Today, with the recent culmination of the long boom in real estate values and home equity, now many Americans have far more of their wealth in their home and investment properties than in the conventional investment markets. I work in real estate and believe it would be imprudent to discuss my views on the real estate boom and temporary downturn in some markets but I will direct you back to my warnings and the books on booms and manias.

Future terror attacks will either be a major weapon of mass destruction attack, if the Islamic terrorists can obtain a weapon or more broad based conventional attacks probably at multiple targets with the intention to shut down the American economy. Either style of attack will be targeted at major metropolitan areas although I believe a WMD attack will go after our financial markets in New York City.

The problem for property owners in and around big cities and the suburbs is once we are attacked again, the public will undoubtedly panic and the government will as usual probably overreact.

Attacks on suburban malls or major office buildings and metro transportation infrastructure will scare the public and homeowners and commuters will quickly become paranoid about our large metropolitan areas. You'll see police and national guardsmen at all mall entrances as well as major restaurants, shopping locations and office complexes. Remember the terrorists understand the weakness of the United States is our economy and their goal is to shut it down.

These fears will likely negatively impact property values in and around potential city targets and strengthen values in outlying areas where many families may want to get a way to for the duration of the threat. We also have to consider that the terrorists will likely continue the attacks at a low level for a long period of time in order to continue the public panic. It is impossible to protect every mall and office building across the U.S., so this kind of subsequent attacks could easily be accomplished.

If you share my view that there is substantial risk of future terror attacks as I've outlined, the solution is simply to over time diversify your real estate properties outside what could become threatened locations. You must do this before the next major attack happens as with your financial assets and products, it will be too late to protect your assets after the attack.

The prime locations to diversify your real estate portfolio is anywhere outside the threatened major cities and suburbs either in second home resorts a few hours outside potential target cities, rural areas and of course internationally in locations where you already enjoy or will appreciate vacationing from time to time. In many of the international real estate locations we will mention, the property values will also be outside the threatened dollar which will become another negative to property values inside the United States in addition to the location.

Vacation/Second Homes & Rural Property Will Likely Benefit 

When the next major attack hits, whether a single city targeted WMD attack or a conventional bomb attack against a number of target areas, many Americans will want to flee the major cities and suburbs and spend some time in less threatened out of the way locations. If they already have a home or condo in a rural or vacation area, the popularity will increase. Rentals will increase and property values should move up as the attractiveness of having a getaway from the large city areas will become apparent to everyone in the threatened areas.

Foreign Real Estate Outside the US Will Not Be Affected & May Benefit

Just as we earlier advised readers to diversify into investments, currencies, financial products, custodians and investment advisors located outside the United States and the dollar, we also suggest the same type of diversification with a portion of your real estate properties. Real estate is often all about location and since the U.S. real estate market is broad and not held hostage by all purchase and sales transactions on a market exchange like the New York Stock Exchange which is the number one terrorist target in the entire United States, therefore any offshore real estate diversification should be limited.

We advise limiting your offshore real estate to jurisdictions that interest you for a vacation or retirement property and where you know the country and the real estate market quite well. Second, keep your offshore property diversification amount and percentage far below what you will do with your financial assets.

Finally, although the dollar is losing its status as the world's reserve currency for central banks and foreign investors, our paper dollars are still the currency of choice for illegal cash economies, many third world countries and the drug cartels around the world. Several of our offshore property locations often price their real estate in U.S. dollars so in these jurisdictions, you will not get the currency play kicker should the dollar fall in value as we expect in the future but currency play isn't a big advantage in our offshore real estate recommendations.

How to Get Started Diversifying Your Real Estate Exposure to Terror Risk

Since there is no certainty as to timing of future attacks, take your time and slowly decrease your real estate over exposure in large metro areas that might be potential targets or perceived by the American public as likely secondary targets following the next attack. If you have asset protection risks and concerns or want some international diversification, consider some offshore diversification.

