I’m going to drag out an old linguistic trope. The Chinese word for “crisis” is composed of two characters meaning “danger” and “opportunity.” In reality it’s a false translation by westerners, but the larger point being made is still valid. New opportunities do, in fact, arise during periods of chaos. The trick is to be prepared ahead of time. You want to be the one with cash on hand and no debt when everyone else is struggling to maintain an illiquid set of leveraged obligations.
I’m currently looking to the next opportunity to buy property when the real estate market unwinds. There are too many convoluted variables to know when exactly the right time will be, but I’m doing lots of research ahead of the curve. Here’s the kind of property I’m interested in. Architecturally it’s dead boring – a plain vanilla 1980s plywood and beige vinyl box on a cul-de-sac. Emotionally it leaves me cold. I’m a historic Main Street town kinda guy and this patch of suburbia ain’t it. But it has some really good qualities and characteristics I could work with. It’s all about compromise.
First, this property is in a town that has remained stable and viable when others have withered and failed. The local economy is diversified and not particularly dependent on any one industry. It’s remarkably safe and crime free with great public schools. Taxes are reasonable relative to municipal services. Water, good agricultural soil, and natural resources are abundant. And I also like the culture in this part of the country. It’s a small town near enough larger cities to be well positioned for the future.
Trulia / Google
The immediate neighborhood isn’t super exciting, but it scores very high in pragmatic terms. The high school is one block away. The elementary school is two blocks away. There’s a supermarket and a few shops one block in the opposite direction and a pharmacy just beyond that. Right next door is a public recreation center and park. The local hospital is a five minute bicycle ride along quiet side streets. It’s possible for a family to conduct many of life’s basic tasks without a car in this spot. That might make the difference between needing two or three vehicles vs. just one – a tremendous savings at a time of economic contraction.
This location lends itself to renting to school teachers or nurses with stable employment. Young families still saving for a home of their own and reliable tradespeople are the preferred occupants for a good landlord who carefully vets potential tenants.
This is a dull, but impeccably well maintained property. I’m confident that as the economy continues to decline functionality will be valued more than a lot of fashionable bells and whistles. At the moment this house is on offer for $198,000. With a standard thirty year fixed rate loan and a 20% down payment of $40,000 the mortgage, taxes, and insurance would be $1,117. Comparable two bedroom rentals in the area let for $800 – $1,000 per month. And this is a duplex.
I expect the price of property to drop in the next couple of years. The virtual market of globalized financialized abstractions has taken a hard hit. The real estate market tends to follow some time afterward as unemployment spikes and sellers gradually realize there are no buyers at the old prices. Beyond a certain point people have no choice and sell at the new lower price under duress. That’s when a prudent buyer with cash on hand can negotiate a good deal.
Each unit has a basement and a garage. This is useful space that could be insulated and pressed in to service in all sorts of productive ways. I see workshops, deep pantry storage, home offices, guest accommodations, and rumpus rooms here without altering the building envelope. The fewer interactions with the authorities the better – without breaking any rules.
I’m a big believer in household resilience. This duplex sits on a third of an acre of flat land with a south-eastern exposure. It’s just begging to be turned into a productive veggie garden enclosed by fruit trees. Saplings are cheap. For some people (the kinds of people I’d like to attract) a garden of this sort is highly desirable compared to the parking lots and off-limit lawns and shrubbery of typical apartment complexes. It’s all about cultivating a feeling of domesticity rather than temporary accommodation. In my experience serious gardeners make great tenants. And this particular property has no home owners association to get in the way of such activity.
This home has a roof that slopes due south and is perfect for solar panels. I always check Project Sunroof as part of any property search. I’m not interested in “saving the planet.” That’s above my pay grade. Nor am I interested in a lot of gooey tech toys. I don’t need my toaster to talk to my refrigerator over an app. What I really would love is having an air conditioner run all summer without getting a massive electric bill. This is the kind of thing that can be phased in over time if/when it’s truly cost effective. I’m just as likely to install a wood stove or pellet stove to keep the place warm in winter.
What’s this all about? I see a world struggling to hold on to failing institutions that may just fail anyway. Things are getting weird and they’re likely to get even freakier moving forward. I’m looking for a Plan B. A lifeboat. A fallback position. I might find myself living in this kind of place myself someday. I’m not going to buy this particular property. I’m not going to buy in this specific town. And I’m not going to buy anything at this moment. It’s too early. This is just a drill. A hypothetical test run. A thought experiment. But when the time is right I’ll be ready. And this embodies the broad outlines of what I want. 灾害.