Regardless of whom you read, Brexit is having a negative impact on central London housing. An October 17 European Union summit was presaged by European Council president Donald Tusk saying yesterday there is “no grounds for optimism” given the state of negotiations. Coupled with fresh inflation data, the pound was down again. Since the Brexit vote, the pound has almost exclusively traded +/-$1.30 where as it typically had ranged in the $1.50-$1.60 range previously.
Adding to the stress, in early October, two more large financial institutions announced plans to shift some London operations to Paris with whispers of more to follow. Financial services is one of the largest employers in London as well as one of the highest paid. Removing significant quantities of high earners will cause a glut in some price bands as relocated staff sell up for Gay Purr-ee.
During my London holiday, I was able to meet with a host of HGTV’s House Hunters International, Richard Blanco. A Spanish national growing up in the UK, Blanco was schooled in theater and dance – a story common to many real estate professionals whose early interests gave way to a profession in property. So far Blanco has chalked up over 30 House Hunters International episodes, including being the only presenter to work in multiple countries (eagle eyes have seen him in Spanish episodes). He’s currently a spokesperson for the UK’s National Landlords Association and is a regular commentator on various television shows – in fact, Blanco had popped into the BBC earlier in the day. For those wanting a regular dose of the London property market, Blanco produces a monthly podcast Inside Property. In his spare time, Blanco flips homes he buys at auction.
Who will buy this US$3.8 million New Zealand penthouse?
In the good old days, the wealthy used to scoop up gold and jewels and flee in the dead of night before poor, angry peasants descended upon their estates. Today, the million-dollar jewels are often red carpet loans where today’s décolletage is rented like a yesteryear billboard.
Hiding assets from pillagees, modern-day pillagers have offshore banks, blind trusts, LLCs and cryptocurrencies. Fleeing is now the purview of private jets to far-away lands – but the local residents in those faraway lands are getting ticked-off at being priced out of their own markets and they’re mobilizing.
Last month, New Zealand passed a law banning many foreigners from purchasing existing homes. The legislation was part of a promise during Prime Minister Jacinda Ardern’s campaign in 2017 to reduce the country’s skyrocketing housing prices. Earlier in the year The New Yorkerpublished a story about super wealthy Americans purchasing New Zealand real estate as a hedge against potential political or nuclear Armageddon – nicknamed “apocalypse insurance.”
Manafort’s Long Island Home at 174 Jobs Lane, Water Mill, New York
In the first of two trials, former Trump campaign chairman Paul Manafort was found guilty in August on eight of 18 counts of fraud. All that kept him from being found guilty on all 18 counts was a lone juror.
The “witch hunt” had found another witch. Not eager for a potentially worse repeat at his upcoming second trial, Manafort cut a deal with the feds pleading guilty (admitting his witchcraft) and agreeing to surrender a bunch of assets including some real estate some are valuing at $22 million.
In a “birds of a feather” twist, Manafort’s spec builder son-in-law Jeffrey Yohai filed for bankruptcy in 2016 as four multi-million dollar (unsold) spec homes fell into foreclosure. The whole affair also ignited lawsuits by Dustin Hoffmanand others claiming Yohai was running a Ponzi scheme. No stranger to legal troubles, Yohai and wife Jessica Manafort were sued for running an illegal Airbnb operation from their three New York apartments – in the middle of divorce proceedings. (more…)
From 1969 to 1974, the Brady Bunch was America’s family. The show was originally a reaction to creator Sherwood Schwartz reading that a third of American marriages contained children from previous relationships. But as we learned well after the show ended, the Brady’s were more American than we knew. Patriarch Mike Brady actor Robert Reed was a closeted gay man who’d had his own sham marriage. Alice the maid was played by long-rumored lesbian Ann B. Davis. Meanwhile, the various Brady children over the years have struggled with drugs, alcohol, hair plugs, homophobic tirades, and a lot of reality TV.
