Where the Living Is Easy?

May 13, 2008

Waterford, Ireland

PLUS:

n  Why You Need a Compass in Costa Rica...

n  Bare-knife Fighting in the Marais...

n  Best Beachfront Buy in Central Europe--You Read It Here First...

n  Tantric Mantras and Chaotic Street Life--Discovering Dharamsala...

n  So Long All-Biz-Class Trans-Atlantic Travel?...

AND:

n  How to Play Shanghai's Booming Commuter City Property Markets

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Dear Overseas Opportunity Letter Reader,

When we moved from the U.S. to Ireland 10 years ago, we shipped an entire household full of stuff. Into a container went sofas and chairs, china and crystal, heirlooms and photographs.

Because we decided to rent for some time, while we looked for a house to buy, that container, upon arrival six weeks later on the shores of the Emerald Isle, was taken to a storage site in Dublin for safe-keeping. We'd arranged to take delivery at some time in the future, as yet undetermined.

Also not pinned down was the cost of this long-term storage. After several phone calls, to the shipping company and the dock master, finally, I got the number direct to the guy who owned the storage area where our goods had taken up residence.

I called him, explained who I was, and asked if he could detail his fees for me.

"Aye, you're from America, Love?"

"Yes, sir, we've moved here from Baltimore. But we haven't found a house yet, so I'm not sure how long we'll need you to keep our container for us. I'm wondering about your fees. Could you please give me an idea of the cost of monthly storage with you?"

"My cousin lives in America. In New York. I've never been, but my wife was in Florida years ago. Do you know Florida?"

"Yes, sir, I do. Sunny. Hot."

"Yes, my wife enjoyed it. She's not well right now, my wife. She's been to the doctor three times."

"Oh, well, I'm sorry to hear that. I hope she's better soon. I'm wondering, though, about my container of household goods. As it may be with you for some months, I'm a little concerned about the cost. Could you give me an idea of the monthly storage fees?"

"I've got to run now to take my wife to the doctor again. But don't you worry, Love, we'll sort this out. I'll be back in touch soon as I can."

Three days later, I hadn't heard from my friend in Dublin, so I called him again.

"Hello, it's me again, calling to ask about the cost of storage for my container."

"Ah, Love, nice to hear from you. My wife is no better. She's got this cold in her chest, and the doctors can't cure it."

"I really am sorry to hear that. I hope she'll be feeling better soon. I'm a little concerned, though, about my container. You do have it there, don't you?"

"Yes, yes, Love, don't worry. We've got it. Safe and sound. I've got to run now, though, my wife is calling."

"Yes, of course, but I'd really like to have some idea of the cost of storing my container with you. I'm worried it may be more than we've anticipated."

"Not to worry, Love, not to worry. We'll sort this out."

These conversations continued for three weeks. Finally, I had to admit to Lief that, though I was fairly certain our container had arrived at the docks in Dublin and was in storage, I had no idea of the cost of keeping it there.

For me, this situation was mildly disconcerting but also charming. Clearly, my new friend with the ailing wife in Dublin was in the driver's seat. When we were ready, finally, to take delivery of our stuff, he could present us with a bill for any amount. Thousands of pounds. We'd have no choice, really, but to pay.

Still, he was such a sweet, friendly fellow. Surely, it would all work out in the end.

For Lief, on the other hand, the situation was maddening...intolerable. You don't engage a service without knowing the cost up front. People don't do business like this.

I had to agree with him that, right, people we knew, back home, in Baltimore...they didn't do business like this.

But the longer my association with the gentleman in Dublin continued, the more I came to suspect that, beyond Baltimore, well, maybe business was done a bit differently.

It was nearly a year until we were ready for our goods to be delivered to our new home in Waterford. In all that time, I never did succeed in getting the kindly Dubliner to quote the cost of storage. Finally, I took a leap of faith and told him when and where to deliver our things. Lief had washed his hands of the situation long ago, and, even I, after 12 months, was nervous to see the bill.

Everything was sorted in the end, though, just as I'd been assured all along that it would be. The invoice, when it eventually arrived, weeks after our belongings were unpacked in our new home, was modest. Less than either Lief or I ever would have guessed.

