We live in changing times. Bob Dylan wrote The Times They are a-Changin in the 1960s, and ever since then, the rate of change has only accelerated. Countless clichés point to the same conclusion.
Teenagers today don’t know a world without smartphones, but those in their 20s remember feature phones, and those in their 30s remember flip phones, while those in their 40s remember some of the original analog mobile cellphones such as the large Motorola ‘brick’. Of course, those even older remember a time before we had mobile phones – a world of airplane passengers disembarking and running to the ubiquitous pay phones to call (in exchange for some coins, of course) head office and get updates on any appointments for the day.
Those who have been around for a while will remember a slew of investment phases and crazes that people have gone through. From ostrich farming (a sure winner!) to fax machines (one day, everyone will have one!) and from Personal Digital Assistants (such as the coveted Palm Pilot) to Beanie Babies.
While crazes such as Beanie Babies, Hula Hoops and collecting oddly shaped paper clips can be reasonably predicted to die a natural death, who would have thought that a company such as Kodak, totally dominant in its field of photography for over a century, to the extent that “a Kodak moment” entered into common lexicon, would suddenly find itself the dominant player in an industry (film) that would collapse around it, resulting in the company’s bankruptcy?
While many young people will, with the benefit of hindsight, claim that Kodak’s demise was inevitable, few young, technologically savvy investors predicted that Nokia, until recently the largest manufacturer of cell phones, would disappear off the face of the earth within a few years. Nor did they predict the demise of the Blackberry, or maps, or landlines, or phone books, or CDs, or movie rental stores.
Indeed, there are many more people who can eloquently and accurately explain to me why a company or industry died, than there are people who can accurately predict which companies will die in the near future.
Which brings me to my point: whether it was by tremendous brilliance and foresight or merely luck that I latched onto an industry at the age of 17 that has stood the test of time. I am ever grateful that my energy – and capital – was diverted into property which is still chugging along very nicely.
The property question
To be sure, the industry has changed a lot. The way we buy and sell properties (online through extremely creative and interactive websites), execute contracts (often using electronic signing systems such as DocuSign) and pay our property taxes, insurance premiums and maintenance bills has kept up with the changing times.
And even homes themselves have evolved, and now incorporate LED lighting, internet-connected thermostats and new building materials to name just a few, be it with new construction or retrofits. But what I am referring to, is that the fundamental need for a home to live in has not changed.
Most people still watch a screen in their living room (admittedly more likely a streaming service than a cable channel), sleep in a bedroom, and cook (when they don’t eat out) in a kitchen. Even Millennials, who are more likely to opt out of buying a home to live in (in favor of renting), still choose to rent a home, rather than living, en masse, in campervans or communal lodgings.
With populations in many parts of the world increasing, through the natural forces of supply and demand, capital values of real estate have continued to rise steadily. These rises have not necessarily always been in a straight line (linear and monotonic, as the mathematicians would say) but over time, they have resulted in a very stable, steady rise.
Which brings me to two points…
Firstly, I said that populations in many parts of the world are increasing. There are some exceptions, such as Japan. I am very fond of Japan. I was lucky enough as a kid to learn the language. I have immersed myself in its culture. I love going there and thoroughly enjoy the food, the customs and the technology. However, the population is in decline, and in general that is not good for capital values of real estate. Much as I would like to have an extra excuse to travel there, I have not invested there.
Secondly, an increasing population is, of itself, not a sufficiently good reason to invest somewhere. You have to take into account the rules and regulations regarding property ownership, the political climate in general, the strength of the economy, and the trend in the value of the local currency.
Taking all these factors (and many more) into consideration, much of my investing in property in the last two decades has taken place in the United States. A cynic may say, “Well, no wonder you invest in the US, that is where you live!” They completely miss the point. I live in the United States so that I can invest there more readily.
Furthermore, I have always shown others what I do, and encouraged them to do the same, if they so choose. To this end, I have written 15 books on real estate. Some, such as my New York Times bestseller Real Estate Riches, are truly international, with principals on property investing that can be applied anywhere in the world. But others are specific to the United States market. Indeed I have often run events in countries including Australia, New Zealand, Indonesia, Vietnam and South Africa, and then taken attendees on buying tours in the United States.
Should you wish to receive more information on how you can invest in real estate in the United States with Dolf’s guidance, or even how you can use investing in real estate to obtain permanent residence (a Green Card), please send an email to firstname.lastname@example.org.