Ron's Recommended International Safe Haven Locations

Canada - Unless you are in Quebec, Canada is much like the United States but without the risk of empire and our foreign and military policies around the world. Vancouver Island in British Columbia is one of my favorite locations for Americans living on the West Coast.  I lived in the French part of Switzerland and frankly love Quebec but there is a language barrier. The Canadian maritime providences have a lot in common with the rural areas of our New England states.

Costa Rica - Costa Rica has been called the Switzerland of Central America and it has a great location and climate. The mountain areas moderate the temperatures and the Pacific coast is like buying California coastal property at 10 cents on the dollar. My preference is the coast and we I suggest the Del Pacifico Resort currently being developed by my old friend, Barry Strudwick out of Baltimore. Another option is the Guanacaste area on the North Pacific Coast and if you have school aged children, there is an excellent private school in the area. For more information visit http://www.delpacifico.net/ - Barry Strudwicks exciting development near Jaco and quite convenient to the international airport at San Jose. Or http://www.remax-oceansurf-cr.com/index.php - A great real estate firms specializing in real estate on the North Pacific coast.

Turks & Caicos Islands - I have spent a lot of time here over the last 26 years and they have the most beautiful beaches in the entire world. This British Crown Colony made the decision to market themselves to an affluent tourist cliental and luxury real estate developments. The main island is Providenciales and this is where all of the development is taking place. No crime, wonderful beaches and island lifestyle and a quick flight out of Miami. For further information visit www.remax-tci.com

Ron's Recommended Safe Haven Locations in the United States:

Wherever you might buy property, first make sure you like the area and will enjoy having a vacation home or retreat there. Second, always buy north or west of the potential target city. Finally, take your time and really get to know the area, the people and the lifestyle of where you are considering buying a lot or building a second home.

Escape From Washington, DC - Our #2 most likely terrorism target in the United States but we know they won't hit here because what would our nation do without the hundreds of thousands of lobbyists, politicians and bureaucrats who inhabit, rule and tax us from this cesspool on the Potomac. Remember, the Islamic terrorists are out to destroy our economy not help us.

Wisp, MD - The Wisp Resort and Deep Creek Lake provide reasonably priced property values with lake activities in the summer and Wisp skiing in the winter. Other than the Lake Placid area of New York and Mont Tremblant in Quebec these are  the only combination lake and ski resorts in East. www.wisp.com

Canaan Valley, WV - Highest elevation valley in the East with great state parks and summer and winter resort activities.  www.canaanvalley.org

Snowshoe, WV - A unique Intrawest mountain top vVillage with great restaurants, entertainment and year-round outdoor activities plus the best skiing south of Vermont and New Hampshire.  One of the best four season mountain resorts in east of the Rocky Mountains and my personal favorite mountain resort but there are two disadvantages. It really is in the middle of nowhere, sort of a combination of Whistler and Vail Resorts with great snow, all on a mountain top but not close to anything. Great place for a second home but as a permanent residence forget it due to the distance from schools. Visit www.snowshoemtn.com or www.snowshoemountainhomes.com

Escape From New York City - The most likely terrorism target in the United States. Anywhere outside North East Metro Areas i.e. Upstate NY, Vermont, New Hampshire & Maine Pick your spot, just put plenty of distance between you and the city and hope the wind isn't blowing from the south.

Escape From Southern Metro Areas i.e. Florida, Charlotte & Atlanta

Wolf Laurel - I live here so this is sort of a self-service recommendation but a great place for a second home, only 35 minutes north of Asheville and 4 miles off the new interstate highway. See www.ronaldholland.com if you would like more information.

Boone, Banner Elk - Great mountain towns and resorts west of the highly populated metro area that runs basically from Greenville, SC to Raleigh, NC.

Elsewhere in the country, anywhere outside of large Metro Areas preferably north or west of potential target cities and a minimum of 150 miles out the city.

Our real estate investments could also be impacted by a future terrorist attack depending on the where we live and own properties. The solution is to diversify your real estate geographically outside large cities and suburbs as well as internationally. - Ron Holland.