I'm telling you this story for two reasons. First, we're in Ireland this week, tying up administrative loose ends and seeing friends one more time before our move in six weeks to Panama. As we prepare to say good-bye, I can't help but think about our first weeks and months as new residents in this country a decade ago.

I was reminded of this story in particular, though, the other day when a friend in Paris remarked how much easier it is to live in the States than it is to live most anywhere else in the world. Easier, simpler, more convenient, more figured out. In business dealings, you know what to expect. You ask a question, you get a straightforward answer.

You make an appointment, you expect the other parties to show up...on time.

You need a plumber, you pull out the Yellow Pages. You want to open a bank account, you walk into a bank, no appointment required.

In France, you need an introduction to open a bank account. And, even with a letter of reference, you'll still be required to produce a dossier of paperwork. To rent an apartment in this country (legally), you'll likewise have to prepare a thick dossier documenting your financial situation and history, all notarized, sealed, stamped, witnessed...

Outside the city centers in Ireland, the roads aren't marked or even known by name. An Irishman I once asked about this told me the road signs were taken down during British rule--"to keep the British guessing," he explained with a twinkle.

The strategy may or may not have confused the British, but it sure did have me traveling in circles some days.

Friend David Stubbs, living in San Jose, Costa Rica, for three years, reports that the Ticos, like the Irish, are unconcerned with things like street signs.

"In Costa Rica," David writes, "all directions start with a well-known landmark and proceed so many blocks in one direction and so many in another. Start at the cemetery and go three blocks north and one block east...

"This is even more fun when the landmark no longer exists--for example, the large tree in the center of town that fell down 50 years ago or the house where President Arias used to live the last time he was president (20 years ago)...

"This is true even in the capital. San Jose is laid out on a grid system of calles and avenidas, such that any intersection could be defined precisely--the corner of Avenida 2 and Calle 4. If not for the one-way streets, pedestrian-only streets (none of which are marked on any map I've ever seen), and the fact that most intersections are devoid of any legible signs, it could be easy, therefore, to get around in this city.

"But no one pays attention to the grid. So whenever I'm going someplace for the first time, I work out roughly where I want to go and follow the compass in my car until I get close. Then I stop and ask for directions."

Kathleen Peddicord

P.S. On the other hand, as British expat David also points out, "the U.S. isn't simplicity itself for a newcomer.

"Have I ever told you about my first visit, as a foreigner just arrived in the country, to your DMV?"

FROM THE MAILBAG:

In response to my remarks last week about the pros and cons of investing in an apartment in Paris' Marais district right now, a reader writes:

"I bought a three-bedroom, two-bath apartment in the Marais for the equivalent of $100,000, less than $1,000 per square foot (including the costs of the modest renovation we carried out). This was in 1983 in the wake of Mitterand's election, when the franc and the property market both collapsed. I was fed up paying rent in Paris, and we never could afford a place big enough for our family before.

"A couple of days after settlement, we invited some friends and colleagues over. We sat on the floor and drank a bottle of champagne.

"Suddenly, there was a noise of screaming from the street. We rushed to the living room window and saw two men emerging from the Algerian-owned café opposite. They proceeded to battle with bare knives, yelling at each other in Arabic. We learned later that the row was because the owner of the café had tipped off the cops about drug deals.

"The police came after a bit, and my husband and his friend stood shaking their heads.

"'What have you gotten us into now?' my husband asked me.

"He was worried that the Marais wasn't anyplace we should have invested. There was drug dealing; there were women working as streetwalkers; there were North Africans; there was a noisy carton-recycling business that attracted tramps bringing in cardboard to earn drinking money.

"Soon after, though, the Algerian owners modernized their place and then sold the shop-cum-apartment to a jeweler, who later sold it on to a Korean lady art gallery owner.

"The cops, no longer based on the street, eventually took over a ground-floor shop a half-block away. We've since enjoyed the best security in Paris.

"The street, which (I have to admit now, even to my husband) had a louche (that is, shady) air when we arrived, is today full of art galleries, bookstores, and fashion boutiques. The carton business turned into a series of art galleries after the local all-night supermarket (source of the cartons) went out of business. Plus we have a pair of Moroccan restaurants, a shuttered Algerian bar, a spa for yuppies..."

