Real Estate Is On Sale, But Where Should You Be Buying?

After nine weeks under COVID-19 lockdown, people here in France are out on the streets again. Kids are back in schools (the school year in France runs through June, so they have a few weeks to go). Shops are open with capacity restrictions.

Restaurants and bars are still closed for in-room dining. Many restaurants have been offering home delivery for weeks, and now some have set themselves up for street-side takeaway, as well.

I’m working from our Paris office for the first time in nearly three months. Venturing across town this morning, it seemed to me that the city is largely back to its old self with one big difference from the usual scene this time of year:

No tourists.

May is prime season. Normally the streets, squares, parks, and gardens both around my apartment in the 7th arrondissement and in the neighborhood of our office in Montmartre would be packed with camera-toting, flip-flop-wearing throngs. Not a tourist in sight right now.

The situation is the same across Europe. Colleagues in Portugal, Spain, Croatia, and Italy all report blissfully empty streets. Residents of Paris, Lisbon, Barcelona, Dubrovnik, and Florence are delighted for this chance to have their brand-name cities to themselves.

Of course, if you’re in the tourism industry, you have a different view.

If you’re a real estate investor invested in a short-term rental in Europe… or, indeed, anywhere… the absence of tourists isn’t a plus but a concern.

A friend in Portugal called yesterday to try to persuade Kathleen and me to come visit.

“You could rent a two-bedroom apartment in the heart of Lisbon with a river view for 30 euros a night,” he told us.

“Normally,” he said, “this time of year a rental in the best neighborhoods would rent for five times that much or more. Owners just want someone… anyone… paying anything.”

While that’s not good news for current tourist rental owners—especially in markets like Portugal, where May to September is the annual high season—it is a big opportunity for those of us looking to buy in these markets.

The problem I’m finding is that it’s not easy to source the deals remotely. Normally, I’d get on a plane and meet with real estate agents. And, indeed, after speaking with my friend in Lisbon, I was ready to make the trip down from Paris.

The trouble is that, while Portugal has largely reopened and is imposing few restrictions, France is still limiting travel. Maybe with some real effort (a letter suggesting an urgent reason for me to be in Lisbon from my attorney in that city, say), I could get to Portugal right now. But then I’d risk getting stuck in Portugal should Portugal or France tighten restrictions again quickly.

So, as much as I’d like to be out scouting, I’m staying put for now.

And I’m shopping virtually. More than ever in my investing career, I’m counting on my network of contacts on the ground in the markets on my radar.

Where am I shopping?

I’m looking closely at a land deal in Portugal. I know the country well enough and have resources there I trust, so I feel comfortable vetting this deal long distance.

I’m also focused on crisis-level opportunities in Colombia and Brazil, where, again, I have enough previous experience and current contacts to be OK investing without getting on a plane.

I’ll be sharing my specific recommendations, based on my ongoing reconnaissance, with subscribers of my Global Property Advisor service.

Lief Simon