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Expand Y our Proper ty Por tfolio

investment. Without a doubt, demand for retirement /second home property
will remain strong from both retirees and baby boomer investors.
Combine this demographic age wave with increasing longevity, and you
can see a continuing boom in prices for properties located in areas that become
favored vacation /retirement spots. If you wish to invest for high appreciation,
search out the towns, cities, and rural retreats that will be favored by this com-
ing age wave. In fact, many property investors now look for areas that will
gain from both creative class and age wave demographics.

Where to Invest

You can identify soon-to-be vacation /retirement meccas in the same way
that you can identify emerging creative class locations. Talk with future reti-
rees. What areas are achieving attention and increasing popularity? Personal-
ize, then generalize. What locations seem attractive to you, your family, your
friends, and your coworkers? Pick up a pile of books and magazines with titles
relating to where to retire. Look for ideas, not answers. Whether you rely on
information from publications or people you know, invest only in areas where
your independent study reveals promise.

Income Investing

Many people who buy vacation retirement properties plan to rent them out
part of the year and personally enjoy the property at other times. Although this
strategy can work well, watch out for exaggerated estimates of rental revenues.
Demand for seasonal rentals varies according to weather (too much
rain, too little snow), traffic and transportation issues (road construction,

cost and availability of flights, etc.), and negative publicity (the SARS scare
slashed travel to Toronto and Hong Kong). In addition, to manage vacation
and seasonal rentals, vacation management companies charge 20 percent to
40 percent of gross rental receipts. For a full discussion of this investing
strategy, see my book, The Complete Guide to Second Homes for Vacations,
Retirement, and Investment (Hoboken, NJ: John Wiley & Sons, 2000).

Commercial Properties

Nearly everyone is familiar with investing in houses, condos, and apartments,
but relatively few people realize that commercial properties also offer sub-
stantial promise. In today’s real estate market, many commercial properties

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