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ALSO RIGHT NOW:

Key commuter markets around Shanghai are growing fast, and it is possible for you to benefit without investing directly in Chinese real estate yourself. Global investing correspondent Vivian Lewis, of Global-Investing.com, just returned from three weeks on the ground in China, says take a look at this small, entrepreneurial, offshore Chinese newcomer...

"The group is headed by an architect who is close to the government but who has had the good sense to incorporate Xinyuan Real Estate (NYSE.XIN) in the Cayman Islands.

"The Chinese home-builder puts up apartment buildings in second-tier cities, starting in Zhengzhou in 1997. The company is now branching out into more cities where people want to live, including Suzhou, which I visited. It's a pretty place with charming (partly reconstructed) canal-side commerce about a quarter-hour from Shanghai by bullet train. I would live in Suzhou myself. Another target is Jinan, another commuter city for Shanghai.

"Alas, the group is also building in Chengdu, a city I also visited where I would not live. The Yangtse port is seriously hot in the summer, charmless, and polluted. But it is growing fast because of the flooding of riverside villages by the Three Gorges Dam.

"Other cities XIN builds in are Hefei and Kunshan. It has been buying developable land in China to go on building highrise apartments and related commercial sites. It has 2.5 mn mn (that's million million; we're in China) square meters of land, enough to build on for the next 18 to 24 months. Then it will buy more.

"XIN has a recently arranged development loan from China Construction Bank. Whether this will feed through into mortgages for home-buyers is not clear.

"The stock has fallen a ways from its late 2007 IPO, when it came out at $14, underwritten by Merrill and JP Morgan and the great and the good. Its initial prospectus sounded too good to be true; growth in 2007 revenues of 117.6% over 2006, to $309.7 million; net profits up 163% to $42.5 million. A fast-growing company from a respectable base and with a good rep in China.

"XIN does not pay a dividend, one reason it is down. Another is that the chairman warned two weeks ago that austerity and higher interest rates are possible this year, which could nip growth from prior year levels. But, considering prior year growth levels, a bit of nipping could be tolerated.

"Moreover, XIN is liked by analysts, expected by consensus to report profits of $1.20/share this year, versus $5.44/share last year. That means it is trading at eight times forward earnings.

"XIN is headquartered in Beijing. Board Chairman Yong Zhang, his wife, the COO, and his CPA cousin, plus other insiders control 61% of the group's operation."

Developers, investors, and sun-seekers are headed south from Croatia to Montenegro to, now, Albania, the last stretch of undeveloped coast before you get to Greece.

As development and foreign investment pushes south from Croatia through Montenegro, Albania is coming on to the radar screen...with all its undiscovered sandy shores.

As recently as a couple of years ago, the country was an unadulterated basket-case, and investment seemed too risky for everyone but the Russian mafia, which has been buying up bits of Albania's sunny shores with little competition.

Today, though, title for land in much of the country has been regularized, meaning you, as a foreign investor, can buy and own outright (though more than standard due diligence is called for). As Albania moves toward EU membership, projected for 2014, title issues will continue to be cleaned up.

Right now, though, prices are so low in some parts of this country that a bit of risk is acceptable.

In Tirana, the capital, you can buy pre-construction for as little as 550 euro per square meter. While the standard of construction is basic, and you have to throw in another 6,000 euro to complete the kitchen, there are few places remaining in the world where you can buy decent housing in a capital city for this price.

The immediate use for one of these apartments (I'm not suggesting you'd want to live here) is local housing. The city has tripled in size in the last 15 years and is expected to continue to grow rapidly for many years to come, as new business and employment opportunities, centered mostly in and around the capital, continue to emerge in this country.

In addition, there's the University of Tirana nearby, which means there's an ongoing demand for student housing.

New developments on the coast, specifically in and around the town of Saranda, near the Greek border in the south, are selling for as little as 735 euro per square meter. From Saranda, you can see Corfu.

Unlike Croatia and the northern half of Montenegro's coastline, Albania boasts sandy beaches. The sand, the sun, and the seriously low prices will attract West Europeans, I believe soon. Now, though, it's East Europeans and, yes, still, the Russians, who are seizing the opportunity.

