Foreign real estate investors purchased $102.6 billion of U.S. real estate between April 2015 and March 2016. The number of properties purchased rose 2.8 percent to 214,885, while the dollar volume declined 1.3 percent.
Foreign investors are, therefore, opting to invest in less expensive homes, on average, than during the previous year. Likewise, as a real estate wholesaler in Tampa Bay, we have also found that the sweet spot for generating cash flow and annual profits with investment properties is often with less expensive homes.
To further understand the significance of foreign real estate investing in the U.S., we are going to review information from a recent CNBC report, and add information about the #1 U.S. state for foreign real estate investing.
Significant Challenges for Foreign Real Estate Investors
The shift away from higher-end homes to less expensive homes by foreign real estate investors may be a result of economic challenges around the world.
Devalued Foreign Currencies
As the U.S. dollar has gained strength over recent months, foreign currencies have been devalued. Therefore, investing in U.S. real estate has become more expensive for many foreign investors.
According to the U.S. Inflation Calculator, the buying power of the U.S. dollar increased 1.7 percent from 2015 to 2016, resulting in a decrease in buying power for many foreign investors.
Chinese Economy Slowed
Besides a stronger U.S. dollar, the Chinese economy has recently slowed. This is significant because the biggest percentage of foreign real estate investment in the U.S. has come from China.
In recent years, the Chinese economy has been growing at an accelerated rate, resulting in investors from China purchasing significantly more U.S. investment real estate than any other nation. Chinese buyers have also bought the most expensive homes among foreign investors.
Now that the Chinese economy has slowed the last several months, and its currency has weakened in comparison to the U.S. dollar, Chinese investors are seeking high quality investments. Therefore, these investors continue to choose to invest in U.S. real estate, but are perhaps seeking to purchase property at a lower price point.
Florida Saw Highest Percentage of Foreign Real Estate Investment
The state in which the highest percentage of foreign real estate was purchased is Florida (22 percent), which has been a long-time favorite of foreign investors. California came in second (15 percent), Texas came in third (10 percent), and Arizona and New York tied for fourth place (4 percent each).
Florida continues to rank 1st for foreign real estate investing for reasons that include the inherent value of Florida real estate, the ability to generate cash flow and profits with Florida investment property, climate, tourism and the demand for vacation rentals, and the fact that Florida is a preferred place to retire.
Tampa is a Top City for Foreign Real Estate Investing
Top Florida cities for foreign real estate investing include Miami, Jacksonville, Orlando, and Tampa.
As a real estate wholesaler in Tampa Bay, we have analyzed this broad, geographic area for years, even down to the neighborhood, to uncover the reasons the cities of metro Tampa Bay continue to be outstanding places to invest in real estate.
Tampa is a top 5 city for flips according to Forbes, and a top 10 city to buy rental property. It’s an excellent place for real estate investing because it’s a great place to live. White sand beaches, an active lifestyle, population and job growth, and a high quality of life are just a few of the reasons people love the diverse communities of Tampa Bay, and why Tampa continues to be one of the hottest real estate markets.
Graystone Investment Group
Graystone Investment Group is an experienced Investment Group wholesaling properties in metro Tampa Bay. We serve clients who flip homes in as little as 30 days, as well as clients who hold high cash flowing rental properties.
Unlike other wholesaling groups, we find properties that we resell to investors at discount prices, while also connecting them with private financing. We also coordinate with rehab and management companies we’ve worked with for years, at no extra charge.