Overseas property markets move through phases. Each phase attracts different kinds of buyers and different kinds of end users and presents different levels of opportunity, as follows:
Phase I. During this very early, predevelopment stage, a market attracts adventure seekers, backpackers, experienced world travelers, and men seeking women (think Asia and, closer to home, Colombia, for example). During this phase, real estate prices are low and unmoving. To buy, you must penetrate to the local market, because no nonlocal market exists, and you must either have a strong tolerance for risk or just want to own something in the place because you like spending time there.
Phase II. If a place has merit and value, eventually word-of-mouth and personal referrals begin to drive traffic to it. During this still predevelopment stage, a market sees its first more mature couples, foreign retirees, virtual employees and entrepreneurs, early commercial and business inquiries, and speculators. A nonlocal market emerges, and values begin to appreciate, slowly.
Phase III. When a market establishes a reputation for value and merit, speculators give way to investors and backpackers are overtaken by retirees and expat entrepreneurs. Institutional investors begin to move in, the second-tier (nonlocal) market becomes more sophisticated and more competitive, and second-home buyers begin shopping. It is during this phase that a market sees its highest rates of appreciation.
Phase IV. An established ...