Currency Fluctuations and Market Drivers Attracting Foreign Real Estate Investors
Real Estate has long been considered to be local in nature, as great investors understand knowing local market dynamics is paramount to making sound investing decisions. In our global economy however buyers are often not local. We now live in a time where we have a higher percentage of renters than ever before. The people who own these properties are investors and the lion’s share of those investors are individual mom and pop investors.
These individual mom and pop investors understand that fulfilling the rapid desire for rentals (primarily the most sought after rental, the single family home- single family house) is paramount to their success in great Cash Flow and Equity Growth.
Currency fluctuations attracting foreign real estate investors
Understanding currency exchange rates:
The benefits of buying power can be huge when positively leveraging the exchange rates.. Imagine you are from the U.K. and The Euro is $1.48 to The U.S. dollar. A $250,000 house would only cost the U.K. Buyer a $169,918. That is huge leverage.
These exchange rates change frequently and can benefit investors in a big way so many savvy investors watch these exchange rates all the time. Imagine investing in the U.S. when the exchange rates are in your favor and then doubling down when the market swings and you sell and exchange back to your country when the exchange rates reverse order.
Over and above a great investment in the U.S. is the benefits of massive leverage in the exchange.
Market drivers attracting foreign real estate investors
From Australia to Brazil, China to France, Malaysia to the U.K. and many places in between, foreign investors love the benefits of investing in U.S. Property. There are as many reasons our foreign friends love to invest in the U.S. as there are countries participating in investing here.
The U.S. has long been considered one of the best safe havens for their investing dollar. U.S. taxation provides for many tax benefits and shelters from capital gains tax. True investors find this to be a paramount attribute for great real estate investing. Compared to many countries, our economics are as strong as anywhere else in the world.
Strong passive Cash Flow
Many investors around the globe struggle to find positive cash flow. With the U.S having some of the best positive cash flow available these investments aid in balancing out their current investment portfolio.
Second home buyers
Second home buyers are able to combine a leisurely lifestyle with the benefits of a U.S. investment.
Top country for Equity Growth
When investing within the U.S. emerging markets and riding the wave of each area's specific market performance, there is great equity growth. Appreciation in the U.S. surpasses almost every country!
30 year low finance mortgages
Our foreign friends are amazed that you buy can property and spread it out for 30 years at one fixed rate of interest. This is something Americans take for granted every day. Lower finance rates are a benefit Americans have. Prices and rates are at 40 year lows. Foreign investors pay about 2 to 3 percent higher rates. However, many foreign investors have the ability to offset the higher interest rates with the favorable currency conversion rates making it perhaps more favorable for the foreign investor.
The U.S. is the most affordable country for investing. Generally speaking, in the U.S. you can purchase a home for the equivalent of 3 years income, which is cheap in comparison to elsewhere around the globe. For example, you would have to spend 10 years of income to purchase a comparable home in Canada. In Brazil you would be looking at 20 years of income to buy a home and a jaw dropping 35 years income in China.
Ease of doing business in the U.S. Many of our foreign friends are amazed at the ease of doing business in the U.S. In many countries they have a lot of rules to buy property in their countries. Often they must show a certain net worth. In America if you have money or access to credit you can invest here.
Visa interests: EB-5 visas have gained great popularity
Buying investment property in the U.S is like investing in any property. Personal diligence on the property to insure you are investing in the best location within our country and evaluating the property itself for optimum performance but the entire process is summed up in this eBook:
The number one question I get
“What type of property should I invest in?” is the question I hear every day. Of course the common response is it depends on your personal investment interests and goals. The number one most highly sought after property in the country is the single family 3 bedroom 2 bath home with a garage. As this is the most highly sought after property, it goes without saying that this is also the most liquid of the investment class within real estate investments.
How to maximize your investment
Anyone who invests in property will tell you that you make your money going in. Having an exit strategy in place the day you buy the property allows you to forecast the long term return on investment. To this note, the most common exit strategy that I have witnessed is buying a 3/2/2 single family home in the sweet spot of the market.
Of course, as I say, there are numerous reasons people invest and not everyone fits into the categories mentioned here. The U.S. however has an investment for any investment style.
If you would like to learn what may be available for your investment style, we would be happy to strategize with you on what may appeal to you the most. Give us a call today! 941-718-7761
Investors, both foreign and domestic can indeed find incredible investments in the U.S. With much pending inflation, U.S. investments are poised to provide a great hedge against that inflation.
There are 3 primary investment styles for any real estate investor and the U.S. provides great investments for all 3 styles.
3 Investment styles and where to find them
1. Lifestyle Investor: The investor looking for second homes and a place to escape. Florida definitely holds the top spot for the lifestyle investor and for good reason. Florida is the Sunshine State. Warm climate, hundreds of miles of beaches. More golfing areas than you can count and cost of property is about 3 years income.
2. Equity Growth Investments: Investors looking for long term buy and hold properties with anticipation of building solid equity growth can find them in places like these equity growth locations. These properties can be bought for less than 3 years income based on American median income making them affordable markets.
3. Cash Flow Investors: Investors looking primarily for cash flow want lower priced property and are willing to trade off stronger equity growth for strongest possible cash flow. They can do so in Midwestern markets such as these cash flow markets.