RETA

Real Estate Trend Alert

By Ronan McMahon

Barriers to Entry: Where to Find Them, How to Profit From Them

Warren Buffett is the world’s richest and most successful investor. He looks for businesses with what he describes as “barriers to entry”. That’s something special or unique that insulates them (and their margins) from the ravages of competition.

Examples of such a barrier might be a brand like Coca Cola…or the scale, cost base and buying power of a Walmart…or other protections like a patent or monopoly. These barriers make it difficult for competitors and keep sales and margins strong.

On my beat of scouting for undervalued international real estate, I look for property opportunities with similar protections. Nothing undermines real estate appreciation potential like a flood of supply. That’s why we look for a barrier that will prevent a flood of supply of similar units. Plus, a very special attribute that’s difficult to find elsewhere.

This reports explains where to find barriers to entry on the global real estate market and how to profit from them.