Foreign Investors Can Teach Americans About Investing in the U.S.
Working with investors from all over the world there is one common question that comes out and absolutely astounds our foreign investor friends. The question is, Why aren't more Americans doing real estate investing in the U.S? Indeed this is a great question. From their perspective we have virtually all the great attributes of a perfect storm for investing. Foreign investors would love to have such great real estate investing opportunities as we do.
There are many reasons the U.S. has great real estate investing opportunities at our fingertips:
Low price: 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.
A safe haven for your investing dollar: Real estate investing in the U.S. is considered a safe haven for your money. 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 strong and when buying in the correct emerging markets, security of the investment is as strong as anywhere else in the world.
Easy to purchase: Anyone who has money or access to credit can buy a property in the United States. Many countries have rules governing who can buy and what they can buy. Often they must have a certain net worth and even prove to be a producer of income in their countries.
Top country for equity growth: Appreciation in the U.S. surpasses almost every country! Low finance rates are a benefit Americans have that foreign investors do not. We as U.S. citizens have the ability to get very low cost financing. Prices and rates are at 40 year lows. Foreign investors pay about 2 to 3 percent higher rates than we do. However many foreign investors have the ability to offset the higher interest rates with the favorable currency conversion rates.
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 to. 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 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. Places like Atlanta Georgia, Dallas and Houston Texas, Oklahoma City, Oklahoma all top the list for equity growth. Property can be bought for less than 3 years income.
3. Cash Flow Investors: Investors looking primarily for cashflow 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 like, Indianapolis, Indiana and St Louis, Missouri. Also markets like Philadelphia, Pennsylvania and Trenton, New Jersey.