I’m on the road scouting…
As I write, I’m traveling to Oaxaca state in Mexico to investigate the real estate scenes in Huatulco and Puerto Escondido on the country’s stunning Pacific coast. These destinations are known for their glorious golden-sand beaches, oceanfront bars and cafés, and unspoiled reefs for diving and snorkeling. New investment is flowing into this region…more people are coming…
In the days ahead, I’ll be sharing some notes from the road here in Overseas Dream Home. You can also follow along in our brand-new WhatsApp scouting channel. (Learn more and sign up here.)
Or if you use Instagram, I’ll be posting some updates to my account here.
Today, though, I thought it would be helpful to explain the key thing I look for when I’m scouting destinations like these—the #1 megatrend that points to real estate riches.
There are a few elements to this megatrend, which I’ll break down in a moment. But it can be effectively summarized with an old quote about real estate attributed to William Penn Adair…
“Find out where the people are going and buy the land before they get there.”
The golden-sand beaches and glistening turquoise waters of Huatulco on Mexico’s Pacific coast already draw visitors from around the world. But this destination could be about to hit a whole new level. I’m putting boots on the ground to investigate…
The Best Way to Be Ahead
For almost my entire career as an international real estate investor and scout I have followed what I call the “Paths of Progress” as the surest way to be ahead of the people…ahead of demand.
In its simplest form, a Path of Progress is anything that improves the accessibility of a piece of real estate and increases its value. Infrastructure like roads, bridges, airports, air, and rail routes.
Now, this strategy alone is not enough to ensure success. Because easier access by itself does not mean the people are going to come. For instance, no matter how smooth a new highway in Belarus or the Arctic Circle, I doubt millions of people are coming.
But when a Path of Progress intersects with three other elements, it can lead to a megatrend. Here are the elements I look for…
Desirability: If a beach is beautiful yet cannot be reached, few people will come. If—as in the case of the white-sand beach of Tulum on Mexico’s Caribbean coast—a four-lane highway is constructed running from a massive international airport just a few hours’ flight time from a huge U.S. market…
You get the point. I’m interested in places people can access easily and want to be. Great weather, lots to do, beaches, an enviable lifestyle…
The 26 miles of perfect white-sand beach have always been in Tulum on the Riviera Maya, Mexico’s Caribbean coast. But it’s only when the infrastructure was improved that millions of people started coming to visit and stay long term.
Technology is the next element I want to see intersecting with the Path of Progress. It wasn’t the advent of new roads alone that created the Florida real estate boom of the 1920s. It was the collision of a number of new advancements. The automobile meant people could drive to Florida on those roads. And air conditioning made Florida a more desirable and livable place to be.
Technological advancements like these continue to transform destinations today…
For instance, the internet now means many people can stay long term and work remotely in highly desirable places like Tulum, the Costa del Sol in Spain, or Portugal’s southern Algarve region. This in turn means in many places that were traditionally considered vacations spots, renting long-term can generate double-digit gross rental yields that some years ago you would only expect renting short-term.
Ease is the third and final element I look for. It has to be easy for mobile people and businesses to set up and be in the place. It has to be easy for us to buy, rent and sell real estate…easy for everyone to do business.
Some governments (both local and national) do smart things to attract money, business and affluent people and thereby create a virtuous circle, driving development. Other governments do the opposite. Take Vietnam, where I’ve found stunning beaches, beautiful mountains, thriving cities, and modern infrastructure. Within the country there are places that jump out as desirable, with good roads, good internet…which had all the elements we seek except one: It’s just so hard!
The visa and residence situation is a morass, doing business is a nightmare, owning real estate impossible…forget it. People want “easy places.”
In a nutshell: To find out where people are going I look for a Path of Progress in a place that’s desirable and easy, and where technology intersects to make it even more accessible, desirable and even easier!
This is the mix that sends real estate values skyrocketing. You want all three elements working together to create a big transformation. During this big transformation, people will come. Lots of people. And by buying ahead of them, we can see big potential gains.
Finding the Perfect Moment to Buy In
It’s important to note that you don’t have to be there at the very start of the transformation. This is something many people misunderstand.
I have contacts on the Riviera Maya whose grandparents bought virgin land in what was then the middle of nowhere in the belief that someday it might be worth something. That pays off if you nail it and get lucky. But you need the right land parcel and you need everything to come together in the ensuing decades. I’m talking new roads and airport terminals, utilities, zoning, permitting…
Get it right and wow, great play. But the risk is high and the wait can be very, very long.
I mean, what if the road doesn’t come? Think about it this way, plenty of investors lost their shirts trying to predict the routes of the railroads in 19th century America.
The subsequent phases of the big transformation is where things gets interesting for us. As a conservative and risk-averse investor this is where I’m most comfortable. This phase is when the infrastructure is in place, or well on the way. People are already coming. Visitor numbers are rising. We have “proof of concept.” This is the time to buy in…if the price is right.