The 1959 Brady Bunch house, at 11222 Dilling Street in Studio City, California, ignited a bidding war after being listed for the first time since 1973. The three-bedroom, three-bathroom home has 2,477 square feet on nearly a third of an acre. Priced at $1.885 million, its fame pushed the listing price a third more than neighboring comps. The bidding war included Lance Bass and Miley Cyrus, who’d bid waaaay above the already fame-inflated asking price. Bass tweeted he’d gotten the home over the weekend only to retract that statement in a last-minute twist. As of this writing, the home has reportedly been purchased by an unnamed Hollywood studio willing to pay any price for the home.
UPDATE: It’s been revealed that HGTV is the buyer of the home. Parent company Discovery networks made the announcement on their earning call early this morning (8/7). The most likely scenario will be a show following the renovation and restoration of the home. Will the home then be flipped or wind up as an HGTV Giveaway home?
Being Hollywood, the home, like the show’s actors, offers a different reality to its “America’s family” façade.
Frank Lloyd Wright’s Coonley House: Second Floor Living Room (Main House)
Exploring the history of a 100-year-old house is interesting. Exploring the history of a 105-year-old Frank Lloyd Wright structure leaves “interesting” in the rearview mirror. To begin, Avery Coonley and Queene Ferry-Coonley were both heirs to fortunes, but it was Mrs. Coonley who purchased the 10-acre parcel in Riverside, Illinois, and engaged Wright as architect. Mr. Coonley was said to have been interested in a Georgian-Colonial house. That the estate is called the Avery Coonley House, instead of the Queene Coonley House, reflects the woman’s subordinate role of the era.
The house is actually an estate comprising several buildings totaling over 9,000 square feet. Flashing forward for a second, it’s important to understand that in 1952 the property was in the crosshairs of developer Arnold Skow who wanted to demolish the property and put up 14 ranch homes. A deal was reached to split the main residence in half with a firewall and sell off the gardener’s cottage, stable and playhouse as separate residences. Compared to Wright’s brilliance, the resulting ranch homes have all the majesty of a Taco Bell next to Versailles (one is currently for sale).
Two of Wright’s original compound are currently on the market.
Mauritius 2/2, 1,646-square-foot condo for $593,000.
If you’re just joining us, in part one I explored the thought process second home buyers should go through before making a purchase. Essentially, location matters for multiple reasons, and along with condition of the property, will drive what you can charge for rent. Here in part two, I’ll fill you in on what it takes to be a landlord.
Being a Landlord
I’d never been a landlord before, and back in the pre-internet days, I used a Realtor to rent my property (the same one who sold it to me). What I found was that a Realtor with 30 rental properties can’t really play favorites. After a first year where I was rented for four months, I ditched the Realtor and took over bookings myself.
It’s a whole lot easier today. Back then, I arranged for pictures, placed the classified ads in the local newspaper and waited for the phone to ring. TIP: Having a cell phone number with the same area code as the property made a difference.
One thing many one-home homeowners have in common is a desire to have another one. I think it’s like the “how hard could one more be” ethos of parents. I don’t have kids, but I have owned a second home for nearly 20 years and there are things to consider and stories to tell.
Picking the right property is the first stop. If you think location, location, location matters in a primary home, it goes double for a second home. Why? Because most of us will need to put that home to work generating income when we’re not enjoying its charms. A few bucks profit at sale time wouldn’t go amiss either. Because of this, finding a location that works both for your personal desires but also your financial goals of revenue generation and asset appreciation.
Not the newspaper you want to see on your vacation over coffee and croissants.
Events of the past few weeks in Hawaii should send second home owners looking for their home insurance policies. Regardless of whether your property is located in the mountains, by the sea or anywhere else, insurance is critical. Remember, there’s always some disaster to be protected from. And in the case of second homes, their often far-flung location may catch you off guard in insurance matters.
Think about it. You’re used to the potential disasters where you live, but those risks are often different elsewhere. My Dallas home owner’s policy has little need to discuss avalanches, hurricanes, tsunamis or volcanos. Homes in Hawaii may fall victim to all four, but are unlikely to be concerned with tornados.