MONEY IN REAL ESTATE.
The Costliest Spot on the Western Hemisphere--A Mile and a Half of
Millionaires--The Kings of the Earth--Why Some Rich Men Do Not Live
in New York--The Country Fool and the Knowing Ones--How Coney
Island Was Born--The Story of a Great Land Sale--Rents in Apartment
Houses--The Fifty-story Office Building--The Man Who Gave a _Carte
Blanche_ Decoration Order, But Won’t Do it Again--The Western Land
Bubble--Good Farms Going to Waste--The Jersey Flats.
No class of men have made greater or securer fortunes than dealers in
real estate. W. C. Ralston, James Lick, and J. J. Astor, are examples of
persons who have accumulated vast sums through investments in land. The
_points_ of real estate are: First, a sound title; second, a keen
foresight of the wants and the roads of civilization; third, a careful
inspection of the neighborhood where a contemplated purchase is located;
fourth, a thorough knowledge of market values of this kind of property;
fifth, non-professional advice, in the disinterested judgment of men
thoroughly familiar with property and prices. Other considerations are
the rate of taxes of various kinds, imposed or likely to be imposed upon
the property. Tax methods in large cities are often ways that are dark.
For this reason, George Gould, the multi-millionaire, and Mr.
Rockefeller, the Standard Oil magnate, have disposed of their urban
properties.
321. CITY PROPERTY.--A mile and a half of millionaires! Midway between
the East River and the Hudson there lay a few years ago a neglected
tract of land which could have been bought for a few hundred thousand
dollars. To-day it is the wealthiest mile and a half on the Western
continent. One hundred million dollars would not purchase the ground
alone. Forty years ago a piece of land which is now almost “down-town”
was called “Eno’s Folly,” because he paid for it what was supposed to be
an extravagant sum. It is now the site of the Fifth Avenue Hotel. The
tide is still running up, but you must now go to the Bronx, or even
further for cheap city property. It is, however, the most secure of all
investments. Nothing is more certain than that the property in the
annexed district of New York is bound to advance. So also with real
estate in all city suburbs.
322. PLEASURE RESORTS.--Less than forty years ago a man, simulating
country simplicity, sauntered along Coney Island and astonished the
owners by inquiring the price of what was supposed to be worthless land.
They, thinking him crazy or a fool, named a thousand dollars, or five
times what it was supposed to be worth. He accepted the offer on the
spot. A million dollars would not buy the land to-day. The supposed
countryman’s “folly” has been repeated many times since. The owner of
Bergen Beach has made a fortune in this way during the last two or three
years. As cities grow, pleasure resorts must be found. Buy a bit of
seashore and make it into a Bergen Beach or a Bowery Bay. Or, purchase a
grove within easy distance of the city, and make it into a pleasure
park. In either case, railroads or trolley connection is indispensable,
but with these and plenty of enterprise and money you cannot fail to
reap a large harvest.
323. NEW TOWN SITES.--Large fortunes have been made by men who had the
sagacity to see a potential factor in the meeting of two rivers, or the
projection of a railroad. The question for investors in real estate is,
“Where is the population going?” Keen observers note the drift, get
ahead of the tide, and are ready to sell lots when the people arrive.
Whitestone and Morris Park on Long Island were built in this way. It is
a good investment, not quite so safe as city property, but paying more
handsomely where the projector is fortunate in his location.
324. WESTERN LANDS.--Fortunes have been made and lost in Western lands.
The facts are that some sharpers have been booming lands that are hardly
worth the taxes. Persons who have bought “corner lots” in “promising”
Western towns have been surprised to learn that the towns were not
built, or even surveyed, and that often the site was located in the
midst of an impenetrable swamp where a town was impossible. However,
lands along the line of railroads, or places which have harbor
facilities on the banks of rivers are good investments.
325. THE APARTMENT HOUSE.--The apartment house, which is a kind of
evolution of the flat, is becoming a feature of life in large cities.
The question whether it is a paying property will receive light by the
consideration of the rents received by the owners of a building of this
kind in New York, the Knickerbocker at Fifth Avenue and Twenty-eighth
Street. This is a typical apartment house, and the tenants may almost be
said to buy their rooms, for there are several who give $100,000 for a
ten-years’ lease, and even small bachelor apartments on the tenth floor
command $1,000 a year.
326. THE SKY SCRAPER.--There is no limit to the extent of a building in
height. Some are twenty stories, one is thirty, and it is reported that
a sky-scraper fifty stories in height is projected. Do they pay? Here is
the account of a modest one of only nine stories, the Mills Building on
William Street, New York. The cost, with land, was $2,500,000. It is 175
× 150 feet. It contains 400 offices, has 1,200 tenants, and pays an
annual net rental of $200,000, or eight per cent. It is related of Mr.
D. O. Mills, the owner, that in completing his magnificent residence on
upper Fifth Avenue, he gave a _carte blanche_ order to a decorator, and
departed with his family to California. On returning he was delighted to
find the place transformed into an Aladdin’s Palace, but his joy was
somewhat modified at the presentation of the bill which amounted to
$450,000.
327. THE JERSEY FLATS.--Right over against property whose taxable value
is $3,000,000,000 lies another property worth literally nothing. Step
over from Manhattan Island, where every foot of land needs to be
overlaid with silver round-moons for its purchase, to New Jersey, and
you will find 27,000 acres of marsh lying under the very nose of the
metropolis--land hardly worth a song. Why is this? Simply because
capitalists have not been wise enough to improve this great waste. In
Holland, by a system of diking, land in a similar condition is now
covered by great warehouses and factories, and cannot be bought for
hundreds of millions of dollars. Here is the opportunity for
capitalists. Why invest money in far-off gold fields when you have a
Klondike here at the very threshold of the metropolis? “The first step,”
says the State geologist, “is to build an embankment and a pumping
station. The cost will be about $1,000,000. The main ditches should be
made, and the whole area laid out in twenty-acre farms, and sold on the
express condition that each plot shall be immediately ditched and
brought under cultivation.” If we put the cost of ditching, and of other
incidental expenses at $500,000, we have a total cost of $1,500,000.
Then, if we estimate the worth of the land at only one-fourth the
average price of land on Manhattan Island--which is the average worth of
land in Jersey City--we have a value for the total 27,000 acres of
$50,000,000. Profits, $48,500,000.
328. ABANDONED FARMS.--There are 4,300 abandoned farms in New England
alone. These with a little expense could all be made profitable. Some
are selling, buildings complete, as low as $700, and even $500. Many of
these abandoned farms, costing $1,000, could, at the expense of another
$1,000, be put in a highly thrifty condition and sold for $4,000. An
Abandoned Farm Company will some time be organized with chances of good
profit.