There’s a saying in real estate: “you only make money when everyone else is sleeping.” Which means, basically, that once everyone knows about a “hot neighborhood,” there’s no more real money to be made investing there. (I wish someone would explain this to all my friends who keep bugging me to help them flip houses in Petworth because “they read an article about it on the Internet.”) So where should you sink your money into property if you want to make, oh, a few thousand percent profit in the next decade? Well, I have some suggestions.
It’s easy to mock China’s many empty cities, after they went on an insane decade-long binge of overbuilding, but here’s the thing: all those apartments won’t stay empty forever. Chinese economists and policymakers have come to the conclusion that unless they raise the birthrate there, their economy is going to go into a long, painful decline. And if there’s one thing that Chinese government care about, it’s their economy. Most experts agree that China will soon abandon their notorious “one child per couple” policy, which will probably lead to a population boom. Then all these stupid fake European cities will go from desolate to packed. If you’re patient enough, you could reap huge profits, even when you take into account the comically huge hit you’d be taking on the dollars-to-renminbi exchange rate. When you consider that some observers are predicting a huge downturn in the Chinese real estate market, we might be looking at the perfect storm of investment opportunity. (Pretty sure Al Pacino used the phrase “perfect storm of investment opportunity” at least twice in “Glengarry Glen Ross.”)
If I was a college graduate today, I would move to Detroit. And lo and behold, that’s what a lot of recent college graduates are doing – Detroit’s Millennial population skyrocketed almost ten percent in the past few years. Usually there’s one or two neighborhoods per city that are abandoned and ripe for “revival,” but here’s an entire city like that! Talk about “old bones” – this used to be the #1 city in America, and now it’s America’s primary producer of disaster porn. The days of the $1 house are probably over, but you can still pick up a rambling four-bedroom in Detroit for less than the cost of a crappy hatchback. Renovate and wait a few years, and you could sextuple your investment by selling to a Brooklyn high-rent refugee.
Okay, I’m not exactly the first one to think of this either, but still. Reports say that prices on swank island villas have fallen by a third in the past four years, while real estate prices in major Greek cities like Athens have fallen by half. And when Greece (probably) exits the eurozone in the next few years, after failing to make payments on their draconian debt settlement with the rest of Europe, prices will fall even lower. Possibly a lot lower. The downside here is that if you opportunistically show up with a suitcase of yankee dollars after their economy crashes like a second-grader after his Adderall wears off, the locals might not be very happy to see you. In the sense of, they might pelt your car with rocks and send you fleeing into the night. Still, what goes down must come back up eventually.
Yeah, it’s not exactly Detroit or Greece, but with their population dwindling and aging, Italy is basically giving castles away to anyone who can afford their upkeep, and selling off idyllic Sicilian villas for one measly euro. I mean, you could’ve gotten an entire Italian village on Ebay for less than the price of a studio in Northeast! It seems like Italy might be on a one-way slide into contraction, but that’s not necessarily so. A lot of their economic problems stem from their government’s comical incompetence and corruption – graft is as fundamentally Italian as marinara – but with a new regime in office that’s sworn to reverse those questionable traditions, Italy’s economy could rebound quickly. Also a factor in the country’s sluggish economy is the Italian resistance to immigration, but much like China and its “one child” policy, the people in charge are starting to recognize their cultural xenophobia as a major drag on growth. A big influx of immigrants could kickstart the economy, and enable you to flip your one-euro villa for six figures. I mean, even if that doesn’t happen, your worst-case scenario is that you’ll own an Italian villa, which as downsides go, is pretty nice.