Furthermore, non-residents can borrow to buy in Albania, up to 70% of the purchase price.

Do the math. A 50-square-meter (reasonable size for rental) seaside condo can be bought for around 40,000 euro...but, thanks to the local financing, you'd need only 12,000 euro to close (plus closing costs...and don't forget your kitchen, but even the cost of this can be mortgaged along with the rest of the place).

Probably you know little about Albania and what you may know is maybe all bad news. You're not alone in your misperceptions, and that's the point. Things are changing in this country, thanks, for example, to an influx of EU infrastructure money. But neither investors nor holiday-makers have copped on yet.

Right now, the low end for coastal property in Croatia is 2,500 euro per square meter. Prices for waterfront in Montenegro are no longer dramatically lower. In other words, Albania is a steal, relative not only to its neighbors, but also on a world scale.

It won't be long before the Brits and the Irish (perhaps the biggest investors in Croatia and Montenegro to date) figure this out and take their sterling and their euro just a little bit farther south.

You read it here first.

For more:

therightmoveabroad.com

croatianhouse.com

The Good Idea of cheap luxury air travel that so many entrepreneurs had a short time ago has proved a lot more difficult to realize than anyone imagined...

"It seemed a great idea at the time," writes seasoned trans-Atlantic traveler Paul Lewis. "Dedicated all-biz or all-first-class jets carrying you across the Atlantic in comfort for half or less what the big airlines charge. But one by one, these cheap luxury carriers are dropping out of the sky, victims of rising oil prices and a darkening world economy.

"The latest to close its doors (April 27) is Eos, which flew a daily all-first-class service between London's Stansted and New York's JFK for around $3,000 round trip. Last December saw the demise of MaxJet and its all-biz-class service between JFK and Stansted for about $1,500 round trip.

"Three weeks ago, Oasis Hong Kong Airlines, which provided a similar luxury service on the cheap between Hong Kong, London, and Vancouver, went bankrupt.

"Meanwhile, Silverjet, which is still flying a cheap all-biz-class service between Newark, New Jersey, and Luton airport, south of London, says it faces continuing losses and is in negotiations with potential rescuers.

"That leaves L'Avion, a French-owned luxury airline flying between Newark and Paris Orly for about $1,500 round trip, still in the air, along with PrivatAir, a Swiss company flying cheap biz-class flights from Geneva's Cointrin airport to Chicago, Houston, and Newark. But for how much longer?

"PrivatAir, which is in partnership with Germany's Lufthansa, even has plans to expand its service this summer, adding new flights to Dubai and Pune in western India.

"Good luck to it."

The Tibetan Buddhist roots of Dharamsala stretch back to the eighth century. The town fell into obscurity in the early days of Indian independence but regained some social standing in 1959 with the arrival of the Dalai Lama and the Tibetan Government in Exile. Today, it's a popular hang-out for students of Buddhism.

This from a correspondent living in Bangkok but traveling in India:

"We have really taken to this place and will miss it when we leave tomorrow. On the way back from our long hike through the pine forest yesterday, we had a cup of coffee at a small village high up above Dharamsala, and the café proprietor told us that we could rent a house in the village for weeks or months at a time. It was a seriously tempting idea.

"I attended two of the Dalai Lama's teaching sessions this afternoon. Unable to find a space to sit in the temple courtyard, I saw on some stone steps nearby and listened to the English translation on an FM radio for an hour.

"His Holiness the Dalai Lama would talk for a few minutes and then recite a tantric mantra, repeating the same three or four syllables very fast over and over again, rhythmic and rather hypnotic.

"We took a bumpy taxi ride down winding mountain roads to do some sight-seeing. We saw a Tibetan cultural institute with a doll museum exhibiting dioramas and puppets depicting Tibetan life. The grounds were laid-out in the style of a Japanese rock garden descending in tiers.

"The little town where we are staying is about six kilometers above Dharamsala. Its chaotic and vibrant street life is dominated by the Tibetan community. There is a continuous flow down the main street of Tibetan monks hurrying to and fro from the Dalai Lama's temple.

"In Delhi, we visited the Gandhi museum at the building where he lived in two rooms. You can see the spot in the courtyard outside where he was shot and the bed in his prayer room where his body was placed afterward.