He already knows how it will be paid for — by “baby boomers,” children from a post-war birth spurt now on the cusp of retirement, who will seek villas like the one he snapped up in Bali two years ago.

Now worth more than double the US$45,000 he paid, the two-bedroom villa and plunge pool in Bali’s only self-proclaimed retirement resort is rented for US$70 a night for about two-thirds of the year, mostly to elderly Europeans fleeing the cold.

With the first U.S. baby boomers due to get their first social security checks in February, and rapidly aging and increasingly affluent populations in many developed nations, several Asian countries are stepping up marketing campaigns to attract investments from retirees.

Asia’s lure of cheap living and sun is strong, especially at a time when developed nations fear the surge of retirees will buckle their health and pension systems.

But property experts say investors are taking big risks, although returns can compensate.

Few dream resorts stack up as solid investments for typical second-home buyers, who are in their 50s and keen on some returns in the run-up to retirement.

Daimon gets 65 percent of the income from renting his villa — the developer takes the rest — giving him an annual investment return of about 22 percent.

“Right now the profit is so-so, but in the future I expect much more,” Daimon said, hoping a new spa and planned Balinese cooking classes will help push up occupancy and rents. “If I’m lucky I’ll retire when I’m 55.”

The Thai island of Phuket, with its golf and beaches, has seen land prices in many areas shoot up five-fold in three years.

But although foreigners can own apartments, they must set up firms technically owned by Thai nationals if they want land, a tenuous legal loophole that politicians have been eager to close.

In Bali, villas are usually sold on 25-year renewable leases to skirt a law against foreign ownership. And with seafront villas going for US$700,000, rental yields are often low.

“You talk to these people in the finance industry and they dream about having a house on the beach,” said Tim Murphy, whose firm Intellectual Property has sourced US$200 million worth of property for clients in Hong Kong and Singapore in two years.

“But then suddenly the left side of the brain kicks in, and they worry about rental yields and liquidity,” he said. “People are really conflicted about whether to go for the retirement aspect or the investment aspect.”

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