There is a popular misconception in the property world that all popular tourist destinations make for good property investments. Actually, that is a bit unfair, because most do and the number is growing as will be explained. However, buying in a popular and/or rising tourism destination is not a property investment strategy.
A strategy for investing in property involves choosing a location with strong demand from a solid and growing target market, which could be a popular tourist destination, but then you research the supply and demand fundamentals and choose the right property in the exact right location and with a reliable exit strategy in mind. Another thing to remember is don't take property investment advice, or what you read in a property investment guide as read, only listen to independent sources, and verify everything with your own research.
For example, according to the press North Cyprus' status as a popular tourist destination made it a fantastic place to invest. And many Britons happily purchased properties in the region at what seemed like unbelievable prices. As it turned out many of them should have listened to their this-is-too-good-to-be-true gland, because dozens of them have had to fight court battles with the Greek Cypriots dispossessed of the land their properties now stand on, but others still have found their investments not to be what they hoped for.
Many of the towns people bought in were off the beaten track, which was apparently part of the investment appeal; it made prices lower and the upside even bigger during Cyprus' rapid growth. Nobody told them that they were buying in what would become ghost towns every low season. As you may know, a part of the investment property strategy of buying in hot tourist destinations is to earn rent in the high season, and have personal use in low season, but this only works if there are at least some shops and restaurants open in the immediate area -- can you imagine Brits going even a week without milk for their tea?
Another common pitfall is when people buy in areas that are saturated with rental properties, or even saturated with cheap hotel spaces. However, the latter is less of a problem as more and more holiday makers book their own holidays in private accommodation as awareness is raised of the increased value this provides.
Then there is the perfect holiday home investment. My mind always wanders back to the Levi Ski Resort in Finland. This is the resort in Lapland where they hold the alpine ski championship each year, and there was only a single development on the resort, which was ski in ski out and offered properties at incredible value for money. Obviously we had a top ski resort, but it was packed with activities for the summer, and had a retail park and nearby town. Unsurprisingly the properties carried a 7% guaranteed rental yield.
That is one thing to look out for, a guaranteed rental yield, but again research can tell you who is benefiting most from being locked into such a guarantee. Often properties with guaranteed rental yields are capable of making more than the guarantee on offer. Another thing is to buy a property that you will be able to use, and that will be a solid asset regardless of rentals. Seek advice on property investment in the first instance, but never as a substitute for research, and the best advice comes from independent sources.