Global real estate seminar on tap

Visiting realtors will offer property overviews in foreign markets

Friday, January 11, 2008

EDMONTON -- Six realtors will visit Edmonton to discuss property in foreign markets from Costa Rica to Hawaii.

"Rather than having my clients go to all those places, I'm bringing people here," says Re/Max realtor Rhonda Navratil, who is organizing two no-cost, no-obligation seminars.

On Jan. 30, at Coast Terrace Inn, realtors will discuss investment, vacation and retirement properties in Costa Rica, Palm Springs and Kelowna.

In late February or early March, a second event will feature realtors from Arizona, Las Vegas, Hawaii and possibly Belize.

They will show examples of properties and prices in each location but will not be selling real estate, partnerships or time-shares, Navratil emphasizes.

"It's more educational," she says. "They'll talk about the markets, the products and some ramifications of ownership and financing."

After the three, 20-minute presentations at each event, audience members can meet individually with the speakers, she says. "I don't want any hard sales pitch."

Navratil says she is organizing these events in response to interest expressed by clients -- and her awareness that many Edmonton residents are buying property in warm-weather destinations.

"A lot of it is because of the doom and gloom in the U. S. market" which, combined with the high Canadian dollar, has made American properties more affordable, she says.

Navratil cautions that Canadians must educate themselves before buying into any location that they don't know well. For example, homes in Florida may appear attractive "but hurricane insurance can cost $10,000 per year."

In contrast, "Costa Rica is not on the hurricane strip," she says. "It has a stable government, and you can drink the water anywhere."

Steve Blakely, president of Servus Credit Union, says prospective buyers should realize that they cannot arrange a mortgage on foreign property through an Edmonton bank or credit union.

However, some people with substantial equity in their Edmonton homes have re-mortgaged those homes to get cash for a foreign-property purchase, Navratil says.

Don Campbell, president of the Calgary-based Real Estate Investment Network, who will not be speaking at the seminars, says buyers of foreign property must "do their due diligence" in researching the foreign venue.

"Never buy sight-unseen," he says. "In any tropical region, visit in high season but also in the worst season, so you are not enamoured by the four or five fantastic months when the rest of the year is rainy and mucky."

Also, in the tropics, "know the laws of that country," Campbell says.

"Can you actually own property, move in, rent, and sell?"

In any exotic destination, "be sure you're paying the local price," he says, as sellers may ask more from an affluent foreigner than they could get from a local sale.

Even then, don't be seduced by an apparent bargain. "Make sure you're buying not because it is cheap but because it has potential for growth," he says.

"A lot of places look cheap but will be cheaper in a couple of years because the fundamentals are not there to support it."

In the United States, Campbell says, "the market has $750 billion more of adjustable-rate mortgages to be reset by December 2008." As they face renewal at higher interest rates, more foreclosures will occur, "so the market will get worse before it gets better."

When buying revenue property, Campbell says, investors should get solid information on vacancy rates then, rather than over-estimating the rents they will receive, "pretend you are a renter," and see how cheaply you could rent an apartment.