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| Feature |
The Private Resort Home Market: An Investment Outlook
John Ferry Additional Research by Daniel DelRe
06/01/2005
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Dian Hodge, who
bought a property in Lake Las Vegas, a large resort development 17 miles from
Las Vegas itself, says the investment potential is one of its attractive
features. The development is set around a 320-acre manmade lake in the desert
mountains of southern Nevada; parts of the development resemble an old-world
Mediterranean village.
 | | LAKE LAS Vegas, Nevada |
Hodge and her husband, now in their 60s, have invested
in a number of high-end properties over the years; she explains that they
generally prefer putting their money into real estate rather than into the
equity markets. “We enjoy going to different places and seeing land and housing
opportunities,” she says.
The Hodges have extensive business experience: She
worked internationally in the cosmetics industry; he is a former chief executive
of a company that created electronic hospitality systems, such as pay-per-view,
for hotels. In 1998, they made their first investment in Lake Las Vegas on the
lot that has become their primary residence. They purchased a second lot there
three years ago, and are selling that property now. “It’s been on the market
maybe a month and a half and already we have an offer on it,” she says.
For the cabin
that we’re building,
I’ve seen about 60 percent
appreciation on paper. The lot has gone up by about 110 percent
in a year. |
Hodge
will not divulge how much she paid for her properties, but she says that prices
in the community are booming. “I know that a lot across the street from us sold
a couple of years ago at $695,000, then it went to $960,000 and right now it’s
on the market at $2.2 million,” she notes.
Sigourney, like the Hodges,
believes he made a wise investment. “Even though we’re thinking of flipping the
lot in two or three years’ time, we’ll probably then buy something else in
Spanish Peaks,” he says. “We want to own as much as we can there. It’s an
awesome place and an awesome opportunity.”
Not all high-end properties have
outperformed the broader real estate market, and not all of those that have
excelled will continue to do so. The crucial factor in whether a property will
satisfy both as a source of enjoyment and, longer term, as an investment, is its
singular quality, developers, buyers and real estate economists agree. “I think
the unique properties do outperform the broader real estate market,” notes Ron
Hatfield, the developer of the Villas del Mar resort community in Los Cabos,
Mexico. However, he cautions, “Once you get a product on the marketplace that is
easily reproducible, it is very hard to maintain a market value; it is certainly
hard to have any appreciation.”
 | | YELLOWSTONE CLUB, Montana |
Builders of high-end resort communities therefore make it their business
to find and develop unusual settings. Steven Elliot, chief executive of Lyle
Anderson, a residential developer based in Scottsdale, Ariz., says it is
becoming increasingly difficult to come by extraordinary venues for these
communities. “There are constraints in terms of where [local authorities] would
like to see developments go and how they would like to see development take
place,” he explains. Local planning and zoning requirements in many prime
locations can be significant hurdles; there are often also environmental
regulations with which to contend, he notes.
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