In 2006, the first Baby Boomers began to turn 60 years old. They are just the first in a massive wave of soon-to-be retirees seeking affordable housing, sunshine, safety and quality of life. It is not just the retiring Americans, there are also Canadians, Germans, Swedes, British, Italian, French and others that are looking to escape unfavorable weather, poor economies, expensive housing, crowded suburbs, complicated health care systems and unfair tax burdens.
Since it is becoming obvious that most retirees will be unable to afford the lifestyle they want in the United States, many are retiring to destinations such as Costa Rica. As a result of this international trend, Costa Rica is experiencing the early stages of a land boom. Costa Rica's real estate market will absolutely have a long-term sustainable boom because it is based upon new flows of wealth, not just speculation or currency and interest rate manipulations like the United States real estate market.
So how can you profit from this trend? You can invest in raw land, single family housing, town homes, and luxury rental units. Investing with this trend in mind doesn't mean you have to, need to or even plan to retire in Costa Rica, anymore than you need an engineering degree to invest in a technology mutual fund or a medical degree to invest in a biotech fund! It is just the most prudent and timely investment you can make.
In addition, investing in real estate for your retirement may serve as a means to diversify your retirement portfolio. You now have a way to hedge against the cyclical changes in the stock market, bonds, the economy, and bank and government based investments. Land and property are loosely correlated to the stock market; the value of real estate tends to rise when stocks are going down. Real estate is the ultimate hard asset. There are no corporate and accounting scandals. It is a tangible asset, and not just a paper certificate. There is great downside protection because real estate inherently maintains value, as contrasted with stocks, where the entire investment could go to zero!