AmericanMonetaryAssociation.org: Foreign Investors

Recently on the American Monetary Association we discussed how the thought of foreign investment in the U.S. in both businesses and properties raises strong feelings on both sides of the issue. In recent years, foreign investment in American in

come property has begun to surge because of a weaker dollar and increased availability of income property at low prices. So what does this mean for the US economy? Here are the major points covered in the article.

* A recent report from the Wall Street Journal”s Market Watch suggests that buyers from around the world are jumping into the U.S. housing market, with sales reaching $82.5 billion between spring 2011 and 2012. Foreigners who invest in U.S. properties are quite varied, running the gamut of nationalities: Russian, British, Canadian, Indian, Chinese, and Mexican descent.

* Even considering this variety, foreign investors hold a few things in common. Many pay cash for their investments, with only a small percentage working with local and foreign lenders to arrange financing.

* Foreign investors tend to purchase income properties in areas with warm climates in the South and Southwest.

* A large portion of these purchasers acquire these properties to use as vacation homes or primary residences, not often taking advantage of the option to rent the property out. These investors also have a tendency to buy townhouses and condos instead of single family homes. Since many are seeking residences in exchange for their money, they have little interest in any multiplex properties.

* Though some may eventually opt to

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rent out their properties, this option requires maintenance, taxing, and observance of local codes and regulations they may not want to deal with.

* Foreign investors know American properties are a secure investment, and for countries facing economic instability, investing in US property is a prudent strategy to protect future wealth. Do these investors pose a risk to American income property investors observing Jason Hartman”s investment strategies? Overall, the prospect is unlikely. Foreign investors typically choose properties which are not prime income investing. Because their goal is frequently to use the property, these buyers are unlikely to draw the attention of potential tenants.

* Foreign investors serve as a source of American financial gain, pumping money into the economy in the form of cash purchase, and outlay for upkeep and maintenance.

The article further discusses how the surge of foreign investment in American income property creates a complex network of investors, circumstances, and financing. Many of these investors realize what domestic investors already know; US real estate is a safe and stable investment thanks to a (comparatively) stable government and economy.

Interested in learning more? Read the full article, “Foreign Investment – Threat or Economic Boost?” for a more in-depth guide explaining whether or not foreign investors pose a risk to American income property investors following Jason Hartman”s strategies. Visit AmericanMonetaryAssociation.org for more detailed educational articles and podcasts regarding the realities of global economics. (Top Image: Flickr | International Real Estate Listings)

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