I'd invest in real estate where the general voting population is predominantly Libertarian (not Leftist in favor of regulating & soaking the rich). Also, low or no heavy ownership or carrying charges, like the crazy high taxes on property in places like California. Monaco is the only place I can think of. But unfortunately, the prices there have always been the highest in the world. Why? Because the super rich of the world can buy a place, get "legal residence" there in Monaco and pay NO income tax and no property tax.
Thirty years ago I looked at a very nice large 60 m2 studio ocean front super view apartment in the Monaco Star Condo. It was about $500,000 then. For less than that money I could buy in France, across the street, a newer, better apartment 3 times as big --which is exactly what I did.
What happened in the following 30 years?
The French building got older and needed more and more updating & costly repairs (like a new roof, new pool, plumbing, heating, etc.)
I paid roughly $2500 every month in taxes & other charges on the French condo. It went up in value from $350 to $3 million, in spite of zoning changes & a new apartment building , now partially blocking the sea view. Ths reduced the value by maybe 20% of what it would have been.
The Monaco studio apartment also incurred charges for repairs, modernization & upgrading. As workers & materials are more expensive in Monaco, it was about the same: $2500 a month over the 30 years.
Just like people (ha ha me!); All improved property gets older and needs repairs, even in Monaco. Two years ago, the market value of the studio was over $5 million ... Thus, values in Monaco increased more (in %) than in the nearby French Riviera. Then there was a landfill in Monaco, & a new building that cut off the sea view of the Monaco Star. This reduced the value of the studio by about 20% of what it would have been.
What's the moral of this story? What should you take away?
1) Real Estate in any good location will seem to go up in value by maybe 5 to 10% a year. But that is mainly because the value of fiat currency (paper money) is going down by that much. Obviously increasing demand for good location property makes the real value go up by even more than that.
2) Property in bad locations or even less good when things like the view being cut off can & will decline in value.
3) It is hard -- impossible to predict the future, although you can usually make a good guess based upon past performance and trends.
Bottom Line?
Where to buy now?
Usually, 1) any great URBAN locations where holding costs are low to nil & prices are very depressed. One such place is -- Biella, Italy, where prices are maybe 1/4 of similar places in Italy. This is way below most of Europe aside from Bulgaria and other undesirable locals. How about CHINA? Vietnam? Cambodia? Other places in Asia?
2)Places where the sentiment is not against property owners and landlords.
3) Always go for good quality construction!
4) I have found that using my "hundred house rule -- explained in my book Think Like A Tycoon" & seeking out DISTRESS PROERTY anywhere, to buy at under 1/2 of market value in an active market. You solve the problem(s) -- maybe by fixing the place up cosmetically ... Then you simplyrent & hold for appreciation or sell for a quick 50% profit. This has always been a sure money maker.
And that, my dear reader, is my 2c for today. Peter Taradash
