Without renting out these properties, I don't see the that many advantages.

In the case of the Chinese, it is better than holding cash in the long term. I can think of a whole host of reasons why buying real estate, even without rents would be a safe avenue for cash. Not necessarily the best, like rentable property, but that isn't the point. Nor have I found that the Chinese are really good at investing anything.

Think of them like trailer trash that won the lottery. You can take the person from the trailer, but never take the trailer out of the person. Many Chinese didn't grow up with business savy parent, or peers. Many of them are millionaires or billionaires through cronyism and not so much because they produced something of value. So they are still learning, or relying on what others told them to do. Real estate in the form of just buying property is a semi-liquid asset with gains and losses easy to understand.

My wife's cousin had a business a few years back where they would help Russian billionaires spend their money in the US. I mean, how many leather Prado sport coats and Rolexes can you own right? I thought the whole idea was absurd. Here you had a guy who made his own millions through hard work, business savy and investments teaching new Russian millionaires and billionaires how to spend their money. And most of it was spent on garbage. YOU EVER SEE THOSE WEIRD DIRECT TV COMMERICALS.



There you go. True to form.

Because they didn't earn that money, they were often bureaucrats or children of bureaucrats who were at the right level when communism fell and were able to sell state assets or control state assets for their own benefit. This is how many of the oligarchs came to be. So many of them are still no smarter than mid level bureaucrats at places like your local utility, DMV, or even Federal Gov't agriculture co-op. Yet now have millions or billions to play with and no sense of real value.

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"In the world I see you are stalking elk through the damp canyon forests around the ruins of Rockefeller Center. You'll wear leather clothes that will last you the rest of your life. You'll climb the wrist-thick kudzu vines that wrap the Sears Towers. And when you look down, you'll see tiny figures pounding corn, laying stripes of venison on the empty car pool lane of some abandoned superhighway." T Durden

Its viewed like gold

Qatari's are the single biggest landowner in london now at something like 22m sq ft

They intend to invest another 5bn sterling in next 5 years

If your country or currencies future is questionable, real estate is a safe place to park equity in their view and historically they would have been correct

As a total aside. I am in the process of refi and last thursday i was notified that the mortgage funds had left my bank in jersey and i'd complete fri or monday.

Anyway, funds don't arrive fri, or mon or tues or today.

It turns out that because the area i live in is called "north soudan" having spent three weeks convincing them its not north sudan, they released cash to london who then stopped the payment because they thought it was north sudan.

It is a) not quite as easy as one would think to launder large sums in most places and b) now much more expensive to purchase via a llc in london as you pay an additional 3% sdlt on purchase then an annual tax on enveloped dwellings starting at about 15k on 2m per year.

That said if hiding cash is the point then those taxes are peanuts when the service charges on some of these flats run to 15k sterling a month

Yeah, I get that it still has some value, but I don't think this commodity is nearly as safe, if actual vacancy rates are rising. That screams "bubble".

As another aside, I just sold my mom's house in Seattle to a nice Asian couple. Never met them. Just wondering....

https://www.google.com/...-sold-but-unoccupied

I suspect some of this commodity is safer than others

And even if its not, and is a bubble, its still probably a better investment than downtown athens or riyad

Though possibly not in this case:

http://www.telegraph.co.uk/...sement-rennovations/

Still more stable than the Yuan, Rubble or other 2nd or 3rd world currencies. Let's also not forget, a lot of citizens from these countries want to move their currency out of their countries and hide it from their Socialist gov't that can and do seize assets on a whim, for any reason. By investing in an LLC with assets, whose ownership is only known by the incorporating entity, your gov't can't come to your house and take your ownership stake without knowing you own it, and forcing you to sign it over under penalty of arrest.

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"In the world I see you are stalking elk through the damp canyon forests around the ruins of Rockefeller Center. You'll wear leather clothes that will last you the rest of your life. You'll climb the wrist-thick kudzu vines that wrap the Sears Towers. And when you look down, you'll see tiny figures pounding corn, laying stripes of venison on the empty car pool lane of some abandoned superhighway." T Durden

That's a very Chinese thing though. Their newly capitalist government is pushing the people to invest in real estate, and actively propping up their bubble after creating it. So people gobble up real estate very fast with little means. But the more Chinese thing is to leave them vacant. There's a couple reasons why:

• Construction in China is shit. It makes 70s Harleys look like fine machinery.
• Doing a tenant fitout / remodeling / etc. would actually lower the value of the property. As stupid as it seems in the west, an empty concrete box is worth more than a livable space

Also, most retail developments are funded by one-off shell companies. It's done, usually, to protect the assets of the developer.

And one final thought, related: https://www.bostonglobe.com/...eKo48ZPYN/story.html

Old dude donates a lot of money to Worcester Poly (WPI). His ex-wife sues him because he was hiding the money($40M+) in a Swiss bank account and didn't disclose it during the divorce. Then the court found out that the old dude paid someone from the ghetto to kill or find someone to kill his son after his kids tried to force him out of the family business. He's also being investigated for wire fraud and tax evasion. And he might have skipped the country to Aruba. Apropos to the thread ;)