The Riviera Maya’s mammoth transformation has turned it into one of the most popular tourist destinations in the world.
Sixteen years ago this month, I founded my group Real Estate Trend Alert, bringing together like-minded real estate investors who understand, like me, that there’s always opportunity somewhere when you look everywhere.
Sixteen years ago this month, I founded my group Real Estate Trend Alert, bringing together like-minded real estate investors who understand, like me, that there’s always opportunity somewhere when you look everywhere.
When I’m on the road scouting, I’m looking for transformations that are already underway. Then, with the collective buying power of our RETA group, I negotiate an off-market deal with a best-in-class developer there. By buying at this point in a transformation, and owning at killer discount prices that ordinary investors never see, we can get huge uplifts.
So, it’s a matter of finding the right real estate in the exact right location. And the right developer with which to do a RETA deal. (A good start is someone with a serious pedigree of delivering outstanding communities and whose grandparents bought land decades before.)
That’s what I’m looking for when I’m on the road.
A moment when the big transformation still has years, maybe decades, of growth ahead but the trajectory is clear.
“Decades?” I hear you say. Yes, Big transformations are often decades-long, with temporary pauses followed by periods of breakneck development. There are twists and turns. But over time big transformations go one direction. And, if you get the right real estate at the right price, the value of what you have goes only one direction, too: up.
Here’s an example of what I mean…
The Mammoth Transformation of the Riviera Maya
For two decades I’ve been scouting the Riviera Maya, and for another four decades before that it’s been undergoing a mammoth transformation the likes of which I’ve only seen surpassed by Asian mega-cities and oil-rich Middle Eastern metropolises.
On Mexico’s Riviera Maya, the Path of Progress started in Cancun, and ran down the coast to the beach city of Playa del Carmen, then to Tulum. Almost a perfect linear path.
My RETA group was ahead of this transformation as development pushed south. And we’ve seen huge uplifts as a result…
$234,900 Uplift in Tulum—I brought RETA members a deal in the chic beach destination of Tulum in 2019. Members could own two-bed condos in a straight line.
- $234,900 Uplift in Tulum—I brought RETA members a deal in the chic beach destination of Tulum in 2019. Members could own two-bed condos in a community called Gran Tulum from just $175,000. The last time I talked to the developer, they said two-bed condos there were listing at retail for $409,900.
- $309,018 More in Playa del Carmen—In 2021, RETA members had the chance to buy two-bed condos in a community called Singular Dream in the beach city of Playa del Carmen from $265,304. In early 2024, a two-bed condo in Singular Dream was listing for $574,322.
- $222,000 Gain in Akumal—In 2019, I brought RETA members the chance to own luxury condos on Mexico’s Caribbean coast, from just $174,800. A two-bed bought here for $178,000 later sold for $400,000.
- $225,609 More in Playa del Carmen—In 2017, RETA members could own two-bed condos in a community called Siempre Playa in Playa del Carmen for $193,800. In November 2023, retail prices for two-bed condos in the community started from $419,409…that’s $225,609 more than they paid.
Today, I continue to track this megatrend in the Riviera Maya. And my team and I are constantly looking for new transformations like this all over the world. (Learn more about RETA and how you can join here.)
Today, I continue to track this megatrend in the Riviera Maya. And my team and I are constantly looking for new transformations like this all over the world.
Today marks my first day scouting Huatulco and Puerto Escondido, and I’ll be analyzing these destinations through this lens.
These destinations have been experiencing significant growth and investment. In 2023, the Mexican government committed $4.6 billion to new infrastructure in Oaxaca. This will fund projects like the construction of around 2,200 miles of new highways and roads, and the expansion and remodeling of Puerto Escondido airport, which is set to come online in summer this year.
Does this constitute a Path of Progress…the sort of megatrend that could bring big numbers of new visitors and expats, and push these destinations to whole new levels?
I’m putting boots on the ground to investigate. Stay tuned…
Ronan McMahon, Overseas Real Estate Expert
P.S. The Riviera Maya is one of my 10 best places in the world to buy real estate in 2024. To learn the others, check out this brand-new video guide to all 10 places. This video showcases destinations like Tulum and Playa del Carmen on Mexico’s Caribbean coast, a historic town in northern Portugal, and a thriving city on France’s southern Mediterranean coast. Click here to watch this video now.
Your Daily Dream Home
Bihor, Romania
This charming cottage is in the Piatra Craiului Mountains in central Romania.On the first floor you’ll find a living room, kitchen and a bathroom. The second floor has three bedrooms and a bathroom. The property also has a sizable terrace with views of the hills and valleys.
Remember, we don’t make money from any listing shared here in the Your Daily Dream Home section. We have no dog in the fight. We’re just sharing cool properties we’ve found.
I haven’t visited this property or done due diligence on it. If you’re interested in the listing, you should hire an attorney and do your own due diligence.
