The richer you are, the more affordable travel is, and when one sees various options available at relatively affordable price points in Costa Rica, southern Spain, Caribbean or New Zealand, the urge to empty one's brokerage account in order to buy a one bedroom condo in a crowded area plagued by homelessness, inadequate schools, laughable public transportation and overpriced food is not that strong anymore.

realy so why are non residents buying housing as an investment in London Sf NY and Vancouver?

And if your rich diversifying from just a me to index fund makes a lot of sense hint if the Rothschild's and other mega rich families run actively managed funds its probably a good idea for you to - I have done very nicely out of RCP on the LSE

It's very difficult for the Chinese government to discover or seize foreign property. If you illegally exported money from China, you couldn't exactly keep it in a bank where the Chinese government could claw it back. So you buy property in safe markets; housing doesn't drastically change in value (and often appreciates), the money gets "washed" in escrow by random citizens, it's very hard for housing to get stolen or lost (unlike other high value items, like precious metals, diamonds, cars), there's enough supply where the government couldn't possibly monitor all the markets, and it's high enough value where so you only need to succeed a handful of times.

Rich people invest in property because they have enough money to view a million dollar condo as a diversification strategy. Property can be a good investment, but shouldn't be your only investment.

I'd take 10 houses for $200k in the Midwest over one $2m house in the Bay Area. Appreciation is lower, but rents (as a percentage of cost) are much, much better. The shortfall in appreciation can easily be made up for in better rent yield.

Less desirable areas always have higher cap rates. Most investors are NOT looking to make money on the cap rate though. If you're seriously investing in real estate you're looking into development projects, re-zoning, etc. You're buying because you know the local government has a 10 year plan to revitalize that part of the city or some other strategic bet.

True, but I think the context here is people buying one (or a very small number) of single family homes as an "investment."

My point is that to "invest" that way in a high cost area is not the smartest move. It's better to buy conservative dividend paying stocks. But if one must "invest" in property it's better to buy 10 for $200k than 1 for $1M. I also didn't mention risk mitigation: the risk of loss on the former is lower.

> If you're seriously investing in real estate you're looking into development projects, re-zoning, etc.

I don't think that's strictly accurate, there's something for every budget in real estate investment world, from buying a small condo to rent out to sovereign-fund-level buildouts like Las Vegas CityCenter or LA Metropolis.

It's like saying that someone interested in stock investing would not be buying a few shares here and there, but instead go the Warren Buffett way and acquire entire companies to get synergies across industries.

There are income-oriented investors and multifamily income funds who buy primarily for cap rates.

Consider maintenance costs, vacancies, and management fees. Those can take a huge bite out of your rental income and easily drive you into the red.

not if you run it as a property company and not directly own them

Can you please explain?

You set up a company who owns the property's you can then claim expenses back against tax - you then pay your self a dividend.

As opposed to you owning the houses directly

How does it look once you account for closing costs on 10 houses, maintenance and management of 10 rental properties, etc?

I mean, what you're raising is a valid question and one that has been alluded to here before. However, it is pretty politically charged and it's only tangentially related to this article, hence it seems in poor taste to bring it up here.

Money laundering, safe durable stores of value protected from their governments' confiscation efforts, pure speculation, and being on the wrong end holding the bag all spring to mind.

Cause they can't find other save investments and have cash burning in their pocket.

Why are not stocks /funds on the LSE NYSE the same unless the cash is from the black market and they cant pass money laundering regs?

Some countries have limits on how much money you can expatriate each year. Some of these also have rules that allow you to move more money as long as it is going to certain things(building industry, land/home purchases, etc).

I think upcoming CRS (the global version of FATCA) is one of the reasons. Investment accounts will be reported to homeland automatically.