U.S. Residential Real Estate Investing Tips Used by Savvy and Foreign Investors
March 6, 2018 By Larry Arth
Why don’t more Americans invest in property?
Is it true that anyone can come to America and buy investment real estate?
Why is there property available, don’t you Americans invest at all?
These are common questions I get all the time from our foreign friends. They are intrigued that the U.S has the best investment opportunities in the entire world and yet with these great investments at our fingertips, many do not invest.
I too find these questions to be interesting. From their perspective, we have virtually all the great attributes of a perfect storm for investing here in the states. Foreign investors are amazed at the opportunities we have at our fingertips and would love to have such great real estate investing opportunities as we do.
All foreign and savvy investors flock to these investing attributes offered in U.S. property:
Did you know that the U.S. is the most affordable country for real estate 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 anywhere else 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. I suspect this is an “ah ha” moment to many.
Best loan terms in the world:
With leverage of a property (by using bank financing) being one of the 5 IDEAL Wealth Building Principles, the Americans have the envy of every foreign country out there. Indeed you can accelerate wealth by financing your property.
Did you know that the U.S. is one of the only developed countries in the word to offer a 30 year fixed rate mortgage. France is the only other country I could find that comes close to our 30 year fixed mortgages. Japan offers a 20 year program and most countries do not offer any fixed rate mortgages.
A safe haven for your investing dollar:
Most investors consider real estate investing in the U.S. to be considered the best safe haven in the world 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 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. In some countries (such as Mexico) you have to be a resident of the country to buy any property within a certain distance to waterfront land.
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 a second home 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 Texas and St Louis Missouri all top the list for equity growth. Property can be bought for less than 3 years income, they have strong local economies and are positioned to grow in prosperity.
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 like, Indianapolis, Indiana and St Louis, Missouri, Cleveland Ohio, Also markets like Philadelphia and Baltimore.