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| Luxury Real Estate Investment |
Assessing Your Exposure
Elizabeth Harris
04/01/2007
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Many second-home buyers make their acquisition decisions
primarily based on lifestyle requirements, overlooking the possibility that
their chosen haven could decline in value. When divining the future performance
of a second home, remember these factors:
 Determine a prospective property’s actual value by calculating the
cost of rebuilding the home; take into account rising construction costs,
which have increased by about one-third in the past three years.
Seek unusual properties with
limited potential for future development.
Consider resort communities that offer year-round activities. Look
for a ski chalet with plenty of summer-weather options, such as golf,
horseback-riding, hiking or fly-fishing.
Find developers whose other communities
you like—and buy early.Illustration by C. J. Burton.  Back to Main Article: Luxury Real Estate Investment
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