of the falling curve, we finally (the DR) got hit. The Crisis was all over the US and also in Western Europe, therefore it was natural that our market sooner or later would suffer, since our tourism properties are dependable on those markets.
We now have a market going in an opposite direction. Many people are afraid of having any Real Estate Investment, and some people have even sold properties realizing huge losses just to move their money out of the Real Estate market.
The question then is: Is a Real Estate Investment a wise investment? The answer is Yes or No, depends. The same question can be raised on an investment in public stock. It is good or bad? The answer is also yes or no. In the case of the stock, the yes or no will depend on the fundamental value that holds the stock. The market can show inefficiencies in the short term, in the mid and long term , the value will be determined by the fundamental strengths of the company where you own this stock. If a company has a strong product, difficult to replicate, a strong service, a good diversification, you will have great chances of having a very good return on your investment.
It is also true for a Real Estate property. There are fundamentals that provide value to a Real Estate investment, starting by location. Location is the most fundamental feature in a Real Estate investment. For example, in some portions of Miami City, prices went down up to 50%, while in Brickell Key, average drop didn’t surpassed 8% in average, in the worst of the crisis. Why is that? Location. No more land in Brickell Key. As in a public stock investment, the higher the risk, the more volatile the returns, but also the biggest opportunity to have a huge gain or a huge loss. We could perceive how new projects in our country represented huge returns for its investors, but when the market collapsed, the fall in price was dramatically higher than in mature projects like Casa de Campo.
So now let’s go direct to our beloved project Casa de Campo. Location: The project made its own location by turning into the golf meca of the Caribbean. An international Airport that connects the project with the world, a huge Marina, almost 2,000 Villas and a great Hotel. Out of all of the features presented here, all of them can be found in similar projects in our country, but one. Casa de Campo has been operating for more than 30 years in the market, passing through all kinds of crisis, including a huge Hurricane that strongly hurt the Project, and it recovered and came back. If your house in Casa De Campo would be a stock, this would be a stock with huge fundamentals. You may not see jump in values as the ones that happened some years ago in some other projects, but you will not see drops in values as such either.
Then, the next time you will make a decision on having a Real Estate Investment, please pass through a similar analysis as the one you will make when doing a Public Stock investment, check on the fundamentals. In this case, the fundamentals are location, maturity, amenities, surroundings, security, liquidity (Resale market availability), international connectivity and performance history of the project where you’re buying.
For all those readers that owns a piece of property in Casa De Campo – you will feel safer after testing your property on those parameters.
These articles are contributed by Fernando Cantisano and Irene Torres, who are corporate finance experts, if you are interested in their services, you can contact them on:
Phone (809) 227-0011
Website: www.catojisa.com
Email: fcantizano@e-diesco.com