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While the world's financial and real estate markets are thankfully calmer than they were a year ago, the underlying threats haven't completely disappeared. More than ever, investors require sound strategies toward diversification, and investing in high-quality resort real estate in places like Costa Rica offers a great inflation hedge as well as a place to enjoy for years to come. The "safest" real estate investment is found in an existing four-star resort because the barriers to entry are very high, so your investment won't face serious competitors. Meanwhile, demand is surging as affluent Baby Boomers seek a place in the sun with first class amenities.

Luxury Square Footage as a "Hard Asset"

To win at this new game, you'll want to change your perspective on land, houses, or condos and start considering them tangible "hard assets" which will help retain purchasing power if the currency falls in value; rather than strictly considering them vacation or retirement homes. Luxury condominiums in Costa Rica, for example, are in very limited supply and it's simple to visualize the dramatic rise in value due to that scarcity. This is an established market with proven demand: The Marriott-anchored Los Suenos resort on Costa Rica's red-hot Central Pacific Coast, for example, has done over $1 billion in condo sales in the past seven years.

Tightening supply always drives demand, and tracking from Costa Rica tourism studies shows an increase of 113 percent in visitation the past three years while hotel rooms have increased only 28 percent during the same period. The same report shows Costa Rica's highly desirable 100-mile Central Pacific Coast having only 942 four- and five- star hotel rooms. In this case, the study's authors took a very liberal view of what constitutes a luxury hotel room, so the actual supply of truly upscale units is in truth much lower. Presuming that luxury hotel rooms equate to luxury condos, this report shows a severe and growing shortage. Again, when supply is constrained and demand increases, the only direction for prices to go is up.

From $150- to $750- per square foot in Seven Years

Seven years ago condos at Los Suenos cost $150 square foot; the price reached $850 square foot in 2008 and is now settled back to about $750. The Four Seasons in Papagayo is getting $1,200 square foot because the market has changing from the early adapter "Indiana Jones" types who tromped up and down the coast line 10 years ago, to a more mature and demanding resort-minded buyer. These people want "Cabo in Costa Rica" and are willing to pay for it. They demand first-class amenities rather than a bohemian experience. The good news is buyers are bidding up the price.

Del Pacifico at Esterillos has benefited from this demand. Situated between Los Suenos to the north and the Manuel Antonio National Park just 25 minutes to the south, the 700-acre master-planned community has become one of the five largest developments in Costa Rica. This trend should continue because affluent and aging Boomers are driving up the demand for high quality and secure environments.

Investor Checklist

The transaction and procedures surrounding the purchase of property in the types of resorts we've discussed here can be as safe and as easy as buying in the U.S.

1. Sixty percent loan-to-value mortgages are available. These are typically non–recourse, low-document loans.

2. The home equity line on a U.S. property is most often the financing of choice due to lower interest rates and less hassle. The use of IRA funds is seeing some growth.

3. In many countries, particularly those that evolved from British rule, foreign investors enjoy the same rights to ownership as citizens. Stewart Title, Chicago Title, and First American Title can issue titles.

4. Consider accessibility to property, as it greatly influences values. In Costa Rica, direct flights are now available from 12 major cities, and Costa Rica is just three hours or less from Atlanta, Charlotte, Dallas, Ft. Lauderdale, Houston or Miami...and under six hours from Denver, New York and Philadelphia.

For the affluent investor, Costa Rica is "the full package." The climate is fabulous, the government is stable, the people are welcoming, the health care system is excellent and the scenery is spectacular. It's tough to find a better investment under the sun.